- Region: The Middle East
- Overseas Investment Loans
- Project Finance
January 19, 2015
The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed on January 18, a loan agreement totaling up to USD77 million (JBIC portion), provided in project financing, *1with Shams Ma'an Power Generation PSC (Shams Ma'an), a Jordanian company invested by Mitsubishi Corporation (MC), Nebras Power Q.S.C., a Qatari company, and Kawar Investment Company LLC in the Hashemite Kingdom of Jordan (Jordan), in the presence of Prime Minister of Japan H.E. Shinzo Abe and Prime Minister and Minister of Defense Abdalla Ensour, taking an opportunity of Prime Minister of Japan H.E. Shinzo Abe's visit to the Middle East, for a photovoltaic power generation project in Jordan. The loan is cofinanced with Mizuho Bank, Ltd. and Standard Chartered Bank, bringing the total cofinanced amount to USD129 million with NEXI providing insurance on the cofinanced portion by the private financial institutions.
This loan is intended to finance the construction and operation of a photovoltaic power generation plant in Ma'an Governorate, Jordan, by Shams Ma'an, invested by MC, and to sell electricity to the National Electric Power Company for 20 years. Thereby, JBIC contributes to maintaining and strengthening the international competitiveness of Japanese companies.
The Japanese government announced the strengthening of support for receiving system orders, including the design, construction, operation and management of infrastructure, and business support through public finance under "Infrastructure Systems Export Strategy" revised in June 2014 and also of supporting developing countries in the field of global climate change with "Actions for Cool Earth (ACE)" announced in November 2013. This loan is consistent with these Japanese government policies.
In Jordan, increasing its power generation capacity is an urgent matter, as demand for electricity has been growing seven percent per annum on average against the background of steady economic growth. The Government of Jordan is also promoting the development of renewable energy, including photovoltaic energy, to diversify its electric power sources and enacted in 2010 a renewable energy law targeting to develop approximately 1,600 MW of renewable energy by 2020. This project is in line with the policy of the Jordanian government and is expected to be an important power supply source originating in renewable energy in Jordan.
As Japan's policy-based financial institution, JBIC will continue to support the overseas business deployment of Japanese companies, by drawing on its various financial facilities and schemes, and performing its risk-assuming function.
- *1 Project finance is a financing scheme in which repayments are made solely from cash flows generated by the project and secured only on the project assets.