Jordan signs agreement with intl consortium to generate 800MW electricity

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A consortium of companies headed by Mitsubishi Corporation on Wednesday signed a 25-year deal to sell electricity to National Electric Power Co. (NEPCO) from an $800 million diesel-fired plant being built in eastern Amman.

The three-company consortium, which also includes Korea Electric Power Corp. and Wartsila Development & Financial Services Oy, was awarded the project last year, and will build and operate a diesel engine power plant in the eastern part of the capital city of Amman. The plant will have a maximum output of 600 megawatts, making it the largest reciprocating engine technology power plant in the world. Sales of electricity are expected to begin in 2014.

Facing an annual increase in electricity demand of 4-10% due to economic growth, the government of Jordan enacted a law in 2002 promoting the privatisation of electric power and the implementation of independent power producer (IPP) projects. This is the third IPP project since the law’s enactment and the first able to run on either heavy fuel oil or natural gas.

Jordan is opening up its electricity market to investors to reduce power shortages and meet annual demand growth of as much as 10 percent. Mitsubishi controls about 4,500 megawatts of generation capacity globally and plans to boost that to 6,000 megawatts by 2015, according to the statement.

Amman’s nuclear ambitions are in doldrums after a report issued by the World Nuclear Association – a consortium of industry leaders and nuclear power advocates – claimed the cost of the country’s first nuclear power plant might reach $9.8 billion. Decommissioning and financing costs were not included in the figure.

The association projected construction costs to hit around $4,900 per kilowatt-hour for the planned 1,000-1,100-megawatt reactor,  based its projections on current market rates.

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