Project Financing for First Large-Scale Solar PV Project in Qatar
Supporting Overseas Business Development of Japanese Company under Growth Investment Facility
- Region: The Middle East
- Overseas Investment Loans
- Project Finance
The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed a loan agreement*1
with Siraj (1) (SIRAJ1) of Qatar, in which Marubeni Corporation holds an equity stake. JBIC will provide project financing*2
amounting up to approximately USD165 million (JBIC portion) for the Al Kharsaa Solar PV Plant located in Qatar, under JBIC's Growth Investment Facility*3
. The loan is co-financed with Mizuho Bank, Ltd. and the total co-financing amount is approximately USD330 million.
In this project, SIRAJ1, which was established by Marubeni Corporation together with Qatar Petroleum, Qatar Electricity & Water Company Q.P.S.C., and TOTAL S.A. will build, own and operate an 800MW solar PV plant in Al Kharsaa, located approximately 80km to the west of Doha, the capital of Qatar. The electricity produced by the plant will be sold to Qatar General Electricity and Water Corporation for 25 years. The project is the first large-scale solar PV project in Qatar.
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 the infrastructure, as well as increasing investments in overseas 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 overseas 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.
The Qatari government is promoting the deployment of renewable energy as part of its National Vision 2030 and it aims to increase the proportion of renewable energy in the country's total electricity generation to 20% by 2030. This project is therefore aligned with the energy policy of the Qatari government. Moreover, Qatar is one of the world's leading producers of natural gas and is one of the key exporters of LNG to Japan. This loan is expected to contribute to further strengthening of the multilayered economic ties between Japan and Qatar.
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.
The loan agreement was signed on July 13, 2020.
Project finance is a financing scheme in which repayments for a loan are made solely from the cash flows generated by the project.