KEPCO-led group raises $3.84 bn financing for subsea transmission network project in UAE

[Photo by MK DB]

Korea Electric Power Corporation (KEPCO) has raised $3.84 billion financing to complete the project to build a subsea transmission network in the United Arab Emirates in a consortium with Japanese and French partners.

According to the state utility firm on Sunday, KEPCO-led consortium has signed $3.1 billion loan agreements with multiple financial institutions last week, without the security of the parent companies.

The bulk of $1.2 billion would come from the Export-Import Bank of Korea and the rest from global commercial lenders such as Japan Bank for International Cooperation (JBIC).

Another $740 million would be put up through equity investment by the KEPCO consortium and Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi National Energy Company PJSC (TAQA) of UAE.

The UAE subsea transmission network project is KEPCO’s first overseas electrical grid investment project and the first project in the Middle East and North Africa that applies high-voltage, direct-current (HVDC) technology. The deal involves 35 years of system operation after construction of the subsea cable and conversion station with 3.2 gigawatt (GW) capacity is complete by 2025.

[Source: KEPCO]

KEPCO won the deal in a consortium with Japan’s Kyushu Electric Power Co. and France’s EDF in December last year. Korea’s Samsung C&T Corp. and Belgium’s Jan De Nul will be in charge of subsea transmission engineering, procurement, and construction.

“The latest fund raising has allowed us to enter actual construction stage as we have finalized contract agreement and approval,” said an unnamed official from KEPCO. “The UAE transmission network project will pave the way for expansion in other overseas electric grid investment projects.”

KEPCO, meanwhile, has recently completed construction of a 60MW Mangilao solar farm in Guam and began commercial operations. It has also launched construction of a 198MW gas combined thermal power plant in Ukudu, Guam.

In Vietnam, KEPCO completed construction of a 1,200 MW Nghison II coal station project earlier than as planned after winning the bid in 2013.

“We plan to carry out selective projects with high profitability given difficult financial conditions,” said the KEPCO official. “We plan to minimize investment funds by securing them through project financing.”

Shares of KEPCO were trading 2.53 percent higher at 20,250 won ($14.2) on Monday morning.

[ㄏ Maeil Business Newspaper & mk.co.kr, All rights reserved]