Local firm raising contractor financing for power project
The local Al-Arrab Contracting Company (ACC) and its Chinese partner Sepco III Electric Power Construction Corporation are due to complete a SR3bn ($800m) loan to finance the development of the electricity component of the Ras al-Zour power and water project.
The financing deal should be completed by the end of June, according to sources close to the deal.
The loan will be a contractor financing with a tenor of three years. The local National Commercial Bank (NCB) and Arab National Bank (ANB) will fund the deal.
Saudi Arabia’s Saline Water Conversion Corporation (SWCC) awarded the contract in early September and construction is due to be completed in early 2014. The plant will have a capacity of 2,800MW.
The Ras al-Zour project was scrapped as an independent water and power project (IWPP) in 2009, leading the developers given the engineering, procurement and construction (EPC) contract on the scheme to start seeking a contractor financing on the project in late 2010 (MEED 21:06:11) .
However, interest from other banks in Saudi Arabia to fund the deal is understood to have been low, leading the local NCB and ANB to fund the whole thing themselves.
Pricing on the deal is described as “very attractive to the borrower” by one source close to the process.
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