GE Secures $1.0 Billion in Project Financing for Sharjah’s First Independent Combined Cycle Power Plant
Co-developers GE Energy Financial Services (“GE EFS”) and Japan’s Sumitomo Corporation (“Sumitomo”) along with Shikoku Electric Power Company and Sharjah Asset Management (“SAM”), the investment arm of the Government of Sharjah, have closed financing from leading private financial institutions and the Japan Bank for International Cooperation (“JBIC”), Japan’s export credit agency (ECA), for GE’s flagship 1.8 gigawatts (GW) power project, Hamriyah Independent Power Company (“Project”), in Sharjah, United Arab Emirates (UAE). Securing financing for the Project will lead to the first independent combined cycle power project in the emirate of Sharjah, which is expected to be the most efficient power plant in the Middle East’s utilities sector on completion.
Together, a consortium of banks and JBIC will co-finance the Project for a total private-public co-financing amount of approximately $1.0B. GE EFS worked with multiple private financial institutions including Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank Limited, Norinchukin Bank, Société Générale S.A., Standard Chartered Bank and KfW-IPEX to secure financing, which will be partly insured by Nippon Export and Investment Insurance (NEXI), a Japanese insurance corporation owned by the Japanese government. JBIC will provide a second tranche under its ‘Global Facility to Promote Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth’ (“QI-ESG”), a new initiative launched by the government of Japan in summer 2018 to promote infrastructure development projects that are expected to contribute to global environmental protection.
Simultaneously, the co-developers have formed an equity consortium for the Project with Shikoku Electric Power Company and SAM. The consortium’s role will be to build, own and operate the Project, which will consist of three combined cycle blocks, the first of which is planned to come online in 2021. The Project is expected to reach full commercial operations by the summer of 2023 and will sell its electricity production to SEWA under a 25-year Power Purchase Agreement (PPA).
Susan Flanagan, GE Energy Financial Services’ Global Power Leader, said: “Sourcing financing from the public and private sectors to fund Sharjah’s first independent combined-cycle power plant demonstrates the region’s attractiveness for foreign investment and GE’s ability to connect global capital to significant infrastructure projects. We are proud to partner with Sumitomo to deliver sustainable energy that utilises GE’s state-of-the-art gas turbine technology and financial expertise.”
Norihiko Nonaka, General Manager of Global Power Infrastructure Business Division, Sumitomo Corporation, said: “Sumitomo remains committed to supporting the continuing economic growth in the United Arab Emirates through the delivery of reliable, cost effective, clean and sustainable power from both our existing and new power infrastructure.”
GE will supply three 9HA gas turbines, three steam turbines, six generators, three heat recovery steam generators (HRSG) and turnkey engineering, procurement and construction (EPC) services for its flagship power plant in Sharjah. GE will also provide parts, repairs and maintenance services for the power generation assets at the site for a period of 25 years.
Joseph Anis, President & CEO of GE’s Gas Power Systems and Power Services businesses in the Middle East and South Asia, said: “GE has contributed to the growth of the Gulf Cooperation Council’s (GCC’s) power sector for over 80 years and GE-built technologies generate up to 60 percent of Sharjah’s electricity today. This project is another major milestone in our ongoing collaboration with SEWA and we are honoured to provide technological and financial solutions that support the vision of a sustainable, secure energy future for the people of Sharjah.”
GE’s HA heavy-duty gas turbine is the world’s largest and most efficient. The record-breaking efficiency offered by three of GE’s HA in combined cycle operation will help SEWA reduce carbon dioxide emissions by up to four million tons per year, compared to current levels. This is the equivalent of taking one million cars off the UAE’s roads, substantially reducing the environmental impact of power production in the emirate of Sharjah.
The agreement builds on a history of strong collaboration between GE and SEWA. GE has been at the forefront of bringing industry-leading solutions to support the development of the power sector in the emirate and across the region.
GE provides knowledge, capacity building and training to empower the region’s workforce. Thirty percent of the Middle East and North Africa’s population is between the ages of 15 and 29. In the UAE, we’re partnering with the Mubadala Development Company to build local capacity by empowering local talent through trainings at our Leadership Acceleration for Business (LAB) initiative.
With 76 nationalities working in the region, GE proudly fosters diversity in the workforce. To accelerate the advancement of women, the Women’s Network, an affinity network at GE, creates opportunities for female employees to cultivate their leadership and business skills. GE is not just watching as the region realizes its future; we’re partnering to help build it.