US bank grants $2bn loan to build world’s largest nuclear power plant in UAE

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Model nuclear reactor the UAE is constructing under a civilian nuclear energy programme. Photo – Yochi Dreazen/Pulitzercenter.org

Barakah One Company of the UAE has received authorisation from  the US Export Import Bank for $2 billion in direct loan, to purchase US equipment and construction services, to build one of the world’s largest nuclear power plants in Abu Dhabi.

The Export-Import bank stated that it has the backing of White House’s National Security Council and that the Department  of State and energy.  According to estimates derived from US Census Bureau statistics, the line of credit  is expected to support nearly 5000 jobs across 17 US states .

Incidentally,  the move comes at a time when US and other Western nations are imposing further sanctions on Iran for its alleged nuclear programme for development of atomic weapons, despite Tehran’s insistence on nuclear energy for civilian purposes.

“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,” Fred Hochberg, president of the US Ex-Im Bank, said in a statement.

The loan ranks as Ex-Im Bank’s largest transaction in the UAE to date and counts as Ex-Im Bank’s first greenfield nuclear-plant financing since the late 1990s.

At the end of the 2011 budget year, Ex-Im had about $3.7bn of credit exposure in the UAE.

Ex-Im also said that Westinghouse Electric Co, a Pittsburgh-based group company of Toshiba Corp, will provide engineering services, training, reactor components,controls and reactor coolant pumps for the UAE Power plant, and will be the biggest exporter beneficiary  in the transaction. Employing approximately 9,000 people in the United States, the company retails fuel, technology, plant design, and equipment to customers in the nuclear power industry. Westinghouse nuclear power plants are currently under construction in China and the United States, among others.

“This work will create and sustain US jobs in California, Connecticut, New Hampshire, Ohio, Pennsylvania, South Carolina, Texas and other states home to Westinghouse sub-suppliers. Within Westinghouse alone, the Barakah project will allow us to maintain about 600 US jobs,” Ric Perez, president and chief operating officer of Westinghouse, said in a statement.

Barakah One has plans to install four nuclear reactor power-generating units in its coastal strip ,about 220 kms from Abu Dhabi.

The Ex-Im Bank, along  with various US and UAE governmental agencies, has conducted a detailed and extensive risk assessment of the project. The Federal Authority for Nuclear Regulation of the UAE established an internal task force to determine the safety implications and assessing the  lessons-learned of the Fukushima accident. It also established  a process of outreach to the IAEA and other nuclear regulatory bodies throughout the world.

Korea Electric Power Corp will supply the reactors which will come online at one year intervals, from 2017 onwards to produce a whopping 5,600 megawatts gross electricity.

The US and UAE had signed a civilian nuclear co-operation pact in 2009 and subsequently had a formal arrangement between the two nation’s nuclear regulators.

The UAE has also signed  bilateral agreements pertaining to the nuclear sector, with South Korea, France and Japan , Ex-Im said.

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