Moroccan Power Plant Will Sustain 3,000 U.S. Jobs
FOR IMMEDIATE RELEASE September 18, 1997
Marianna Ohe 202-565-3200
The Export-Import Bank of the United States (Ex-Im Bank) has approved its first project financing on the African continent for the $210 million sale of equipment and services by ABB-Combustion Engineering Systems, Windsor, CT and other U.S. suppliers for the Jorf Lasfar Power Project in Morocco. This limited recourse project financing will help sustain approximately 3,000 American jobs (U.S. Commerce Department estimate) at principal suppliers and subsuppliers around the country.
The transaction pushes Ex-Im Bank's 3-year-old Project Finance Division total authorizations over the $5 billion mark. Project finance authorizations are expected to hit a record $2.6 billion for fiscal year 1997, which ends Sept. 30.
During the construction phase of the Jorf Lasfar project, Ex-Im Bank support will take the form of a political risk guarantee. Upon project completion, the Bank will either replace the guarantee with a direct loan, or continue to provide political risk coverage.
Limited recourse project financing is a type of private financing in which repayment is based on project revenues, rather than a guarantee of the debt by the host country government. Demand for such financing has soared in recent years as developing countries seek to build infrastructure without adding to their governments' debt.
ABB Energy Ventures, Inc. (ABB Energy), Princeton, NJ and CMS Generation (CMS), Dearborn, MI are sponsors of the project which, when complete, will supply over 30 percent of Morocco's total electricity needs. It is Morocco's first private power project.
This project demonstrates our strong commitment to help U.S. exporters compete in emerging African markets, said Ex-Im Bank President and Chairman James H. Harmon. We look forward to financing more such projects which support not only U.S. jobs but also African private sector growth and infrastructure development.
ABB Energy and CMS will build, own and operate two 350-megawatt coal-fired electrical generating units for the Jorf Lasfar power facility. They are the third and fourth units at the plant located in El Jadida province 127 kilometers southwest of Casablanca. Six ABB affiliates will handle engineering, procurement and construction of the new units.
Although vendor selection is not yet finalized, the project will involve over 30 primary suppliers and as many as 100 subsuppliers across the United States. Morocco's state-owned electrical utility -- Office National de lElectricite (ONE) -- will buy the electric power generated. ABB Energy and CMS also are the owners and operators of already-existing Units 1 and 2.
Ex-Im Bank also will provide financing to cover other fees, local costs and interest during construction. Other financers of the project include the Overseas Private Investment Corporation (OPIC), the export credit agencies of Italy (SACE) and Switzerland (ERG), a syndicate of commercial banks led by ABN AMRO Bank, N.V., Credit Suisse First Boston, and Banque Nationale de Paris, and the World Bank Guarantee program.
Ex-Im Bank is an independent federal government agency that supports American jobs by financing U.S. exports around the world. In the past five years Ex-Im Bank has authorized $65.6 billion of financing in over 10,000 transactions. Annually, the Bank sustains an estimated 200,000 U.S. jobs directly, and another one million jobs indirectly.