Zespół Elektrowni Pątnów Adamów Konin SA

History of the Construction Project

On 16th February 1996, General Meeting of Shareholders approved “ZE PAK SA Reconstruction Programme”. The employees of the Company’s Development Section started implementing Pątnów II Project as early as in 1997. In May 1997, ZE PAK SA concluded an agreement with Energoprojekt Warszawa SA for compiling technical and formal-legal documentation with the aim of taking investment decisions and concluding contracts for executing construction of major technological facilities.
As a result of conducting technical analyses and tender proceedings, it was decided that within the scope of Pątnów II project, a 464 MW power generating unit will be constructed to operate with supercritical parameters, which will replace heavy fuel oil power units no.: 7 and 8. In June 2000 Elektrim-Megadex S.A was appointed as the general contractor of the construction project. The company undertook to implement the project, on a „turn key” basis, until the end of March 2005.

The main subcontractors of Elektrim-Megadex S.A. will be:
• Alstom-Rafako for a boiler
• Rafako for flue gas desulphurization installations
• Alstom for an engine room

After the 460 MW power unit is put into operation, Pątnów II Power Plant will be the most modern power generating facility in Poland. From experiences of foreign power stations in which similar technical solutions have been applied, it appears that the new power unit will be characterized by very good technological parameters.
The construction investment is marked by particular attention to environmental protection issues. The project takes the following into consideration: constructing electrostatic precipitators and flue gas desulphurization installations as well as using light fuel oil in fuel and oil management, instead of the previously used heavy fuel oil. In comparison to the parameters of the currently installed 200 MW power units in Pątnów I Power Station, the operation of the new power unit will be characterised by the reduction in:

CO₂ emission into the atmosphere by 20%, and SO2 emission by 95%
the amount of solid waste by 20%
coal use by 20%

Implementation of modernization project of Pątnów II Power Plant required obtaining financial resources essential for financing the construction investment. In order to obtain external financing resources in the form of long-term loans it was necessary to section off a new business entity called Pątnów II Power Plant Sp. z o.o. in March 2001. This company is a business entity dependent on ZE “PAK SA that holds 100% share ownership of it. The company in mainly involved in generating and distributing electric power produced by the new 464 MW power unit.

In August 2001, a loan agreement for financing the project was concluded, organized by Citibank N.A. Londyn, Westdeutsche Landesbank Girozentrale and the European Bank for Reconstruction and Development, This loan agreement closed the financing process of the construction project. However, due to a difficult financial situation of Elektrim Company SA, on 22nd May 2002 the bank consortium, which organized the loan agreement, sent a letter informing that they withdrew from the agreement.
At present, the final talks are being held with a new bank consortium which provisionally agreed to finance the construction of the new power generating unit. The bank consortium is composed of: Pekao SA, BPH PBK SA, BRE Bank SA, WestLb AG and the European Bank for Reconstruction and Development.

On 29th April 2005, General Meeting of Shareholders of ZE “PAK” SA agreed to take out a bank loan. An Annex to the Agreement of 30th March 1999 for Sale of Shares of Zespół Elektrowni Pątnów-Adamów-Konin SA between Elektrim SA and Polish State Treasury was also signed on 29th April 2005. According to the Annex, the date of completing the construction investment of the 464 MW power generating unit in Pątnów II was set for 31st December 2007, and the date of completing the modernization of ZE “PAK” SA was set for 31st December 2011. An Annex to the Agreement for Power and Electricity Supply of 19th December 1996 between PSE SA (the Polish Power Grid Company PLC) and Pątnów II Power Plant Sp. z o.o. was also signed, in which it was agreed that the new power unit will be put into operation not later than on 31st December 2007

On 13th July 2005, ZE “PAK” SA singed a loan agreement with PAI Media Company SA for the amount of 90 million euros, which will be intended for financing the construction investment of Pątnów II

On 19th July 2005, a Loan Agreement was signed with Bank Consortium, under which Pątnów II Power Station Sp. z o.o. was granted a loan amounting to 227 million Euros. The loan will be entirely intended for financing the completion of constructing the new power unit in Patnów II Power Station. Power Station Pątnów II Sp. z o.o. also signed an annex updating the loan agreement with National Fund for Environmental Protection with the total value of 226 million zlotys. On the same day, Pątnów II Power Station concluded an EPC (Engineering Procurement and Construction) contract with the General Contractor, currently SNC Lavalin Company.

