Trowers & Hamlins advises winning consortium on USD2 billion Saudi water and power project

The Shuqaiq IWPP is the second of three initial government IWPPs, comprising a planned total of at least 20 over the next two decades.

The consortium advised by Trowers & Hamlins is led by ACWA Power Projects (Saudi Arabia), Mitsubishi Corporation (Japan) and Gulf Investment Corporation (co-owned by the six Gulf Cooperation Council nations).[1]

The financing comprises a $1.55bn loan, including a $150m Islamic tranche, and $400m in equity. The international lenders involved are Bayerische Landesbank, Landesbank Rheinland-Pfalz, Standard Chartered Bank and Mizuho Financial Group. Regional banks involved are Samba Financial Group, Riyad Bank and Gulf International Bank.

The Shuqaiq IWPP will produce 212,000 cubic metres of clean drinking water per day with the power generation element producing 850 MW of electricity for the cities of Abha and Jizan.

Leroy Levy, Partner, Trowers & Hamlins, comments: "Strategically this is a big deal for the Saudi Government. It comes hot on the heels of Shuaibah and shows that Shuaibah was not a one off. There is real momentum now. WEC has established itself with real credibility."

Finance documentation was signed on 27 February following an oversubscribed round of syndication. The Power & Water Purchase Agreement was signed on 28 February. Financial close is anticipated to occur by the end of the first quarter.

Leroy Levy adds: "Having closed Shuaibah IWPP last year, this is now two out of two for Trowers & Hamlins in the Saudi power and water sector. The aim is to build on this."