‘The EPC option gives us more control and avoids the risk of higher IRR [internal rate of return] requirements from IWPP sponsors,’ Smith said in mid-February in Dubai.’We have to produce power at the lowest possible cost.’

Expressions of interest are due to be invited from local and international EPC contractors by the end of February. In parallel, Maaden is evaluating responses to requests for qualification (RFQs) from nine developers, submitted in December. However, it is understood that few of the major developers with track records of carrying out IPPs/ IWPPs in the region are among the interested consortia.

The Maaden power plant will have capacity of 1,500 MW of power, as well as a desalination component, and will serve as base load station. It will be connected to the Saudi Electricity Company (SEC) grid to allow for the export of excess power and the import of emergency electricity. The plant will use low sulphur Arab light crude to be provided by Saudi Aramco.

The US’ Bechtel has drawn up a comprehensive feasibility study, outlining both the private and the EPC option for Maaden’s power plant. The legal adviser is the London office of Baker & MacKenzie. No mandate has yet been awarded for the roles of technical or financial adviser. However, if Maaden follows the self-build route the financial mandate may fall under the mandate for the Al-Jalamid phosphate and Al-Zabirah projects held by Riyad Bank and ANZ Investment Bank.