World's largest power and desalination project reaches financial close

The Marafiq IWPP is a 23-year BOOT (build, own, operate, transfer) contract for a 2,750 MW combined cycle power station and a large water desalination facility with a capacity of 800,000 m³/day. The consortium owns 60% of the project, with the remaining 40% 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.
A syndicate of 29 international, regional and Saudi banks are providing loans of US$ 3,443,000,000.

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

Mr Mohammad Abunayyan, Executive Chairman of ACWA Power Projects stated:

"ACWA Power Projects is proud to be participating in what is the largest privately financed water and power project that is currently under development in the world not only because of its size but also because of the significant contribution it will make to the socio-economic development of the Kingdom of Saudi Arabia by providing at competitive tariffs much needed additional water and power supplies to the Jubail Industrial City."

The financing is in 5 tranches: a 22-year loan of US$ 1,572,000,000, an export facility of US$ 645,000,000 provided by the Korea Export Insurance Corporation, an Islamic Ijara facility of US$ 600,000,000, an Equity Bridge facility of US$ 496,000,000 and a Debt Service Reserve Account facility of US$ 130,000,000.

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, Mashreqbank, Shinhan Bank, and Woori Global Markets Asia Limited.

The Islamic Facility is provided by three Saudi banks: Riyad Bank, Al Rajhi Banking & Investment Corporation and National Commercial Bank. The Debt Service Reserve Account facility is provided by Bahrain-based Gulf International Bank.

"The success of this financing is further evidence of the confidence of the banking community in the strength of the consortium and the economic development of Saudi Arabia" said Mr. Hisham Al-Razzuqi, CEO of Gulf Investment Corporation." The industrial base of Saudi Arabia is expanding at a rapid rate and the Marafiq project will help meet part of the demand for power and water. Gulf Investment Corporation is pleased by the level of participation of banks from Saudi Arabia, the Gulf region, Europe, Japan and Korea."