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'ENARA' Energy Arabia Acquires 51% of CEGCO Officially

Eleven Agreements Signed in Completion of First Energy Privatization Transaction
Amman - In what is considered the first privatization activity in Jordan's energy sector and a pioneering accomplishment on a regional level for the privatization program undertaken by the Jordanian Executive Privatization Commission since 1996, ENARA Energy Arabia , a company established by JD Energy, the energy investment arm of JD Capital , announced Thursday September 20^th the purchase of 51% of Central Electricity Generating Company (CEGCO) , in a deal valued at USD 320 million including the company's debts as per the date of sale. The announcement took place at a signing ceremony held at the Four Seasons Hotel and was attended by representatives of the Ministry of Energy and Mineral Resources , the Ministry of finance and the Executive Privatization Commission .

The transaction gives JD Energy, Malakoff, the Malaysian electricity giant and the Athens based Consolidated Contractors Company (CCC) represented by ENARA a 51% stake; the government of Jordan will retain 40% and the remaining 9% shares will be transferred to the Investment Unit of the Social Security Corporation.

The success of this privatization process, carried out through an international competitive bid, reflects the high credibility of the Jordanian privatization program on different local, Arab and international levels. It also highlights the importance of the program's role in the enhancement of public-private partnerships.

The selling agreement and another ten different related agreements were signed to officially complete CEGCO 's privatization. A shareholders agreement and a share acquisition agreement were signed by H.E. Hamad Kassabah, Minister of Finance on behalf of the Jordanian Government, H.E Samir Z. Al-Rifai Chairman of JD Energy and ENARA, Ahmad Jauhari Yahya, Managing Director of Malakoff Corporation Berhad ("Malakoff"), Malaysia, Thomas Langford, Group Vice President of CCC and Abdul Fattah Nusoor, CEO of CEGCO . An Implementation Agreement between CEGCO , ENARA and the Jordanian government represented by the Minister of Energy and Mineral Resources, head of the project's Steering Committee was also signed.

A standard Generating License was signed between the Electricity Sector Regulatory Commission (ERC) and CEGCO . Five different power purchasing agreements were also signed between CEGCO and National Electric Power Company (NEPCo) .

Furthermore a fuel supply agreement was signed with Jordan Petroleum Refinery Company , and a gas supply agreement was signed with The National Petroleum Company .

The selling process includes the rental of both Aqaba Central Power Station and Aqaba Thermal Power Station; the former agreement was signed by The Aqaba Special Economic Zone Authority (ASEZA) Chief Commissioner Nader Al-Thahabi on behalf of the Jordanian government. The latter was signed by Eng. Ahmad Hiyasat, GM of NEPCo, and Imad Fakhoury GM of Aqaba Development Corporation (ADC).

Energy Arabia is a new regional energy market entrant. The company was established earlier last year with JD Energy, JD Capital 's energy investment arm owning 65%, leading both Malakoff which has a 25%, and Consolidated Contractors Company which owns the remaining 10% in an international consortium as part of the privatization process. The company is Jordan's first Independent Power Producer (IPP) and is one of the largest portfolios of power generating assets in the region. As an O&M (Operation and Maintenance) company, Enara will provide technical services for both its own power plants and others across the region, in addition to offering consultancy services to existing and potential investors in the power generation industry.

Al-Rifai said: "We are very proud of this announcement, this is JD Capital 's largest investment venture till date, and it is also our first major investment in the energy sector. Our interest in this field stems from our true understanding of its importance in the development of any economy, especially Jordan's. We also realize the increased need in Jordan and the region to find alternative energy resources, which Jordan-Dubai Energy aims to provide."

He added:" ENARA signed today because of both its technical and financial resources. JD ENERGY is a Jordanian company that has substantial financing capabilities and understands what Jordan can offer. The technical and investment experience CCC and Malakoff enjoy in constructing and managing energy generation stations, is quite significant. The completion comes to fortify our commitment in developing the energy sector, capitalizing on its current resources and implementing best practices. We will focus on developing the human resources at CEGCO and work on developing the sector as a whole."

Ahmad Jauhari Yahya, Managing Director at Malakoff reiterated Malakoff's commitment in servicing the energy sector both in Jordan and regionally through ENARA, "We are delighted to be part of this project and this special partnership. We look forward to participating in this significant venture and hope that our technical expertise through it will be instrumental in taking the Middle East energy sector to a whole new level."

Thomas Langford, Group Vice President at CCC added," This first-of-a-kind mega privatization project in the region will add value to our experiences in the energy sector. We will provide this venture with all the needed expertise to enhance the company's performance in the region."

The Central Generating Company CEGCO , established in the late thirties, generates electricity through 5 generating plants across the Kingdom and sells it to the government at a fixed price. The government in turn sells the generated electricity to companies and consumers. This transaction is based on a long term power purchasing agreement with predetermined pricing and it is therefore unlikely that it leaves any direct negative impact on the retail selling prices.

Rothschild, Jordan Arab Investment Bank and Ali Sharif Al Zu'bi's Firm acted as consultants for the government on this transaction; the consultancy fees were covered by a USAID grant.

The next phase will witness the formation of a new board of directors for CEGCO and the settlement of the financial fees and obligations stipulated in the agreements signed.

-Ends-

© Press Release 2007