Newsletter No. 241
April 18, 2006

 

MITSUI & CO. TO INVEST IN JORDANIAN ELECTRIC PLANT

Mitsui & Co. will take a 40% share in a new electricity generation project 25 kilometers east of Amman, Jordan. Although the deal has not yet been signed, Mitsui, together with its partner, the US-based AES Corporation, have received preferential negotiating rights from the Jordanian government, and are expected to conclude the agreement this summer. If everything goes as planned, the actual generation of electricity would begin in 2008.

The estimated cost of the deal is US$280 million, of which three-quarters would be provided by loans. These lenders are expected to include the Japan Bank for International Cooperation (JBIC), the Overseas Private Investment Corporation, Mitsui-Sumitomo Bank, and the World Bank.

The fuel for this electric plant will be based on natural gas exported from Egypt. There is a gas field in the Mediterranean Sea off the coast of Sinai near the Gaza Strip. A pipeline will carry the gas from there, down to the Red Sea, and across into Jordan. In other words, this pipeline takes a rather long route in order to avoid passing through southern Israel.

The Nihon Keizai Shinbun, which reported this story, suggests that Jordan will benefit from the increased amount of electricity, and that this may contribute both to the stability of the Hashimite Kingdom, as well as neighboring Iraq.

It will be recalled that King Abdallah II visited Tokyo in December. Among those he met at that time was JBIC Governor Kyosuke Shinozawa.