Refinancing completed for Rabigh 1 IPP

04 July 2016

$1.8bn refinancing includes international debt and Islamic tranche

Saudi Arabia’s Rabigh Electricity Company (Rabec) has completed the $1.8bn refinancing of the 1,204MW Rabigh 1 independent power project (IPP).

According to sources close to the deal, approximately $1.7bn of existing senior debt was financed with $1.83bn, with no conditions attached to special distributions to shareholders on the re-leveraged amount.

Approximately 17.5 per cent of the overall debt came from international US dollar financing, with the balance coming from Saudi banks under Islamic Sharia compliant structures through Saudi Riyal (SR) lending.

The International debt, comprising of about $320m (17.5 per cent), came from:

  • Samsung Life (South Korea), KB Insurance (South Korea), Dongbu Insurance (South Korea)
  • Natixis (France), Standard Chartered (UK), Credit Agricole Corporate and Investment Bank (CACIB), Mitsubishi UFJ Financial Group (MUFG)

The local banks providing debt through Islamic facilities include:

  • Alinma & Al-Rahji under the Wakala Ijara facility (equivalent to $850m, 46.5 per cent)
  • Samba Financial Group (local), Banque Saudi Fransi (local), National Commercial Bank (local), ANB (Arab National Bank), SABB (The Saudi British Bank) under the procurement facility (equivalent to $660m, 36 per cent)

Under the new refinancing, the maturity of the senior debt has been moved to March 2033, the end of the power purchase agreement (PPA), from the previous maturity date in early 2029.

Under the original transaction, the Korea Trade Insurance Corporation (Ksure) covered $400m of international debt. Under the refinancing, Ksure cover has been removed and the US-dollar lending by international banks and insurance companies is on an uncovered basis.

The only bank from the existing syndicate that left the deal was the Bank of China, with CACIB re-entering the financing and Natixis and MUFG new entrants. For the SR Islamic tranche, all banks were retained and ANB came in as a new entrant.

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 Rabigh 1 IPP was commissioned in 2013.

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