GE will provide four 9FA gas turbines, two C7 steam turbines, and ancillary equipment and services to Al Dur Water and Power Company (Al Dur) to build a 1,234-megawatt combined cycle power plant and a 48 million-gallons-
"This is Ex-Im Bank's first large transaction in support of U.S. exports to Bahrain since the two countries signed a Free Trade Agreement in 2006," said Ex-Im Bank Chairman and President Fred P. Hochberg. "The transaction is in part a result of the many visits to the region made by Ex-Im Bank Director Bijan Kian, whose portfolio includes the Middle East."
"There are more opportunities for U.S. export of goods and services to the Kingdom of Bahrain," said Kian. "While this transaction serves the power sector, there are also opportunities for U.S. exporters in the financial and health sectors and possibly others."
"The support of the U.S. Ex-Im Bank in the financing of the Al-Dur Power & Water project together with the strong participation of other international banks were major contributors towards achieving financial close for the project despite the prevailing conditions of global credit markets," said H. E. Sh. Ahmed Al-Khalifa, Minister of Finance, Kingdom of Bahrain. "It also helped the G.E. consortium, led by GDF Suez and Gulf Investment Corporation, to secure the deal in what was a very competitive and transparent bidding process. We greatly appreciate the involvement of Ex-Im Bank in one of the key infrastructure projects in the kingdom of Bahrain and look forward to further cooperation in our future development plans."
The Al Dur project was to be financed by a private $1.5 billion commercial debt facility. However, in the face of tight global liquidity, private banks reduced their participation in the project and switched from long- to medium-term financing that will necessitate a refinancing during the first five years of debt repayment. To help fill the gap, Ex-Im Bank is extending a 10-year loan and the Korean Export Insurance Corporation (KEIC) will be making a shorter term loan of $275 million.
The Ex-Im Bank loan was approved by the Bank's board of directors -- and loan documents were signed -- less than five months after the initial application to Ex-Im Bank by Al Dur. "The facility involved some creative structuring in consideration of the tight credit markets, particularly for large, long-term transactions,"
The total cost of the project is estimated at $2.1 billion. The Ex-Im Bank loan also covers local costs related to the project and interest during construction.
Ex-Im Bank is the official export-credit agency of the United States. The independent, self-sustaining federal agency, now in its 75th year, helps to create and maintain U.S. jobs by financing the sale of U.S. exports, primarily to emerging markets throughout the world, by providing loan guarantees, export-credit insurance and direct loans. For more information, visit www.exim.gov. Issued on AUGUST 28, 2009
Background:
The FTA with Bahrain entered into force on August 1, 2006, and has already been beneficial in terms of stimulating trade. Total U.S exports to Bahrain were $591 million in 2007, which represents an increase of 25 percent over 2006 and 97 percent over 2004. In 2007, top U.S. exports to Bahrain included vehicles (23 percent) and machinery (17 percent).
The top U.S. states in terms of increased exports to Bahrain were Kansas (2,386 percent), Tennessee (550 percent), Louisiana (508 percent), and Texas (245 percent).
Aircraft, machinery, vehicles, pharmaceutical products, and toys, games and sports equipment. Agricultural commodities that could benefit from an FTA include U.S. meats, fruits and vegetables, cereals, and dairy products. The U.S. is seeking to eliminate tariffs and other duties on trade between Bahrain and the United States on the broadest possible basis, improve intellectual property rights protection, and eliminate barriers in Bahrain’s services markets. Bahrain’s goods exports to the United States in 2003 totaled $378 million, including articles of apparel and clothing accessories, aluminum, fertilizers, organic chemicals, mineral fuels and oils, plastics, and electrical machinery.
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