Consortium picked to build oil shale plant ‘might not secure financing’

AMMAN — Stakeholders in Jordan's first shale oil-fuelled power plant are facing difficulties securing finance for the project and may seek an extension of the deadline for financial closure, according to a partner in the project.

They have until October 1 to secure finance for the $2.2 billion, 470 megawatt (MW) project, while they are facing difficulties at this stage with many entities refusing to finance the project, said Mohammad Maaitah, project partner of Attarat Power Company (APCO).

The company a wholly owned subsidiary of Enefit Jordan BV, owned by Enefit (Estonia’s Eesti Energia AS), Malaysia’s YTL Power International Berhad and Jordan’s Near East
Investments Limited. 

“It is unfortunate that many international and regional financing entities have not shown interest in financing this strategic and vital project for Jordan that will help it address one of its main major challenges posed by the bloating energy bill,” said Maaitah in a recent interview with The Jordan Times.

“Many agencies including the International Finance Corporation, the European Bank for Reconstruction and Development and the Islamic Development Bank, among others either, have rejected or showed no interest in financing the project, which is likely to create 3,000 direct jobs during the construction phase and 700 jobs for ongoing operations,” said Maaitah.

He added that the consortium of companies that owns the power plant may seek an extension for two more months to to be ready for the financial closure for the scheme.

“If we do not secure the needed funds before end of this November, we will not be able to secure it at all then,”the executive said.

“If we do not start construction on the project early 2016, we will not be able to complete the plant by the second half of 2018 as stipulated by a deal signed with Jordanian government in 2014,” he added.

The consortium, he said, is currently in talks with Chinese banks including Bank of China, the Industrial and Commercial Bank of China. “Let us hope we succeed in our endeavours before the year is over,” he added.

According to Maaitah, Estonia’s Eesti Energia AS, which has a 65 per cent stake in the project, is in talks with Chinese investors and Malaysia’s YTL Power International Berhad that already has  a 35 per cent stake in the project, to sell part of its shares to them.

“The talks are very serious in this regard and have reached an advanced stage,” said Maaitah.

According to a deal signed with the government last year, the plant should be operational in the second half of 2018 and is expected to slash the country’s energy bill by $500 million annually as the electricity it will produce will be bought at half the current price.

The facility is expected to utilise Jordan’s vast reserves of oil shale estimated at more than 70 billion tonnes.

Jordan buys around 97 per cent of its energy needs.