Qatar has not built a new power plant since work on the Ras Laffan C facility began in 2008. That plant was a giant for the power sector. Producing 2,700MW, it cost about $3.9bn to build. Japan Bank for International Cooperation (Jbic) lent almost $1.4bn to the project, or about 40 per cent of the total debt requirement.
Now, after five years of not developing any new power schemes, Qatar is back looking for developers and lenders to help it build a new power plant, known as Facility D, which is also expected to cost $3bn or more.
This time, the private sector developer will only be allowed a 30 per cent stake in the project as more will be held by Qatari-government entities. This is less than in other regional independent power projects.
A key part of Jbics mandate is supporting Japanese companies to win international contracts. Since the financial crisis, it has played a hugely important role filling the funding gap left by banks, and has given Japanese firms a strong advantage against international rivals.
In an environment where bank liquidity is still constrained, Qatar needs access to as many different pools of liquidity as possible. It is currently unclear if the terms on offer to the private sector will enable Jbic to participate. Both sides are working to ensure they can be, and it seems likely a compromise will be reached to somehow ensure Jbic is a lender on the project.
If that does not happen, Qatar could find that raising the funding for Facility D is more difficult than previous schemes.