Several new banks have joined the lending group to fund the $2.5bn Rabigh 2 power plant that was awarded to the local Acwa Power in January.

Once completed, the deal is expected to be the first project finance transaction to reach financial close in Saudi Arabia this year, and the 26-year debt will also be the longest ever project finance deal in the kingdom.

The banks, which joined the deal are the local Al-Rajhi Bank, Alinma Bank and Samba. They have joined the local Banque Saudi Fransi and National Commercial Bank, and the UK’s Standard Chartered, which had already underwritten the debt. Japan’s Mizuho is also understood to have joined the dollar lending tranche with Standard Chartered.

“Not all the banks are entirely confirmed for the deal yet, but they will be soon and the syndication is now closed,” says one source close to the project.

Around $1.5bn of the almost $2bn debt is expected to be provided in a 26-year Saudi riyal tranche from the local banks, with the two international banks providing the rest in a 23-year tranche.

Saudi Electricity Company (SEC) selected Acwa to develop the project on 13 January.

Bankers close to the deal say the financing for the project is now in the documentation phase, and should be closed in the first quarter.