Abu Dhabi, UAEWednesday 19 June 2019

GE and co-developer of Sharjah power project secure $1bn financing

Hamriyah Independent Power Project is expected to reach full commercial operation by the summer of 2023

A GE employee examines a component for gas turbine at the company's factory in France. Bloomberg
A GE employee examines a component for gas turbine at the company's factory in France. Bloomberg

A consortium of US industrial giant GE and Japan’s Sumitomo Corporation secured $1 billion (Dh3.67bn) in financing to jointly develop the first independent combined-cycle power project in Sharjah.

The funding, a mix of export credit finance and commercial facilities, will help finish the first 1.8-gigawatt Hamriyah Independent Power Project, which is expected to reach full commercial operation by the summer of 2023, GE said on Monday.

“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,” said Susan Flanagan, power leader at GE Energy Financial Services.

The project, which will consist of three combined cycle blocks, the first of which is planned to come online in 2021, will sell its power to Sharjah Electricity and Water Authority under a 25-year purchase agreement.

A combined-cycle power plant uses both a gas and steam turbine to produce up to 50 per cent more electricity from the same fuel than a traditional utility. Heat let off from the gas turbine – which would otherwise be wasted – is routed to the nearby steam turbine, which in turn generates more power.

A group of banks, together with Japan Bank for International Co-operation (JBIC), will co-finance the project. JBIC will provide a second tranche under its international facility for infrastructure investment "for environmental preservation and sustainable growth", a new initiative launched by Japan in 2018, it said, without specifying the size of the amount.

The co-developers have also formed an equity consortium for the project with Shikoku Electric Power Company and Sharjah Asset Management, the investment arm of government of Sharjah. The consortium’s role will be to build, own and operate the project, according to the statement.

Updated: May 20, 2019 04:58 PM

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