Saudi water and power plant secures $3.44b financing

Abu Dhabi: A consortium of Suez Energy International, Gulf Investment Corporation and the Arabian Company for Water and Power Projects, has completed limited recourse financing for the Marafiq Independent Water and Power Project (IWPP) in Jubail, Saudi Arabia.

A syndicate of 29 international, regional and Saudi banks is providing loans of $3.44 billion to the project.

The Marafiq IWPP is a 23-year BOOT (build, own, operate, transfer) contract for a 2,750-megawatt combined cycle power station and a large water desalination facility with a capacity of 800 million gallons per day. The consortium owns 60 per cent of the project, with the remaining 40 per cent held by Marafiq, the Saudi Electricity Company and the Public Investment Fund.

The power and water output from the facility will be sold under a single off-take contract to a wholly-owned subsidiary of Marafiq.

The EPC contract was awarded to a consortium consisting of General Electric, Hyundai Heavy Industries and Société Internationale de Déssalement.

"This is the largest project finance deal ever signed in the power sector so far. It is a clear demonstration of our strong commitment to both Saudi Arabia and the Middle East", said Dirk Beeuwsaert, Suez Energy International's chief executive officer in a statement sent to Gulf News.

"The arrangement of this combined conventional and Islamic financing providing over 80 per cent of the funds for the project, is a major achievement for all the sponsors."

The financing is in five tranches: a 22-year loan of $1.57 billion an export facility of $645 million provided by the Korea Export Insurance Corporation, an Islamic Ijara facility of $600 million, an equity bridge facility of $496 million, and a debt service reserve account facility of $130 million. The syndicate is led by BNP Paribas, Gulf International Bank and SAMBA Financial Group, together with Bank Saudi Fransi, Arab National Bank, Saudi British Bank, Saudi Hollandi Bank, Arab Petroleum Investments Corporation (Apicorp), Bayerische LB, Bank Of Tokyo Mitsubishi - UFJ, Calyon, Dexia Crédit Local, DZ Bank, Fortis Bank, HSBC, ING Bank, KBC, KfW, Mizuho, Natixis, Royal Bank of Scotland, Sumitomo Mitsui Banking Corporation, Société Générale, Standard Chartered Bank, West LB, Arab Bank, mashreq, Shinhan Bank, and Woori Global Markets Asia Limited.

The Islamic facility is provided by three Saudi banks: Riyad Bank, Al Rajhi Banking and Investment Corporation and National Commercial Bank. The debt service reserve account facility is provided by Bahrain-based Gulf International Bank.