Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. are among five Japanese lenders hired to arrange a loan for Marubeni Corp.'s $1.6 billion power plant project in Oman.
Sumitomo Mitsui Financial Group Inc. and Sumitomo Trust and Banking Co. will also help arrange funds for plant operator Phoenix Power Co., which is 50 percent owned by Marubeni, the government-owned Japan Bank for International Cooperation said on its website Tuesday.
The government lender will offer the maximum of $697 million in loans, it said.
The loan will total about $1.3 billion, said a source who declined to be identified as details are private. The commercial banks and Standard Chartered PLC will provide about $600 million, the source said.
A financial package would allow Marubeni to proceed with its first power project in Oman as it expands electricity generation capabilities abroad.
The project, owned by Marubeni, Chubu Electric Power Co. and two other partners, entails construction of a natural gas-fired power plant in Sur along the Gulf of Oman, with capacity totaling 2,000 megawatts. Commercial operation is slated to begin in April 2013.
Marubeni bought its stake in Phoenix Power in July, allowing it to enter the Mideast nation's power market, the trading company said in a July 14 statement. Phoenix Power will sell electricity from the plant to state-controlled Oman Power and Water Procurement Co. under a 15-year sales contract.