Amman Asia Electric Power has received project financing of about US$600mn from Japan and South Korea for Jordan’s IPP3 diesel power plant project.
Korea Eximbank (Kexim) has provided US$320mn in loan and US$107mn guarantee, while Japan’s Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation have extended a US$181mn loan covered by the Nippon Export and Investment Insurance (Nexi) with a 19.8-year tenor. Nexi will also provide an extended political risk coverage concerning the Jordan government guarantee.
The project plans to construct and operate a 573MW diesel power plant in eastern Amman. Electricity from the plant will be sold to National Electric Power Co (Nepco) under a 25-year power purchase agreement with the project company.
The project, estimated at a total cost of US$812mn, is partly invested by Mitsubishi Corporation. Korean companies are involved in business development and equity investment (Korea Electric Power Corporation, construction (Lotte Engineering & Construction) and operation and maintenance (Korea Electric Power KPS).
A Kexim spokesperson says: “This project is an example of how Korea and Japan can co-operate successfully in both the finance and business aspects of a project, with Korean and Japanese ECAs jointly providing the financing and Korean and Japanese companies joining hands to form a consortium. This will open up greater opportunities for Korean and Japanese firms to jointly participate in large-scale projects and to benefit from Japan’s strong funding capacity