ICBC contributes $90 million to syndicated loan for 485MW Hussein Combined-Cycle Gas Turbine Project (Linked to Project ID#72504)

On December 15, 2016, a consortium of banks (including China Construction Bank and the Industrial and Commercial Bank of China) signed a $350 million syndicated loan agreement with Mahatat Al Zarqa Le Tawleed Al Takah Al Kahrabaieyaha [also known as Al Zarqa Power Plant for Energy Generation (P.S.C) or محطة كهرباء الزرقاء لتوليد الطاقة] — a special purpose vehicle (SPV) and project company that is wholly owned by ACWA Power — for the 485MW Hussein Combined-Cycle Gas Turbine Project. The syndicated loan consisted of a $90 million contribution from the Industrial and Commercial Bank of China (captured via Project ID#64473), a $40 million contribution from China Construction Bank (captured via Project ID#72504), a $75 million contribution from the European Bank for Reconstruction and Development (EBRD), a $75 million contribution from the International Finance Corporation (IFC), a $40 million contribution from Commercial Bank Europe Arab Bank, and a $40 million contribution from the OPEC Fund for International Development. On December 21, 2016 the Multilateral Investment Guarantee Agency (MIGA) underwrote (i.e. insured) the contributions of China Construction Bank and the Industrial and Commercial Bank of China to the syndicated loan facility for $215.6 million (covering the principal and interest of the loan over 19 years). The borrowing terms of the loan were as follows: a 19 year maturity and an annual interest rate of 6-month LIBOR (1.058% in December 2016) plus 425 basis points (4.25% margin). The proceeds of the loan were to be used by the borrower to finance an EPC contract that ACWA Power signed with Shandong Electric Construction Corporation III (SEPCO III) on August 19, 2016. The total cost of this project is $475 million and it is being implemented as an independent power project (IPP) and financed according to debt:equity ratio of 76:24. The shareholders of Mahatat Al Zarqa Le Tawleed Al Takah Al Kahrabaieyaha (محطة كهرباء الزرقاء لتوليد الطاقة) reportedly agreed to make $115 million of equity contributions to support the project. The 485MW Hussein Combined-Cycle Gas Turbine Project is located 4 km northeast of Zarqa City and 40 km northeast of Amman. Its exact locational coordinates are 32.119537581175365, 36.12426462650558. The plant will replace the 363MW Hussein Thermal Power Station, which was decommissioned in 2015 after 30 years of service. The new 485MW plant was developed by ACWA Power and it will provide electricity to the National Electricity Power Company of Jordan (NEPCO) under a 25-year power purchase agreement, which was signed on January 1, 2018. A subsidiary of ACWA Power, Central Electricity Generating Company (CEGCO), will provide plant maintenance, while SEPCO III will serve as the the general (EPC) contractor for the construction of the facility. The plant will be equipped with 3 heat recovery steam generators, 6 chimneys, and 3 GE 9E.03 heavy-duty gas turbines. It will be supplied natural gas by NEPCO connected to Jordan’s main natural gas pipeline. The plant will also utilize a 183MW steam turbine set from Doosan Skoda Power. It will be capable of generating an average of 3,200 gigawatt hours (GWh) of electricity per year, thereby enabling it to serve 620,000 individuals annually. According to MIGA, the plant will “replace about 8% of the country's gross baseload generation capacity while adding an additional 150MW of capacity.” Other benefits of the plant include improved fuel efficiency and environmental standards over its predecessor, as well as the preservation of 50 Jordanian jobs. A project design kickoff meeting took place on April 16, 2016. Then, on October 1, 2016, Mahatat Al Zarqa Le Tawleed Al Takah Al Kahrabaieyaha issued a ‘notice to proceed’ to the EPC contractor (GPEC). The power plant’s first turbine was successfully connected to the power grid on February 5, 2018. The 485MW Hussein Combined-Cycle Gas Turbine Plant commenced commercial operations on September 29, 2018.

Additional details

1. This project is also known as the Hussein Gas-Fired Power Plant Project, the ACWA Power Zarqa CCGT Project, and the Al Zarqa CCGT Plant Project .The Chinese project title is 约旦485MW联合循环燃机项目 or 约旦侯赛因项目. The Arabic project title is محطة الحسين الحرارية. 2. ACWA Power is a developer, investor and operator of a portfolio of power generation and desalinated water production plants currently with a presence in 11 countries including in the Middle East and North Africa, Southern Africa and South East Asia regions. ACWA Power, registered and head-quartered in the Kingdom of Saudi Arabia, is owned by eight Saudi conglomerates, Sanabil Direct Investment Company (owned by the Public Investment Fund of Saudi Arabia), the Saudi Public Pensions Agency and the International Finance Corporation (a member of the World Bank Group). 3. The Multilateral Investment Guarantee Agency (MIGA) is a member of the World Bank Group. MIGA provides political risk insurance (guarantees) for projects in a broad range of sectors in developing member countries, covering all regions of the world.

Number of official sources

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