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16.03 2017

Attarat Power Company financial close for the USD 2.1 billion Oil Shale Power Project in Jordan

Attarat Power Company (“APCO”) announced that it has earlier today reached financial close for the project to construct the first oil shale fired power station and open cast mine in Jordan. It will be located at the Attarat um Ghudran oil shale deposit approximately 100km south east of Amman. The construction of the 554MW gross/470MW net oil shale fired mine mouth power station will commence shortly and the power station is scheduled to start operation in mid-2020.

This project is the first to commercially utilise Jordan’s abundant oil shale reserves, and will significantly reduce Jordan’s reliance on imported oil and gas. With an investment value of USD 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 in the world funded by limited recourse project financing. It is expected to meet 10-15% of Jordan´s annual power demand.

In addition to confirmation that the debt facilities are now available for drawdown, financial close has entailed the completion of the transfer of 15% of the equity to YTL Power International (“YTL”) of Malaysia and 45% to Guangdong Yudean Group Co. Ltd (“Yudean”) of China, from Eesti Energia AS (“Enefit”) of Estonia and Near East Investment (“Near East”) of Jordan. APCO is now owned 45% by each of YTL and Yudean and 10% by Enefit. The shareholders have committed to provide base shareholder funding of up to USD 528 million.

The USD 1,582 million 15 year debt financing will be provided on the basis of export credit insurance provided by China Export & Credit Insurance Corporation (“Sinosure”). The debt facility has been lead arranged by Industrial and Commercial Bank of China (“ICBC”) and Bank of China. China Construction Bank and Export Import Bank of China will also participate in the facility. ICBC will act as global facility agent. Standard Chartered Bank is acting as Onshore Security Agent, and has also provided a USD33m bank guarantee to support the obligation to construct the power station in favour of the National Electric Power Corporation (“NEPCO”) of Jordan, the single buyer of power. This is the largest private project financing supported by Sinosure to date.

APCO has entered into 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 units are scheduled for 38 and 42 months from financial close. APCO has entered into a 30-year agreement with NEPCO for the sale of the entire electrical capacity and net electrical output following construction of the power station. 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.

Andres Anijalg, Outgoing Chairman and CEO: “Achieving 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. We would like to thank everyone who has believed in the success of this ground breaking project and helped us achieve the trust of the lenders to achieve financial close.”

Jason Pok Hooi Loong, CEO Designate, APCO: “Financial Close entails 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 despatchable, reliable power using local resources.”

Background: In 2010, Jordan Oil Shale Energy Company (“JOSE”), until Financial Close a 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 Jordanian Government. This land has formed the basis of a lease from the Jordanian 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.

In October 2014, Guangdong Power Engineering Corporation (GPEC; a subsidiary of China Energy Engineering Corporation) was selected to lead the engineering, procurement and construction (EPC) of the 554MW (gross) mine mouth oil shale fired power plant under a fixed price turnkey contract. Foster Wheeler will provide the circulating fluidised bed boilers, Siemens the steam turbine generators and Worley Parsons the plant design.

Jordan has abundant resources of oil shale (kerogen). Oil shale is a rock containing organic matter. Oil shale can be mined, crushed and then either burned as fuel in a power station or retorted to produce oil.

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