US approves $2bn Braka financing
Ex-Im Bank authorises direct loan for nuclear plant development
The board of the Export-Import Bank of the United States (Ex-Im Bank) has approved a US $2 billion direct loan for the Barakah One Company (a Emirates Nuclear Energy Corporation subsidiary), to help fund the UAE’s nuclear power plant development. The loan is the largest transaction for the Bank in the UAE, and is the first time since the late 1990s that the bank has provided financing for greenfield nuclear development.
The US Census Bureau has estimated the credit line will support around 5,000 American jobs, across 17 states.
“The 5,000 American jobs figure speaks volumes about the importance of the transaction to the US economy. But in addition to bolstering American jobs, Ex-Im Bank will make history by backing the construction of the first nuclear power plant on the Arabian Peninsula,” said Ex-Im Bank chairman and president Fred P. Hochberg on the announcement.
Ex-Im has emphasised that the US National Security Council and the Departments of State and Energy all support the agreement. The UAE and US have also signed a number of nuclear cooperation agreements in recent times – including the lengthily-titled “Arrangement Between the Nuclear Regulatory Commission of the US and the Federal Authority for Nuclear Regulation (FANR) of the UAE for the Exchange of Technical Information and Cooperation in Nuclear Safety and Security Matters” back in 2010.
Westinghouse Electric Company, based in Pittsburgh, Pennsylvania, is set to be the largest exporter involved in the deal, and will provide the reactor coolant pumps, reactor components, controls, engineering services and training.
“Westinghouse is delighted that the financing for Emirates Nuclear Energy Corporation four-unit Barakah project has been approved by the Bank’s Board of Directors, and we remain dedicated to ensuring an effective implementation of the project and related loan…Within Westinghouse alone, the Barakah project will allow us to maintain about 600 US jobs,” said Westinghouse Electric Company president and CEO Ric Perez.
In a statement responding to the news, ENEC CEO Mohamed Al Hammadi said “The Emirates Nuclear Energy Corporation (ENEC) welcomes the approval of the US Ex-Im Board of Directors to provide US $2 billion to the Barakah One, a subsidiary of ENEC. This is a very important milestone to meet our objective of announcing a financial agreement in the near term. ENEC is progressing steadily with financial institutions, authorities and regulators to achieve this objective.”
Al Hammadi went on to say that the construction of the four APR-1400 units was a ‘significant’ infrastructure development, and said that it was his organisation’s strategy to supplement the Abu Dhabi government’s investment with funds from Export Credit Agencies such as US Ex-Im, together with commercial banks.
“We are pleased that a leading financial institution such as US Ex-Im has thoroughly analysed the project and concluded that it is safety-driven, technically robust and is commercially and financially well structured. This investment will create thousands of jobs here in the UAE, as well as in the home nations of our suppliers, partners and contractors,” he concluded.
The UAE accounted for around $3.7 billion of the Ex-Im Bank’s total worldwide credit exposure at the end of FY 2011.