Fadhili IPP to be only Saudi project finance deal in 2016

20 July 2016

Developer contract was signed on 20 July

The project finance transaction for Fadhili independent power project (IPP) is expected to be the only such deal in 2016, according to senior banking sources in the kingdom.

The developer contract for the Fadhili IPP was awarded to France’s Engie on 20 July. Engie’s banking group includes local National Commercial Bank and France’s Credit Agricole, sources familiar with the project have told MEED.

Neither bank, nor Engie, responded immediately to requests for comment.

Saudi Arabia is normally one of the most important project finance markets in the Middle East.

So far, two IPP refinancings have reached a financial close in 2016. Local Acwa Power and South Korea’s Korea Electricity Power Company (Kepco) refinanced $1.8bn of Rabigh IPP debt. A group led by Engie refinanced $1.2bn of PP11 debt.

Saudi Arabia has also seen an increased level of syndicated loans in 2016, as government related entities are affected by lower oil revenues.

While the kingdom is thought to be moving towards a public private partnerships programme, any lending on new projects will not be arranged until 2017 and 2018.

The engineering, procurement and construction (EPC) work will be carried out by South Korea’s Doosan.

The cogeneration project will be developed on a 20-year power, water and steam purchase agreement (PWSPA), with Saudi Aramco the offtaker for the steam and water components and Saudi Electricity Company (SEC) the offtaker for the produced electricity.

The planned IPP will have:

  • Total power capacity of 1,500MW-1,600MW
  • Total steam capacity of 3,190,000 pounds an hour
  • Water production capacity of 768.8 tonnes an hour

The project owner will create a project company to develop the IPP, with the client holding 50-60 per cent of equity ownership and the successful developer holding the remainder.


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