Etihad Credit Insurance (ECI), the United Arab Emirates’ federal export credit agency, says it has provided debt reinsurance for an agreement between global energy giant GE and Iraq’s ministry of finance to provide upkeep for seven power plants in Iraq.
ECI will provide reinsurance coverage to JP Morgan, the lender in the deal, the agency says in a joint statement with GE and the Iraqi finance ministry on the closing of the financing, which took place in March. It is the first time ECI has provided support for a project in Iraq.
GE will undertake some of the repair works at its service facility in the Jebel Ali Free Zone in Dubai and will also export goods, such as spare parts, from the UAE, the statement says.
“Etihad Credit Insurance is committed to delivering the vision of the UAE’s leadership to drive sustainable and diversified economic development,” says ECI chief executive Massimo Falcioni.
“As part of these efforts, we are honoured to extend our support to finance a project in Iraq for the first time, a strong statement on the regional partnerships that we continue to build. We look forward to continue evaluating opportunities for future partnerships in Iraq.”
The total value of the financing announced on April 11 was not disclosed and both ECI and GE declined to provide the figure. GE and the Iraqi authorities signed in January 2016 agreements that will add over two gigawatts (GW) of power and secure the delivery of ~1.75 GW of existing power to the national grid. The company says the total orders received from Iraq’s ministry of electricity to establish and maintain power plants are worth US$1.4bn.
The recent financing is the fourth phase of the plan and is designed to provide a “more reliable” generation of up to 2.7GW of power to Iraqis. A GE spokesperson tells GTR that works under the plan are expected to be completed by 2022.
“Open economies, trade and public private partnerships can play a strong role in supporting countries to develop critical infrastructure,” says Thani bin Ahmed Al Zeyoudi, the UAE’s trade minister and ECI deputy chairman.
“This is highlighted by the Power Up plan [phase] 4, for which certain key services will be executed in and exported from GE’s facilities in the UAE, allowing us the opportunity to extend financial support through Etihad Credit Insurance and providing a win-win scenario for all. It also reflects the vision of our leadership to broaden regional collaborations that can help enhance the quality of life of people across the Middle East and beyond.”
GE has helped obtain US$2.4bn in financing for energy projects in Iraq since 2015, according to Joseph Anis, the president and chief executive of GE Gas Power Europe, Middle East and Africa.
UK Export Finance provided a guarantee in 2017 to the Iraqi government to support financing the construction, by GE and Enka UK, of the Dhi Qar and Samawa gas-fired power plants in southern Iraq.