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China approves funding for Eesti Energia's Jordan project

China has approved funding for the Jordanian oil shale project of the Estonian state-owned energy group Eesti Energia, removing the last obstacle to the signing of the €2.2 billion investment agreement.

"We have been informed by Chinese authorities that the Chinese government has confirmed a loan guarantee to the Jordanian electricity project," Kaarel Kuusk, Eesti Energia's communications manager, told BNS on Monday.

"The Chinese government's confirmation is a final and decisive one," he continued. "We now hope to complete the necessary procedures during February to bring the financing process to a successful conclusion."

In early May 2016, Eesti Energia signed an agreement to sell 45 percent of the sahres in its Jordan oil shale power plant and extraction project to Chinese state-owned company Yudean Group and will remain a minority shareholder in the project with a holding of ten percent. Under the agreement, co-developer TYL International Berhad will increase its stake from 30 to 45 percent and minority shareholder Near East Investments will exit the project.

The Jordanian project, which represents an investment of $2.2 billion, will be financed by the large Bank of China and Industrial Commercial Bank of China. A guarantee to the loan will be provided by Chinese export credit agency Sinosure. The implementation of the agreement was pending on the approval of Chinese financiers.

Once the agreement on building a 554/megawatt oil shale-fired power plant in Jordan is finalized, Guangdong Engineering Power Corporation will begin construction.

Eesti Energia has thus far invested approximately 25 million euros in the project and expects to exit it without a loss, CEO Hando Sutter has previously stated. According to Sutter, the exact numbers will be made public after the final financing arrangement has been agreed upon.

Editor: Editor: Aili Vahtla

Source: BNS

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