The local Acwa Power has signed a $2.8bn financing agreement for the development of the Qurrayah independent power project (IPP).

The deal is split between a roughly $2bn commercial debt facility and a $618m equity bridge loan. Banks financing the equity loan are the local National Commercial Bank, Banque Saudi Fransi, Samba and SABB.

The commercial debt tranche is split between about $1.3bn of bank funding and $650 of export credit agency funding, provided by the Export-Import Bank of the US (US Exim), Export –Import Bank of Korea (Kexim) and Hermes of Germany. Banks funding the project debt are the local National Commercial Bank, Samba and Banque Saudi Fransi, Japan’s Sumitomo Mitsui Banking Corporation (SMBC), the UK’s HSBC and Standard Chartered. The deal was signed on 28 November.

Acwa was named first ranked bidder for the 2,000MW Qurrayah scheme in June, but offered project sponsor Saudi Electricity Company (SEC) such an attractive proposal that the size of the project was later increased to 3,927MW, effectively awarding Acwa a planned Qurrayah 2 project.

Financial close of the facilities is expected to occur around the end of 2011, or early in the New Year. The project will be developed on a build-own-operate (BOO) basis on the eastern coast of Saudi Arabia, adjacent to existing SEC facilities at the Qurrayah site.