Saudi Arabia’s Rabigh Electricity Company (Rabec) is close to agreeing a $2bn refinancing for its Rabigh independent power project (IPP), sources have told MEED.

Local investment and pension funds will provide a new pool of liquidity for the refinancing.

The new debt will include US dollar and Saudi riyal tranches, and will have a 17-year tenor.

The structure of the project finance deal has not changed since the original 20-year $1.9bn agreement signed in 2009. As the first project finance transaction to close following the 2008 global financial crisis, Rabec was forced to accept very poor terms.

The new terms are thought to be better, despite tighter liquidity across the GCC.

The local Acwa Power and South Korea’s Korea Electricity Power Company (Kepco) each own 40 per cent stakes in the Rabigh IPP, while state-owned Saudi Electricity Company (SEC) owns the remaining 20 per cent.

The refinancing was delayed slightly while SEC finalised a $2.1bn revolving credit facility in late 2015 and early 2016.

The IPP has a capacity of 1,320MW and cost $2.5bn.

The original financiers were the local Alinma Bank, Al-Rajhi Bank, Banque Saudi Fransi, National Commercial Bank, Sabb and Samba Financial Group. They were joined by Bank of China, France’s Calyon and two UK banks, HSBC and Standard Chartered.

In other project finance deals, Dhuruma Electricity Company refinanced $1.2bn of debt on its PP11 IPP in the kingdom in the first quarter, also securing more favourable terms. The firm is jointly owned by SEC (50 per cent), and a consortium of UK/French Engie, the local Aljomaih Group and Japan’s Sojitz Corporation.