Return to search

Jordan $2.1bn shale power project hits financial close

The facility is the largest private sector scheme in Jordan to date and the first of its kind to be funded by limited-recourse project financing.

A group of Chinese banks has provided $1.582 billion in financing to project company Attarat power Company (APCO) for the development of the country's first oil shale power project – a 554MW gross-capacity facility next to an open cast mine in Attarat um Ghudran.

With an investment value of $2.1 billion, the project is the largest private sector scheme in Jordan to date, according to Clifford Chance, which advised Industrial and Commercial Bank of China, Bank of China, China Construction Bank and the Export-Import Bank of China on the 15-year transaction. 

The financing is covered by an export credit insurance provided by China Export & Credit Insurance Corporation, also known as Sinosure. The project is also said to be the first oil shale-fired power station and mine project in the world funded by limited recourse project financing. 

In addition to project financing, the deal also involved a sell-down of equity stake in the project company from Estonian energy company Eesti Energia AS to Malaysian existing investor YTL Power International Berhad and new shareholder Guangdong Yudean Group of China. The latter two now each own a 45 percent stake in APCO, while Eesti Energi hold the remaining 10 percent stake. The investors have committed to provide base shareholder funding of $528 million, said Slaughter and May, adviser to the project sponsors on the transaction. 

The two-unit power station will sell its electricity to Jordan's state-owned National Electric Power Corporation under a 30-year power purchase agreement.

APCO has entered into a fixed-cost, fixed-term EPC contract with China's state-owned Guangdong Power Engineering Corporation, with project construction to commence shortly. The power station is scheduled to become operational in mid-2020.

“Chinese contributions in financing, technology and construction are providing a vital link to countries with underdeveloped infrastructure. Yudean's investment in the APCO project in Jordan is a good example,” said John Yeap, a partner at Pinsent Masons, advising Yudean Group on the deal. “It is our view that the 'One Belt, One Road' infrastructure deals provide a three-way 'win-win' proposition – with China, its corporate trading partners and the regional economies all benefitting.”