Local power developer Acwa Power is progressing with financing plans for Saudi Arabia’s latest combined-cycle gas turbine independent power project (IPP) at Qurayyah.

Acwa Power and Mena Infrastructure Fund submitted the lowest bid for the contract in March at 7.417 hals/unit (1.97 US cents/unit) with a project size of 1,963MW (MEED 1:4:11). Saudi Electricity Company (SEC) received six bids to develop the Qurayyah IPP.

Three export credit agencies (ECAs) are set to lend on the project. They are:

• Kexim (South Korea)
• US-Exim (US)
• Hermes (Germany)

Six commercial banks are in line to provide debt:

• HSBC (UK)
• Sumitomo Mitsui Banking Corporation (Japan)
• Standard Chartered (UK)
• National Commercial Bank (Saudi Arabia)
• Samba (Saudi Arabia)
• Banque Saudi Fransi (Saudi Arabia)

The sponsors are targeting financial close for the end of August/early September. South Korea’s Samsung C&T is the engineering, procurement and construction (EPC) contractor.

Construction of the plant and associated facilities is scheduled to begin no later than August 2011 and the commercial operation date is scheduled for June 2014. The IPP will be built next to SEC’s existing facility at the Qurayyah site.

The project will 50 per cent owned by SEC and 50 per cent by the developer. SEC will buy the entire plant’s output under a 20-year power purchase agreement (PPA). SEC will supply gas to the project company on an energy conversion basis. SEC will source the required gas under a separate arrangement with oil major Saudi Aramco.

The US’ Citigroup is financial adviser to SEC for the tender, while the law office of Mohammad bin Saud al-Rasheed, in association with Baker Botts, is legal consultant. Germany’s Fichtner is technical consultant.