The combined cycle power plant is expected to be the region’s most efficient when it begins operations
$1bn in project financing has been secured from a consortium of banks and Japan Bank for International Cooperation (JBIC) by GE Energy Financial Services (GE EFS) and Sumitomo Corporation. The funds will be used to develop an independent combined cycle power project in Sharjah, UAE.
The Hamriyah Independent Power Project is expected to be the most efficient power plant in the Middle East’s utilities sector on completion, it is expected to generate 1.8-gigawatts (GW) of power. Co-developers includes Shikoku Electric Power Company and Sharjah Asset Management (SAM), the investment arm of the Government of Sharjah.
According to a statement, GE EFS worked with several 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. The funds will partly be insured by Nippon Export and Investment Insurance (NEXI).
“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,” said Susan Flanagan, GE Energy Financial Services’ Global Power leader.
JBIC’s portion of the funds will be provided under its ‘Global Facility to Promote Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth’ (“QI-ESG”) initiative. The initiative was launched by the Japanese government in summer 2018 to promote infrastructure development projects that are expected to contribute to global environmental protection.
Norihiko Nonaka, GM of Global Power Infrastructure Business Division, Sumitomo Corporation added, “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.”
The co-developers are said to have formed an equity consortium for the project with Shikoku Electric Power Company and SAM. The consortium will be responsible for the construction and operation of the plant and will also be recognised as the owners. The project consists of three combined cycle blocks, the first of which is planned to come online in 2021. The power station 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).
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 the project, which it bills as 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 concluded, “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% 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.”