Power & Water Utility Company for Jubail & Yanbu (Marafiq) has given banks an extra week to respond to the request to provide loans for a SR2.5bn ($667m) loan deal.

The deadline has been extended until 29 May, from 22 May. The deal was launched at the beginning of May.

Marafiq is seeking the loan for the development of several projects it is planning, and is asking banks to provide the money for 15 years. Several banks, however, are understood to have concerns about such a long tenor on a corporate loan. Most corporate loans only last a few years.

“There are definitely concerns about the tenor of this deal and the lack of information about the deployment of the funds,” says one banker close to the deal. “But it is a strong corporate name with a good balance sheet, banks like the utility sector and it is riyal funding, so it should get a good response.”

The utility has plans to develop two new power plants at Yanbu, including an interim power plant with capacity of up to 700MW, followed by a much larger scheme to develop a plant with a capacity of 1,700MW of power and 121 million gallons a day (g/d) of water.