Gov’t, NEPCO initiate arbitration over Attarat project’s PPA

AMMAN — Minister of Energy and Mineral Resources Hala Zawati announced that the National Electric Power Company (NEPCO) and the government have initiated arbitration proceedings against the Attarat Power Company (APCO). 

These arbitration proceedings are with respect to the power purchase agreement (PPA), and the government guarantee of NEPCO’s obligations related to the oil shale project to produce electricity in the Al Attarat area, according to a ministry statement.

Zawati indicated that two arbitration requests were submitted to the International Chamber of Commerce in Paris on the grounds of “gross unfairness, in order to seek declaratory judgements confirming the existence and extent of gross unfairness in the electrical tariff and the right of the National Electric Power Company to terminate the contract if such gross unfairness is not removed”, according to the statement.

Zawati said that the arbitration tribunal has also been requested to issue a declaration that the government's guarantee of NEPCO’s obligation under the PPA is legally unenforceable due to “the gross unfairness”, the statement said.

In 2017, APCO announced that the parties had reached financial closure for the construction of the first oil shale-fired power station, valued at $2.1 billion in Jordan.

APCO entered into a 30-year agreement with NEPCO to sell it the entire electrical capacity and net electrical output.