Saudi Electricity Company has extended the deadline for bids to development the Qurayyah power project until 26 March to give two Japanese bidders more time in the wake of a massive earthquake that has brought the country to a halt.
The extension gives bidders an extra week to finalise their proposals. “The Japanese needed more time because the earthquake has forced their local lenders to put things on hold for a while,” says a source close to the bidding.
Six groups are expected to put in bids for the scheme and have put together banking groups to finance their bids.
The local Acwa Power has financial backing from the local National Commercial bank (NCB) and Banque Saudi Fransi, and the UK’s Standard Chartered and HSBC. The same banking group, except for HSBC, is also supporting GDF Suez.
The local Saudi Oger has backing from the local Arab National Bank (ANB) and Samba. Saudi Binladin has financing from ANB and the local Alinma. Japan’s Sumitomo has financing from France’s Credit Agricole and the other Japanese bidder, Marubeni, also has backing from Credit Agricole and Samba. The two Japanese consortiums are also understood to be finalising support from Japanese banks and export credit agency Japan Bank for International Cooperation.
A seventh bidder was prequalified, the US’ AES Corporation, and was believed to have financial support from Alinma and Sabb, the local affiliate of the UK’s HSBC. But they subsequently dropped out of the process.
Once developed, Qurayyah will have a capacity of 1,800-2,100MW.
SEC’s advisory group of the US’ Citigroup, the law office of Mohammad bin Saud al-Rasheed in association with Baker Botts, and Germany’s Fichtner is expected to be formally appointed to act as advisers on a second power project at Qurayyah soon. A source close to the project says that the tender for Qurayyah 2 could be launched in the first half of the year, possibly before the end of May.