This article first appeared in The Edge Financial Daily, on May 10, 2016.

KUALA LUMPUR : YTL Power International Bhd (YTL Power) will jointly undertake the oil shale-fired power plant and mine project at Attarat um Ghudran in the Hashemite Kingdom of Jordan, with China’s state-owned utility, Yudean Group.

YTL Power said in a statement yesterday it had entered into equity agreements with its partners for the US$2.1 billion (RM8.42 billion) 554mw oil shale-fired power plant project that is being developed by Attarat Power Company (Apco).

Apco’s existing shareholders, comprising YTL Power, Estonian energy company Eesti Energia AS and Near East Investment Co (Nei), signed the agreement yesterday to introduce the new shareholder, Yudean Group (Yudean), into the project.

This will see Eesti Energia trimming its stake in Apco to 10%, while Nei will exit the project.

Following the completion of the share transfers, which is subject to achieving full financial close, Apco will be indirectly owned by YTL Power (45%), Yudean (45%) and Eesti Energia (10%).

Yudean, an independent power producer, is owned by Guangdong Province (76%) and China Huaneng Group (24%), with significant coal mining operations both in China and Australia. Eesti Energia, whose sole shareholder is the Republic of Estonia, is one of the largest producers of (kerogen) shale oil in the world, the statement read.

YTL Power executive director Datuk Yeoh Seok Hong said the company welcomes Yudean as its partner in jointly leading the development of the milestone project to support the Jordanian government in furthering its policy of energy independence.

“The 554mw oil shale-fired power plant will cover a substantial portion of Jordan’s energy needs 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.

Earlier this year, Apco signed agreements with the Bank of China and the Industrial and Commercial Bank of China to provide debt funding for the project.

The US$1.6 billion debt financing will be provided on the basis of support by China Export & Credit Insurance Corp (Sinosure).

“The sponsors are in the midst of fulfilling a number of conditions precedent to full financial close, including receiving final approvals for the export credit insurance from Sinosure and the government of China.

“The power plant is scheduled to start generating electricity for local consumption in 2019,” read YTL Power’s statement.

In 2014, Apco inked a 30-year power purchase agreement (PPA) with the National Electric Power Company (Nepco), the Jordan state-owned utility, for the entire electrical capacity and energy of the power plant, which carries an option for Nepco to extend the PPA to 40 years.

YTL Power shares closed at RM1.50, with a market capitalisation of RM11.57 billion.