On 20th July 2005, the construction site was officially handed over to the General Contractor. At the turn of 2005 and 2006, components of the engine room, such as the body of a low pressure turbine and generator stator, were delivered onto the construction site. They were indispensable for the whole construction investment.
The General Contractor announces that construction works are carried out ahead of schedule. The ordered components from subcontractors are successively delivered on the construction site.

In the last period of time (from March to April 2006) the following important components were delivered to Pątnów II: turbo-pump, a body of exhaust fan, an internal casing of low pressure turbine, rotors NP1 and NP2, low pressure regeneration exchangers.70% of the pressure part of the boiler is welded, the assembly of a slag runner to the combustion chamber is in progress, the assembly of exhaust and air ducts is on the point of being completed. The installation of fire baskets in a rotary air heater is beginning. KARRENA Company have constructed floors on several levels of the boiler house as well as the foundations for a number of coal pulverizers, an air fan and others. SNC Lavalin Company is completing the enquiring process and signing supply agreements for the components that have not been contracted yet. 550 people from the 10 main subcontractors are working on the construction site. Pątnów II Power Station concluded an agreement with Siemens Company for “turn key” construction of a power output system from the new 464 MW power unit, through the 400 KV switching station. The construction site has already been handed over to the contractor.

Consistent implementation of a pro-environmental policy by ZE PAK S.A. is confirmed by a contract, on “turn key” basis, concluded between Pątnów II Power Station Sp. z o.o. and Raciborska Fabryka Kotłów RAFAKO for design and construction of gypsum dehydrating and warehousing system as well as for design and construction of sewage treatment system from the Flue Gas Filtration Installations. The above-mentioned installations will be completed in the period from 2006-2007. The total contract value is 14.500.000,00 EUR.

The General Contractor guarantees that the 464 MW power unit, equipped with the flue-gas desulphurization installations, will be characterized by pollution emissions far below admissible limits, and for example: NOx emission below 200 mg/Nm³, SO₂ emission below 200 mg/Nm³, dust emission below 30 mg/Nm³. Gypsum pulp will be a by-product of flue gas desulphurization installation, which, after further treatment in dehydration process in a Gypsum Dehydration System constructed by the Investor, will be used for production of gypsum structural elements. The 464 MW new power unit is planned to be put into operation on 31st December 2007.

In mid July 2006 the first test of the new boiler pressure was carried out, which was one month ahead of schedule. This test was proved to be completely successful at the first attempt, which reflects both the highest level of performance and the fulfillment of stringent quality and technological requirements.

The beginning of the fourth quarter of 2006 was very eventful for the construction project of the new 464 MW power unit. The construction of section no. 8 of the main 220 kV auxiliary switchboard (general power plant internal consumption) was completed by Siemens Company. When the line and communication connections are completed, all the functionality, voltage and load tests will be carried out.

The construction of the 400 kV substation house, autotransformer section and fire-fighting water pumping station are well under way. At the weekend, at the turn of September and October, two electricity pylons were built.

The first cables were laid in the power unit. Insulation works of the boiler house are well under way. The assembly of the turbo-generator will have been completed by the end of October. Preparations for installing elevators in the pylons are in progress. The number of people involved in the construction of the new power unit exceeded one thousand. 1018 workers from 23 companies were employed to work on the construction site. The widest scope of works is now performed by the following companies:
Energomontaż PN (79 workers), Remak SA (84 workers), Alstom Power (186 workers), Karrena (97 workers), PAK SERWIS (37 workers), IZOMAR (74 workers), MOSTOSTAL WARSZAWA (52 workers), Babcock – Chemar (58 workers), HYDROWAT (48 workers).