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Project Financing for Fujairah F3 Natural Gas-fired Combined Cycle Power Plant in the Emirate of Fujairah, UAE
Supporting Overseas Business Development of Japanese Company under the Growth Investment Facility

  • Region: The Middle East
  • Infrastructures
  • Environment
  • Overseas Investment Loans
  • Project Finance
 July 7, 2020
  1. The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed a loan agreement*1 with Fujairah Power Company F3 LLC (FPCOF3) in the Emirate of Fujairah (Fujairah), the United Arab Emirates (UAE), in which Marubeni Corporation holds an equity stake. JBIC will provide project financing*2 amounting up to approximately USD470 million (JBIC portion) for the Fujairah F3 Natural Gas-fired Combined Cycle Power Plant located in Fujairah, under JBIC's Growth Investment Facility*3. The loan is co-financed with private financial institutions, including Mizuho Bank, Ltd, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, BNP Paribas Fortis SA/NV and Standard Chartered Bank. The total co-financing amount is approximately USD941 million.
      
  2. In this project, FPCOF3 will build, own and operate a 2,400MW natural gas-fired combined cycle power plant located in Qidfa, Fujairah. The electricity produced by the plant will be sold to the Emirates Water and Electricity Company in the Emirate of Abu Dhabi (Abu Dhabi) for 25 years.
      
  3. In its Export Strategy for Infrastructure System revised in June 2019, the Japanese government expressed its intention to promote expanding orders for infrastructure systems, including the design, construction, operation and management of infrastructure, as well as increasing investments in local businesses. In addition, in the Strategic Energy Plan released in July 2018, the government is calling for the strengthening of the international competitiveness and overseas expansion of the energy industry by promoting the market entry by Japanese companies, with support from financing from policy-based financial institutions. This loan is in line with these policies of the government as it will contribute to Japanese industry maintaining and enhancing its international competitiveness by financially supporting those Japanese companies that invest in overseas infrastructure projects as well as operate and manage these facilities on a long-term basis.
      
  4. The UAE government aims to increase the contribution of clean energy as part of UAE Energy Strategy 2050. The project is therefore aligned with the energy policy of the UAE government which promotes construction of highly-efficient, highly-flexible energy plants that meet the growing energy demand and ensure a sustainable growth for the UAE economy.
      
  5. As Japan's policy-based financial institution, JBIC will continue to provide financial support to assist Japanese companies in developing their overseas infrastructure businesses by drawing on its various financial instruments and schemes for structuring projects as well as by performing its risk-assuming function.
      
Note
  1. *1 
    The loan agreement was signed on May 21, 2020.
  2. *2 
    Project finance is a financing scheme in which repayments for a loan are made solely from the cash flows generated by the project.
  3. *3 

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