The group made a profit of €19.8 million on its €30.6 million investment. Success was largely courtesy of a transaction in which Estonians sold 55 percent of developer Attarat Power Company to Malaysian company YTL Power International Berhad and China's Yudean Group.
Eesti Energia will hold on to 10 percent of the company that will start work on Jordan's first self-supplied power plant and a huge oil shale mine this year. The new power plant with a gross generation of 554 MW, nearly twice as powerful as Eesti Energia's Auvere plant, will be completed by 2020. The deal also constitutes the greatest foreign investment in Jordan's history.
“I would like to congratulate the Attarat Power Company for completing the financing of this strategic and unique project in the name of the Jordanian government,” said Minister of Energy and Natural Resources Dr. Ibrahim Saif. “This project is a part of the government's plan to utilize local energy sources, like oil shale, to diversify the kingdom's energy portfolio.”
Massive amount of oil shale
The company has a fixed-price purchase and sale contract for oil shale with the government for a period of 30 years. Jordan is among the few countries in the Middle East that does not have oil but instead owns one of the world's largest oil shale reserves. The country's oil shale reserve is estimated to stand at around 80 billion tons, which is several dozen times as much as Estonia has. If the layer of oil shale in Estonia has a thickness of three meters, the corresponding figure in Jordan is up to 50 meters.
Eesti Energia's oil shale know-how allowed the Power Company to involve financing from the world's largest bank, the Industrial and Commercial Bank of China, as well as Bank of China in the total volume of $1.6 billion. The loan will have a guarantee from the China Export and Credit Insurance Corporation.
Next to the power plant in Attarat Um Ghudarn in central Jordan the company will construct a mine with an annual output of 10 million tons. That is half of Estonia's annual mining volume.
Eesti Energia also owns a concession on constructing oil shale oil mills in Jordan. CEO Hando Sutter said, however, that the company plans to sell its concession and technological know-how to an international corporation.
“Involving $2.1 billion in financing from the world's leading banks and other shareholders is confirmation that the project has been well developed and remains well managed,” Sutter said. “Bringing to a conclusion the financing of a project of this magnitude will surely help open doors for Estonia in terms of similar technology transition projects.”
Minister of Finance Sven Sester said that the billion-dollar project is a notable achievement not just in Jordanian or Estonian context but on a global scale. “It is the most financing an oil shale project has seen to date,” Sester said. “Securing this level of financing and steering the project to a stage where it is possible to launch construction shows that Estonia has valuable know-how to offer to the world, and that Eesti Energia is capable of successfully managing such big and international projects.” The minister added that he is proud of the national energy company as a representative of its owner.
Sutter said that it is worth pointing out the roots of the project go back to 1993 when President Lennart Meri met with King Hussein to discuss potential cooperation in the field of oil shale. Eesti Energia has spent the last eight years working on the Jordan project.
Estonians' major contribution
Director of the Jordan project Andres Anijalg said his team carried out geological surveys of the rock as well as groundwater studies, prepared legislation for the use of oil shale in Jordan, put together an environmental impact report, and acquired necessary permits.
“We have tested Jordanian oil shale, made preparations for the construction of the quarry and power plant, organized major international procurements, signed contracts for construction and mining, infrastructure development, groundwater wells, and construction supervision,” Anijalg said.
The power plant will considerably cut Jordan's dependence on imports, providing up to 15 percent of the country's energy. Jordan currently uses imported energy for 95 percent of its needs. The power plant, to be constructed by China's Guangdong Power Corporation, will create 5,500 jobs while under construction and 1,000 jobs when it comes online. The plant will be designed by international engineering firm WorleyParsons, its fluidized bed boilers built by Foster Wheeler, and its steam turbine and generator supplied by Siemens.
The Jordan project has seen the participation of a lot of Estonian experts over the years. Eesti Energia's project team included professor emeritus Väino Puura, the Ecology and Geology Institute of the University of Tartu, Tallinn University of Technology and its Virumaa College, AF-Consulting, engineering bureau Steiger, Raidla Leijins&Norcous, PwC Eesti, IPT Projektijuhtimine.