Project Financing for Facility E Natural Gas-Fired Power Generation and Desalination Project in Qatar : Strengthening International Competitiveness of Japanese Companies[...]

• Region: The Middle East
• Infrastructures
• Overseas Investment Loans
• Project Finance

1. The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed on January 15 a loan agreement with RAS ABU FONTAS POWER COMPANY Q.P.S.C., a Qatar company invested in by Sumitomo Corporation, Shikoku Electric Power Company, Incorporated, Korea Southern Power Co., Ltd., Korea Overseas Infrastructure and Urban Development Corporation, Qatar Electricity and Water Company Q.P.S.C., and QatarEnergy Oil and Gas (2). JBIC will provide project financing^*1 amounting to up to approximately USD990 million (JBIC portion) for the Facility E Natural Gas-Fired Power Generation and Desalination Project in Qatar. The facility is co-financed by private financial institutions^*2 as well as the Export-Import Bank of Korea, the Korea Development Bank, and KEXIM Global (Singapore) Ltd., bringing the total co-financing amount to approximately USD2,971 million.
   
2. The project will build, own, and operate an approximately 2,400 MW natural gas-fired combined cycle power plant and an approximately 110 MIGD desalination plant in Ras Abu Fontas, located south of Doha, the capital of Qatar. The electricity and water produced by the plants will be sold to Qatar General Electricity and Water Corporation over a duration of 25 years.
   
3. In the Infrastructure System Overseas Promotion Strategy 2030, approved by the Ministerial Meeting on Strategy relating to Infrastructure Export and Economic Cooperation in December 2024, the government of Japan has established a policy to support the overseas development of infrastructure systems that leverage Japan's strengths in fields such as electric power and energy infrastructure, as well as water supply. Meanwhile, the Qatari government has set the goal of reducing greenhouse gas (GHG) emissions by 42 million tons from 2019 levels by 2040. It also aims to achieve a gradual energy transition by increasing the share of renewable energy generation, while continuing to utilize highly efficient and cost-effective natural gas-fired power plants. Furthermore, in Qatar, as water demand is expected to increase in line with future economic growth, the government is promoting the use of reverse osmosis desalination plants, which offer superior energy efficiency.
   
4. The loan will support a project involving highly efficient natural gas-fired power generation and reverse osmosis desalination technologies, thereby aligning with the policy objectives of both the Japanese and Qatari governments. It will contribute toward maintaining and strengthening the international competitiveness of Japanese industries by financially supporting those Japanese companies that participate in overseas infrastructure projects as well as operate and manage these facilities on a long-term basis. Moreover, Qatar is one of the world's leading producers of natural gas and is one of the key exporters of LNG to Japan. This loan is expected to promote Japan's energy and economic security by further strengthening the multilayered economic ties between Japan and Qatar.
   
5. As Japan's policy-based financial institution, JBIC will continue to provide financial support to assist Japanese companies in expanding overseas infrastructure businesses by drawing on its various financial facilities and schemes for structuring projects, and by performing its risk-assuming function.
   

Note

1. *1
   Project financing is a financing scheme in which repayments for a loan are made solely from the cash flow generated by the project.
2. *2
   Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Woori Bank, Ahli Bank, Bank of China, DZ Bank, and KEB Hana Bank.