YTL Power International Increases Stake In APCO to 45%

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Attarat Power Company (“APCO”) announced that it has earlier today reached financial close for the project to construct the first oil shale fired power station and open cast mine in Jordan. It will be located at the Attarat um Ghudran oil shale deposit approximately 100km south east of Amman. The construction of the 554MW gross/470MW net oil shale fired mine mouth power station will commence shortly and the power station is scheduled to start operation in mid-2020.

Attarat Power Company (APCO) Announces Financial Close For The USD 2.1 Billion Oil Shale Power Project in Jordan

This project is the first to commercially utilise Jordan’s abundant oil shale reserves, and will significantly reduce Jordan’s reliance on imported oil and gas. With an investment value of USD 2.1 billion, the project is the largest private sector project in Jordan to date. The two unit power station will be the first oil shale fired power station and mine project in the world funded by limited recourse project financing. It is expected to meet 10-15% of Jordan ́s annual power demand.

Financial close also triggered the completion of the transfer of 15% of the equity in APCO to YTL Power International (“YTL Power International”) from existing shareholders, Eesti Energia AS (“Enefit”) of Estonia and Near East Investment (“Near East”) of Jordan, thereby increasing YTL Power International’s stake to 45%. At the same time Guangdong Yudean Group Co. Limited (“Yudean”) of China completed its acquisition of a 45% stake in APCO also from Enefit and Near East.,. APCO is now owned 45% by each of YTL and Yudean and 10% by Enefit. The shareholders have committed to provide base shareholder funding of up to USD 528 million.

Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping, Managing Director, YTL Power International Berhad said, “We first brought our international independent power producer (“IPP”) expertise to this project in 2011. We believe that this is a unique project that will have a positive impact on the Jordanian economy as well as yield solid returns. Financial Close is a landmark that is a result of the hard work and commitment of all parties involved. We are pleased to have the opportunity to increase our initial participation in the project from 30% to 45% and step into a leading role in the development and completion of this exciting project.”

Jason Pok Hooi Loong, CEO Designate, APCO: “Financial Close entails notice to proceed for the construction; APCO is honoured to be entrusted with the realisation of this most strategic investment. We and GPEC will continue to work closely with the Jordanian Government and NEPCO to complete this largest ever private sector project in Jordan in 2020, in order to generate despatchable, reliable power using local resources.”

The USD 1,582 million 15 year debt financing will be provided on the basis of export credit insurance provided by China Export & Credit Insurance  Corporation (“Sinosure”). The debt facility has been lead arranged by Industrial and Commercial Bank of China (“ICBC”) and Bank of China. China Construction Bank and Export Import Bank of China will also participate in the facility. ICBC will act as global facility agent. Standard Chartered Bank is acting as Onshore Security Agent, and has also provided a USD33m bank guarantee to support the obligation to construct the power station in favour of the National Electric Power Corporation (“NEPCO”) of Jordan, the single buyer of power. This is the largest export credit facility supported by Sinosure to date.

APCO has entered into a fixed cost fixed term engineering, procurement and construction contract with Guangdong Power Engineering Corporation, a subsidiary of China Energy Engineering Group Co Ltd. Commercial operations of the two units are scheduled for 38 and 42 months from financial close. APCO has entered into a 30-year agreement with NEPCO for the sale of the entire electrical capacity and net electrical output following construction of the power station. Affiliates of the shareholders will be responsible for the operation and maintenance of the power station as well as the fuel supply. The power station and oil shale mine are expected to employ approximately 5,500 people during construction and 1,000 during operations.

Background: In 2010, Jordan Oil Shale Energy Company (“JOSE”), until Financial Close a sister company of APCO, signed an Oil Shale Surface Retort

Concession Agreement with the Government of Jordan, giving it exploration and oil production rights for 40 years. JOSE recently relinquished approximately 31km2 of land to the Jordanian Government. This land has formed the basis of a lease from the Jordanian government to APCO for the site on which the power station and the mine will be developed. The term of the lease is coterminous with the power purchase agreement with NEPCO.

In October 2014, Guangdong Power Engineering Corporation (GPEC; a subsidiary of China Energy Engineering Corporation) was selected to lead the engineering, procurement and construction (EPC) of the 554MW (gross) mine mouth oil shale fired power plant under a fixed price turnkey contract. Foster Wheeler will provide the circulating fluidised bed boilers, Siemens the steam turbine generators and Worley Parsons the plant design.

Jordan has abundant resources of oil shale (kerogen). Oil shale is a rock containing organic matter. Oil shale can be mined, crushed and then either burned as fuel in a power station or retorted to produce oil.

YTL Power International  Berhad (YTLPI) is listed on Bursa Malaysia. YTLPI owns and operates some 5,500MW of gas, oil and coal-fired power generation plants in Malaysia, Singapore and Indonesia and is an active trader of oil products in the Singapore market where it has approximately 850,000m3 of storage capacity. YTLPI also owns 100% of Wessex Water Services Limited, a water and sewerage services company that serves the south west of England in the UK and a one-third stake in ElectraNet S.A. which owns and operates the electricity transmission network in South Australia.

Yudean  is a Chinese state-owned utility which owns and operates over 27,000 MW of power generation capacity with ca. 13,000 employees. Yudean has significant coal mining operations both in China and New South Wales and international experience in the independent power producer (“IPP”) market with a 20% stake in InterGen, the international IPP developer and operator. Yudean is owned by Guangdong Province (76%) and China Huaneng Group (24%).

Enefit  is an international energy company that operates in the unified electricity market of the Baltic and Nordic countries. Its sole shareholder is the Republic of Estonia. Enefit owns and operates some 2,000MW of direct oil shale fired mine-mouth power generation capacity and supplies electricity to some 450,000 customers. Enefit is also one of the largest producers of shale oil in the world and has been engaged in oil shale processing for 80 years. Enefit has studied oil shale in 13 countries worldwide, owns an oil shale project in Utah, US with an estimated of 2.6 billion barrels of recoverable oil and owns a pilot plant for oil shale studies in Frankfurt, Germany. More than 1 billion tons of oil shale has been mined, over 200 million barrels of oil have been produced and more than 600TWh of electricity has been produced from oil shale in Estonia to date.

Near East Investments is a Jordanian investment business active in real estate, aviation and mineral resource development, founded by Munir Attala, who sadly passed away in 2016.