11 September 2012

USEXIM Bank Grants Loan for UAE Barakah Project

On 7 September 2012, the United States Export-Import Bank announced that it had granted the Barakah One Company a $2 billion loan to underwrite the export of US components and services as part of Westinghouse’s involvement in the Korean Electric Power Company (KEPCO) led construction of the United Arab Emirates’ (UAE) first nuclear power plant at Barakah. The loan is the bank’s largest ever transaction in the UAE as well as its first financing of a ’greenfield’ nuclear plant in over a decade. The EX-IM deal comes on the back of official start of construction officially commenced in July 2012 following the receipt of the Construction License from the Federal Authority of Nuclear Regulation. Then in August 2012 the French firm AREVA signed a €400 million contract for supply of fuel to the reactors for the first eight years of operation. Despite the signing of the EX-IM agreement, all the financing for the project is apparently not in place and may not be before the end of 2012. Finalizing the full financial package will be particularly difficult if, as reported, estimated completion costs continue to rise. Nuclear Intelligence Weekly, reported in April 2012 that the estimated completion costs may now be closer to $40 billion, double the initial estimate.