Olympics postponed, Aggreko talking with TOCOG
By Thomas Allen24 March 2020
Aggreko, the company set to provide temporary power for the 2020 Tokyo Olympic and Paralympic Games, is to enter discussions with the Tokyo Organising Committee of the Olympic and Paralympic Games (TOCOG) following its decision to postpone the event as a result of the coronavirus outbreak.
Although a new date has not yet been set, it will not be later than summer 2021.
The initial value of the contract was approximately $200 million, although it was announced at the start of March that this was expected to increase to around $250 million
Aggreko’s contract provides a framework for the discussions, but the commercial terms and operational impact surrounding the postponement will need to be worked through in detail.
To date, Aggreko has received $98 million in milestone payments under the contract.
The company is to provide temporary medium- and low-voltage power for 43 competition venues, the Athletes Village and the International Broadcast Centre, ensuring reliable power for all the venues and uninterrupted television broadcast.
Aggreko has considered a range of scenarios to stress-test the group’s liquidity through to the end of the year, including a situation in which the Olympic games do not take place this year. Even in a worst-case scenario, with the appropriate mitigating actions, Aggreko expects to remain within the group’s financial covenants.