The Jordan Times
Mar 16, 2017
Prime Minister Hani Mulki (sixth left standing) acts as patron at a ceremony to sign the financial closure of an oil shale-fired power plant in Amman
Construction on a 554-megawatt, oil shale-fired power plant will start following securing necessary finance for the project, valued at $2.1 billion, announced Attarat Power Company (APCO) on Thursday
APCO announced that the parties had reached financial closure for the construction of the first oil shale-fired power station and open cast mine in Jordan.
The signing ceremony was held under the patronage of Prime Minister Hani Mulki.
The project will be located at the Attarat Um Ghudran oil shale deposit, approximately 100km southeast of Amman. The construction of the 554MW gross/470MW net oil shale-fired mine mouth power station will begin shortly, while the power station's construction is scheduled to start in mid-2020.
The project will be the first to commercially utilise Jordan’s abundant oil shale reserves, significantly reducing the country's reliance on imported oil and gas. It is expected to meet 10-15 per cent of Jordan’s annual power demand.
With an investment value of $2.1 billion, the project is the largest private sector project in Jordan to date. The two-unit power station will be the first oil shale-fired power station and mine project funded by limited recourse project financing in the world.
APCO entered a fixed cost, fixed term engineering, procurement and construction contract with Guangdong Power Engineering Corporation, a subsidiary of China Energy Engineering Group Co. Ltd.
Commercial operations of the two projects are scheduled to start respectively 38 and 42 months from the date of financial closure. APCO entered into a 30-year agreement with NEPCO to sell it the entire electrical capacity and net electrical output. Affiliates of the shareholders will be responsible for the operation and maintenance of the power station as well as the fuel supply.
The power station and oil shale mine are expected to employ approximately 5,500 people during construction and 1,000 during operations.
“Achieving the financial close for this highly strategic project has required the unswerving commitment of many parties for several years. On behalf of our founders and shareholders, Near East, Enefit, YTL and Yudean, we commend the dedication and perseverance of all involved, particularly the government of Jordan, NEPCO, GPEC, Sinosure and the Chinese banks,” Andres Anijalg, outgoing chairman and CEO at Enefit, said during the event announcing the closure on Thursday.
Jason Pok Hooi Loong, APCO CEO designate, said the financial closure entails a notice to proceed for the construction.
“APCO is honoured to be entrusted with the realisation of this most strategic investment. We and GPEC will continue to work closely with the Jordanian government and NEPCO to complete this largest ever private sector project in Jordan in 2020, in order to generate reliable power using local resources,” he said.
In 2010, Jordan Oil Shale Energy Company (JOSE), a former sister company of APCO, signed an Oil Shale Surface Retort Concession Agreement with the government of Jordan, giving it exploration and oil production rights for 40 years.
JOSE recently relinquished approximately 31km2 of land to the government. This land has formed the basis of a lease from the government to APCO for the site on which the power station and the mine will be developed. The term of the lease is coterminous with the power purchase agreement with NEPCO.
When completed in 2020, it will be one of the largest power plants in Jordan and the largest oil shale- fired power plant in the world after Enefit’s power plant in Estonia.
The shareholders committed to provide base shareholders fundings up to $528 million, while the China Export & Credit Insurance Corporation (Sinosure) will provide $1.5 billion for a 15-year debt financing on the basis of export credit insurance.
The debt facility was arranged by the Industrial and Commercial Bank of China (ICBC) and the Bank of China. China Construction Bank and the Export Import Bank of China will also take part in the project. ICBC will act as a global facility agent. Standard Chartered Bank will act as onshore security agent, providing a $33-million bank guarantee to support the construction of the power station. The station will directly benefit the National Electric Power Corporation (NEPCO), the single buyer of power in Jordan. This is the largest export credit facility ever supported by Sinosure.