Saudi Arabia’s Power & Water Utility Company for Jubail & Yanbu (Marafiq) is looking for a financial adviser to help it formulate a plan for raising money for capital expenditure plans over the next few years.

The utility has asked banks to put in bids for the role by 15 July and several local banks are understood to be planning to pitch for the mandate.

Bankers in the kingdom say that Marafiq has not stipulated a specified amount that it wants to raise, but is considering the idea of refinancing some of its existing bank debt in the local sukuk (Islamic bond) market, and then raising further bank finance.

When a bank is appointed, it is expected to also work on preparing the company’s finances for an initial public offering, which could take place within the next three years.

“This is a very broad mandate covering everything from refinancing their banks in the sukuk market, to raising more money to fund their capital expenditure requirements,” says one Riyadh-based banker, who will pitch for the Marafiq role.

Marafiq has become an active borrower from the Saudi banks over the past few years. In late 2011, the firm raised SR4.5bn ($1.2bn) from banks in a 15-year deal arranged by the UK’s HSBC, following a SR2.5bn 15-year loan that was raised in mid-2010 and arranged by the local Samba.

Both deals were considered significant transactions for the Saudi banking sector as they featured long tenors for corporate loans and were priced low.