The United Arab Emirates’ first nuclear power project has secured financing worth US$24.4bn, supported by the Export-Import Bank of Korea (Kexim), the Abu Dhabi government and a number of local and international banks.
The Emirates Nuclear Energy Corp (ENEC) and Korea Electric Power Corp (KEPCO) have secured funding to develop and operate the Barakah nuclear energy plant, a project currently under construction in the western region of Abu Dhabi, the companies have announced in a joint statement.
The US$24.4bn facility comprises of direct loans worth US$19.6bn, including US$16.2bn from the Abu Dhabi government, US$2.5bn from Kexim and loan agreements of a total of $250mn with the National Bank of Abu Dhabi, First Gulf Bank, HSBC and Standard Chartered. The deal also includes US$4.7bn-worth of equity commitment from ENEC and KEPCO.
KEPCO, the prime contractor for the project, has been working together with ENEC since 2009 to build the four 1,400MW nuclear reactors that are being constructed at the Barakah plant. The financing forms part of a new joint venture agreement between the two companies to drive the Barakah project forward. It also involves the establishment of the subsidiary Barakah One, owned by both companies, which will manage the funds.
The direct loan agreements cover the overnight cost of the prime contract for the construction and commissioning of the Barakah plant, interest during construction, the cost of initial nuclear fuel and allowances for potential commodity price increases during construction.
Commenting on the facility, H.E. Khaldoon Khalifa Al Mubarak, chairman of the ENEC board of directors, says: “With the creation of this financial framework, ENEC will be able to provide safe, reliable electricity to the UAE grid through a commercially viable and cost-competitive programme. This financial structure reflects the world-class quality of the programme, and its credibility in the international community.”
Lee Duk-Hoon, chairman and president of Kexim, adds: “We believe that providing funding for Barakah One through a direct loan will further enhance the level of partnership between Korea and the United Arab Emirates. Our experience with major projects around the world provides us with unique insight and capabilities, all of which will be employed to ensure the success of the Barakah nuclear energy plant.”
Construction of the Barakah plant started in 2012 and is scheduled for completion in 2020. With four reactors online, the facility will deliver up to 25% of the UAE’s electricity needs, according to the developers.