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Eesti Energia: $2.1 billion oil shale project secures funding

Test-mining of oil shale in Jordan.
Test-mining of oil shale in Jordan. Source: (Eesti Energia)

Attarat Power Company (APCO) announced that it has reached financial close for the $2.1 billion project to build the first oil shale-fired power station and open cast mine in Jordan.

With the financial close, Estonian state-owned Eesti Energia has completed the sell-down of its previous 65-percent shareholding in APCO to 10 percent, Eesti Energia told the London Stock Exchange.

Eesti Energia will receive a combined $50.4 million from the sale of these shares and as return of project development costs.

APCO is now owned 45 percent by YTL Power International of Malaysia, 45 percent by Guangdong Yudean Group Co. Limited of China and 10 percent by Eesti Energia.

Its shareholders have committed to providing base shareholder funding of up to $528 million to fund the project.

At the beginning of May 2016, Eesti Energia signed an agreement to sell 45 percent of shares in its Jordan oil shale power plant and extraction project to the Chinese state-owned Yudean Group; it will remain a minority shareholder in the project with a holding of 10 percent. Under the agreement, co-developer YTL International Berhad will increase its stake from 30 to 45 percet and minority shareholder Near East Investments will exit the project.

The project, which represents an investment of $2.1 billion, was to be financed by the Bank of China and Industrial Commercial Bank of China. A guarantee to the loan was to 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 the building of a 554-megawatt oil shale-fired power plant in Jordan is finalized, Guangdong Engineering Power Corporation will begin construction.

Thus far, Eesti Energia has invested approximately €25 million 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: Aili Vahtla

Source: BNS

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