KfW IPEX-Bank finances a modern combined cycle power plant in the Emirate of Sharjah
Press Release from 2019-06-25 / KfW IPEX-Bank
KfW IPEX-Bank is involved in financing a modern and highly efficient 1,800 MW combined cycle power plant in the emirate of Sharjah in the United Arab Emirates. The total investment volume is approximately USD 1 billion, with KfW IPEX-Bank's contribution standing at USD 132 million. The loan funds of the project and export finance arm of KfW Group are mainly covered by the Japanese export credit insurance NEXI (Nippon Export and Investment Insurance). The additional financing is provided by a club of international commercial banks and the Japanese governmental lender JBIC.
The combined cycle power plant will be fueled by natural gas obtained from LNG, and is designed to meet the rising energy demand in Sharjah and reduce the emirate’s dependence on electricity imports. In addition, the new power plant will contribute to the modernisation of the emirate’s power supply as it will also replace older oil-fired power plants. KfW IPEX-Bank's involvement is based on financing European exports: in this case the gas and steam turbines will be manufactured at GE’s Belfort, France location. GE will provide equipment and turnkey engineering, procurement and construction (EPC) services for the power plant. GE will also provide parts, repairs and maintenance services for the power generation assets at the site for a period of 25 years.
"This financing enables us to support our core customer, Sumitomo, whom we have known for many years as a purchaser of German and European equipment", said Markus Scheer, member of the KfW IPEX-Bank Management Board responsible for the sector department Power, Renewables and Water. "At the same time, we are expanding our expertise in financing highly modern, efficient conventional power plants to ensure a stable and reliable power supply – a critical part of a successful energy transition."
The investors of the 1,800 MW power plant are the Japanese Sumitomo Group, the US-based GE Energy Financial Services and the Shikoku Electricity Power Company, also from Japan, as well as Sharjah Asset Management Holding. The equity consortium’s role will be to build, own and operate the project.
With this financing, KfW IPEX-Bank is positioning itself in the GCC project finance market as an institution that finances power infrastructure and, at the same time, is contributing to environmental protection and climate change mitigation.