The Hamriyah Independent Power Project in the UAE has reached financial close with support from private banks, as well as the Japan Bank for International Co-operation (JBIC) and Nippon Export and Investment Insurance (Nexi).

The 24-year financing, which amounts to approximately US$1bn and consists of two tranches, will fund the development of the Hamriyah 1.8GW gas-fired combined cycle power plant in the emirate of Sharjah.

The first tranche of US$516mn is provided by a group of private financial institutions, including SMBC, Sumitomo Mitsui Trust Bank, Norinchukin Bank, Société Générale, Standard Chartered and KfW-Ipex. This tranche will be insured by Nexi, Japan’s export credit agency.

JBIC will provide the second tranche of US$555mn under its ‘global facility to promote quality infrastructure investment for environmental preservation and sustainable growth’, an initiative launched by the Japanese government last year to promote infrastructure development projects that are expected to contribute to global environmental protection.

The Hamriyah power plant is being co-developed by GE Energy Financial Services and Japan’s Sumitomo Corporation, who have formed an equity consortium for the project together with Shikoku Electric Power Company and Sharjah Asset Management, the investment arm of the government of Sharjah.

The consortium’s role will be to build, own and operate the project, which will consist of three combined cycle blocks, the first of which is planned to come online in 2021.

The plant is expected to reach full commercial operations by mid-2023 and will sell its electricity production to the Sharjah Electricity and Water Authority (SEWA) under a 25-year power purchase agreement.

“Securing financing for the project will lead to the first independent combined cycle power project in the emirate of Sharjah, which is expected to be the most efficient power plant in the Middle East’s utilities sector on completion,” GE Energy Financial Services says in a statement.

Susan Flanagan, GE Energy’s global power leader, adds that the deal “demonstrates the region’s attractiveness for foreign investment”.

GE will supply three 9HA gas turbines, three steam turbines, six generators, three heat recovery steam generators and turnkey engineering, procurement and construction services for the power plant. The company will also provide parts, repairs and maintenance services for the power generation assets at the site for a period of 25 years.