|SUBJECT||USD 350 Million Provided for Morocco’s Thermal Power Plant Project|
The Export-Import Bank of Korea will provide USD 350 million in project financing for the Morocco Jorf Lasfar Thermal Power Plant Construction Project awarded to the consortium of Daewoo E&C and Mitsui & Co.
The project, ordered by the National Office of Electricity (ONE) in Morrocco and sponsored by the Abu Dhabi National Energy Company (TAQA), encompasses the construction and operation of two coal-powered thermal power plants of 700MW.
TAQA, a government-operated energy firm for which 72.5% is owned by the UAE government, is expanding its investments in the oil and gas energy sectors of the Middle East, Northern Africa, North America, and Asia.
The main contracting party, Daewoo E&C, will conduct the EPC* process for the large-scale power plant project, and Mitsui & Co. will be purchasing Japanese equipment necessary for the project.
* EPC (Engineering, Procurement, Construction): an export contract in regards to engineering, procurement of materials and equipment, and construction for the project.
This project is the first application of project financing to a power plant project in Africa.
The Bank helped the Korean firm win the contract by expediently issuing a letter of intent during the bidding stage, which was participated by leading energy companies such as the Alstom Consortium of France.
In addition, the Bank utilized its financial advisory expertise and overseas networks and cooperated with Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) in advance of the contract stage to diversify funding sources.
As obtaining funds for large-scale projects are becoming more crucial in the overseas plant market, this project exemplifies a case of obtaining financing before contracts.
A representative of the Bank stated, “This project is the first utilization of the MOU concluded last September with Mitsui & Co., Mitsubishi Corporation, and Marubeni Corporation for cooperation in overseas projects. We anticipate greater opportunities for Korean companies to jointly participate in large-scale overseas projects in cooperation with Japan.”