Jordan solar fully financed

28 May 2015

All round-one projects have reached a financial close

  • All 12 solar projects in the first round of Jordan’s renewables feed-in tariff scheme have reached a financial close
  • Six projects came close to the final deadline on 31 May 2015

All 12 solar photovoltaic (PV) projects in the first round of Jordan’s renewable energy feed-in tariff scheme have now secured financing.

The last six projects reached a financial close in the last weeks before the May 31 deadline.

This left them a narrow window of opportunity to finalise contracts with Jordan’s National Electricity Company (Nepco).

The projects and their financers are:

Shams Maan

  • Capacity (MW): 52.5
  • Financers: Mizuho (Japan), Japan Bank for International Cooperation (Jbic) and Standard Chartered (UK)
  • Value: finance $129m
  • Developer: Kawar Group (local), subsidiaries of Mitsubishi Corporation (Japan) and Qatar Electricity & Water Company (QEWC)
  • Contractor: First Solar (US)

Arabia One Solar

  • Capacity (MW): 10
  • Financers: FC (Washington-based), Finnfund (Finland)
  • Value: $30m (finance $21m)
  • Developer: Ennera Energy and Mobility (Spain), Hanwha and MASE - Arabia Trading & Consulting (local)
  • Contractor: Hanwha Engineering & Construction (South Korea)

Shamsuna Power Company

  • Capacity (MW): 10
  • Financers: IFC, Arab Bank (Bahrain), Europe Arab Bank (UK-based), FMO (Holland), FinnFund, and OPEC’s Fund for International Development
  • Value: $20m (finance $16m)
  • Developer: Shamsuna (Foursan Capital Partners) (local)

Falcon Maan for Solar Energy

  • Capacity (MW): 20
  • Financers: IFC, Arab Bank (Bahrain), Europe Arab Bank (UK-based), FMO (Holland), FinnFund, and OPEC’s Fund for International Development
  • Value: $50m (finance $23m)
  • Developer: Millenium Energy Industries (local), subsidiaries of the Maccaferri Industrial Group (Italy) and Desert Technologies (Saudi Arabia)
  •  

EJRE Solar Project

  • Capacity (MW): 20
  • Financers: European Bank for Reconstruction & Development (EBRD), Proparco (France)
  • Value: $65m (finance $48m)
  • Developer: Scatec Solar (Norway), European Jordanian Renewable Energy Projects (local) and Quest Energy Investments (Dubai)

Oryx Solar Project

  • Capacity (MW): 10
  • Financers: EBRD, Proparco
  • Value: $30m (finance $24m)
  • Developer: Scatec Solar Jordan

Greenland Solar Project

  • Capacity (MW): 10
  • Financers: EBRD, Proparco
  • Value: $30m (finance $26m)
  • Developer: Scatec, Greenland Alternative Energy (local)

SunEdison

  • Capacity (MW): 20
  • Financers: EBRD, US Overseas Private Investment Corporation (Opic)
  • Value: finance $50m
  • Developer: SunEdison (US)

Jordan Solar One

  • Capacity (MW): 20

(Warda) Rose Company for Power Generation

  • Capacity (MW): 10

Zahra al-Salem Power Generation Company

  • Capacity (MW): 10

Zanbaq for Electricity Generation

  • Capacity (MW): 10

Financers for the above: IFC, Arab Bank, Europe Arab Bank, FMO, FinnFund, and OPEC’s Fund for International Development.

Total Value: $160m

Developer: Adenium Energy Capital (Dubai)

Contractor: Martifer (Portugal)

The first developers, such as Norwegian Scatec Solar and US SunEdison reached a financial close in late 2014, after signing power purchase agreements with Nepco in March.

However, it took over a year for some of the projects to reach a financial close. This was despite the active, cooperative role of international financial institutions, namely the European Bank for Reconstruction & Development (EBRD) and the International Finance Corporation (IFC), part of the World Bank Group, in lobbying the government and arranging finance.

“There was a delay on the Jordanian side with permitting and lands, but the closing went smoothly,” says Clint Steyn, a partner at US lawyers Bracewell & Giuliani, who represented local Arabia Consulting and Trading in a deal, along with local Khalifeh & Partners. “The innovative structure, where one lender financed a number of projects, worked well and saved costs. It will be a good model for renewables projects in Egypt going forward.”

The IFC arranged $207.5m in financing for seven projects, while providing loans of $91.5m itself. These have a 17-year term.

Many developers have already started studies and civil works.

“It’s been tough,” says Tareq Khalifeh, chief operating officer at Modern Arabia Solar Energy (Mase), part of the Arabia Consulting & Trading Group, and lead developer on the Arabia One solar project.

“The development of the project took up to five years. It has been a lengthy, expensive process, which is understandable as it’s a completely new sector,” Khalifeh continues. “It has been a very steep learning curve with lots of roadblocks.”

Mase is also part of the second-lowest bidding consortium for the second round of four 50MW solar PV projects, led by Saudi Oger.

Twenty-four bids were submitted, and successful developers should be selected in the next few weeks.

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