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Eesti Energia sells holding in Jordan project to China's Yudean Group

BC, Tallinn, 09.05.2016.Print version
Eesti Energia is about to sell 45% of the shares in its Jordan oil shale powered power plant and extraction project to the Chinese state-owned company Yudean Group and will remain a minority shareholder in the project with a holding of 10%, informs LETA/BNS.

Attarat Power Company (APCO) announced that its shareholders Eesti EnergiaYTL Power International Berhad (YTL) and Near East Investment (NEI) have signed an agreement to introduce a new shareholder, Yudean Group (Yudean), to the project to develop an oil shale fired 554 megawatt power plant and mine in Jordan. Yudean has agreed to purchase 45% of the shares and YTL a further 15% of the shares with Eesti Energia stepping down to 10% and Near East Investments exiting the project, Eesti Energia told the London stock exchange.


Following the completion of the share transfers, which is subject to a number of conditions, APCO will be indirectly owned by Eesti Energia AS of Estonia, 10%, YTL Power International Bhd of Malaysia, 45%, and Yudean Group of China,45%. Eesti Energia is required to maintain the 10% shareholding for a certain time period defined in project agreements, it said.


The completion of the share purchase agreement and full financial close of the project is subject to achieving a number of further milestones, including receiving final approvals for the export credit insurance from Sinosure and the Government of China.


"Estonia's first ever export of oil shale know-how is becoming reality. In the course of eight years of development we have prepared the establishment of an open-pit oil shale mine and construction of a power plant in Jordan which covers 10% of Jordan's electricity demand. No less important is the fact that we have found funders to carry out the 2.1 billion dollar project," Eesti Energia CEO Hando Sutter said.


The executive director of YTL Power International Berhad, Dato Yeoh Seok Hong, said YTL Power is very pleased to increase its stake to 45% and welcome Yudean to be its partner and jointly lead the development of this milestone project and to support the Jordanian government in furthering its policy of energy independence.


"The 554 MW oil shale fired power plant will cover a substantial portion of Jordan's energy need and reduce the Kingdom's import of oil products for power generation. The sponsors' combined extensive experience in power generation and mining will drive this project to fruition, beginning a process for Jordan to achieve cost effective and reliable energy independence," he said.


Huang Zhenhai, director and general manager of Yudean Group, said: "We are glad to join a project of strategic importance for Jordan that will provide a sustainable, viable and much needed solution to the Kingdom's current and long term energy challenges."


Pointing out that the transaction is still subject to final approvals for the export credit insurance from Sinosure and the Chinese government, Sutter, the Eesti Energia CEO, said that by selling the majority holding Eesti Energia will recover all the costs incurred and still to be incurred in relation to the development of the Jordan project. In addition it will earn income from the sale of the holding and dividend income as majority shareholder in the future.


"We can speak about concrete numbers when the financing of the project has been completed and the sale of the majority shares has taken effect. In accordance with a wish of the Jordanian government, Eesti Energia will remain a shareholder with a holding 10% for five years after the completion of the construction of the power station to strengthen the oil shale competency involved in the project," Sutter said.


The power plant will be built by Guangdong Engineering Power Corporation and the project will be financed by the large Chinese banks Bank of China and Industrial Commercial Bank of China. A guarantee to the loan will be provided by the Chinese export credit agency Sinosure.


Yudean Group is a state-owned company that owns and operates generating assets with a total capacity of more than 29,000 megawatts and extracts coal in China and Australia. Yudean's owners are Guangdong Province with 76% and China Huaneng Group with 24%.


The estimated total investment by Eesti Energia in the Jordan electricity project from the start of the project to the completion of financing is approximately 31 million dollar.

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