Ammon News - AMMONNEWS - Attarat Power Company (APCO) has reached financial close for the development of Jordan’s first shale oil power station.

The financial closure agreement will allow for the construction of the 470MW electricity plant, which will be located at the Attarat um Ghudran oil shale deposit, about 100km south east of Amman, to commence shortly. With a total cost of US$2.1bn, it is the largest private sector project in Jordan’s history.

Chinese banks are providing a US$1,582mn 15-year debt financing facility, which is backed by China’s export credit agency Sinosure. The Industrial and Commercial Bank of China (ICBC) and the Bank of China were the lead arrangers, and China Construction Bank and Export-Import Bank of China will participate in the loan. ICBC will act as global facility agent.

According to a statement by Enefit, one of the developers, Standard Chartered is acting as the onshore security agent and has also provided a US$33mn bank guarantee to Jordan’s National Electric Power Corporation (NEPCO), the single buyer of power.

The power station is scheduled to start operation in mid-2020 and is expected to meet 10-15% of Jordan’s annual power demand, which will help reduce the country’s reliance on imported oil and gas. It is hoped that Jordan will become a net exporter of energy in the future.

Jordan has one of the largest shale reserves in the world, with deposits estimated to underlie more than 60% of the country’s territory.

The Jordanian government has signed agreements with companies from Brazil, China, Russia, the UAE and the UK, among others, to develop access to the resource. The engineering, procurement and construction (EPC) contractor for the project is Guangdong Power Engineering Corporation (GPEC), a subsidiary of China Energy Engineering Group.

APCO was previously owned by Enefit of Estonia, YTL International of Malaysia and Near East Investments Limited of Jordan, but the financial close has entailed transfer of equity, so APCO is now owned 45% by YTL and 10% by Enefit, while Guangdong Yudean Group of China has become a new shareholder with a 45% stake.

The shareholders have committed to providing base shareholder funding of up to US$528mn, the statement says.

Commenting on the agreement, APCO’s CEO-designate Jason Pok Hooi Loong says: “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 dispatchable, reliable power using local resources.”

*GTR