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Slaughter and May Advises Eesti Energia, Among Others, on Construction and Financing of Power Station and Mine in Jordan

Slaughter and May Advises Eesti Energia, Among Others, on Construction and Financing of Power Station and Mine in Jordan

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Slaughter and May has advised Attarat Power Company (APCO) and project sponsors Eesti Energia AS (EE) and YTL Power International Berhad (YTL) on the construction and project financing of a 554MW gross oil shale fired mine mouth power station and open cast oil shale mine in Attarat um Ghudran, Jordan.

Financial close of the USD 1.582 million 15-year debt facility, which comprises the entire senior debt requirement for the project, was achieved on March 16, 2017.

Slaughter and May also advised on the sell-down of EE’s equity stake to YTL and to incoming investor Guangdong Yudean Group Co. Limited (Yudean) of P.R. China in advance of Financial Close. APCO is now owned 45% by each of YTL and Yudean and 10% by EE. The shareholders have committed to provide base shareholder funding of USD528 million.

The financing will be provided on the basis of export credit insurance provided by China Export & Credit Insurance Corporation (Sinosure). This is the largest private project financing supported by Sinosure to date.

APCO has entered into a fixed cost fixed term engineering, procurement and construction contract with Guangdong Power Engineering Corporation, a subsidiary of China Energy Engineering Group Co Ltd. Commercial operations of the two units are scheduled for 38 and 42 months from financial close and the power station is scheduled to start operation in mid-2020.

This project is the first to commercially utilize Jordan’s oil shale reserves, and will significantly reduce Jordan’s reliance on imported oil and gas. Power will be delivered to Jordanian state-owned National Electric Power Corporation (NEPCO), the single off-taker, under a 30-year power purchase agreement. With an investment value of USD2.1 billion, the project is the largest foreign direct investment in Jordan to date. The two unit power station will be the first oil shale fired power station and mine project in the world funded by limited recourse project financing.

Slaughter and May acted alongside Ali Sharif Zu’bi Advocates & Legal Consultants in relation to matters of Jordanian law and NautaDutilh in relation to matters of Dutch Law.

The Slaughter and May team was led by Partner Simon Hall, supported by Associates Samay Shah and Philippa Harris.