Saudi Acrylic Acid Company has approached banks to fund the development of its $1.5-2bn acrylic acid plant at Jubail.

The financing is split between a $300m commercial bank loan, including $100m standby debt, a $720m loan, and possibly an additional $200m export credit agency funding from the Export-Import Bank of Korea (Kexim). The lenders on the $720m loan will be refinanced in the next two years by loans from the Saudi Industrial Development Fund (SIDF) and the Public Investment Fund (PIF).

The project is a joint venture between local petrochemicals firms Tasnee, Sahara and the US’ Dow Chemical and Germany’s Evonk. Meetings between the project sponsors, their financial advisers and potential lenders have already taken place and banks are due to respond with commitments by 28 October.

The deal is expected to be funded predominately by Saudi banks, with several expressing their intention to fund the deal. However, while Saudi banks are highly liquid and desperate to book new assets, some are disappointed that the commercial bank tranche is so small.

Production at the plant, which is expected to be about 230,000 tonnes a year of acrylic acid and derivatives, is due to start in the first quarter of 2013. A $500m bridge loan was raised to finance the start of construction in May (MEED 20:05:11).