US Export-Import Bank backs $2 billion loan for UAE nuclear plant

US Export-Import Bank backs $2 billion loan for UAE nuclear plant

First Ex-Im financed nuclear plant since the late 1990s; U.S. and UAE signed civilian nuclear pact in 2009

September 9, 2012 11:00 by Reuters

The U.S. Export-Import Bank said on Friday it authorized a $2 billion direct loan to Barakah One Co of the United Arab Emirates to purchase U.S. equipment and construction services to build one of the world’s largest nuclear power plants.

The credit line is expected to support approximately 5,000 jobs across 17 U.S. states and has the support of the White House’s National Security Council as well as the departments of State and Energy, Ex-Im Bank said.

“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 U.S. Ex-Im Bank, said in a statement.

The move comes as the United States and other Western powers continue to heap sanctions on Iran for its nuclear program, which they believe is aimed at developing atomic weapons and Tehran says is for peaceful energy purposes.

Ex-Im said the loan is the largest in its history to the UAE and also represents the first new nuclear power plant it has helped finance since the late 1990s.

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

Westinghouse Electric Co LLC, a Pittsburgh, Pa.-based group company of Toshiba Corp, is the largest exporter involved in the transaction and will provide the reactor coolant pumps, reactor components, controls, engineering services, and training, Ex-Im said.

“This work will create and sustain U.S. 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 U.S. jobs,” Ric Perez, president and chief operating officer of Westinghouse, said in a statement.

Barakah One plans to erect four nuclear reactor power-generating units on a coastal strip approximately 220 kilometers (137 miles) from the city of Abu Dhabi.

Reactors supplied by the Korea Electric Power Corp will come online at one-year intervals beginning 2017 and produce 5,600 megawatts gross electricity.

The United States and UAE signed a civilian nuclear cooperation pact in 2009 and followed that a year later with a formal arrangement between the two countries’ nuclear regulators.

The UAE also has entered into a number of treaties and conventions pertaining to the nuclear sector and has signed bilateral agreements on the same subject with South Korea, France, and Japan, among others, Ex-Im said.