The contracts, which were signed on 11 July, include a power-purchase agreement.

SEC will buy the output of the plant under a 20-year deal, with the first phase of the scheme due to come on line in July 2012. The plant will begin operating in early 2013.

The 1,200MW plant is Saudi Electricity Company's first IPP. The scheme is in Rabigh on the kingdom's west coast and will be developed on a build-own-operate (BOO) basis.

The plant will use heavy fuel oil feedstock. It will be operated by a joint venture of The First National Operation & Maintenance Company, a subsidiary of Acwa, and Korea Western Power Company, a Kepco subsidiary.

A number of local and international banks are providing the project finance for the scheme. The local banks are Al-Inma Bank, Al-Rajhi Bank, Banque Saudi Fransi, National Commercial Bank, Sabb and Samba Financial Group. They are joined by Bank of China, France's Calyon and two UK banks, HSBC and Standard Chartered Bank.

The long term project finance is being structured as a Saudi riyal-denominated Islamic tranche and a dollar-denominated tranche covered by the Korean Export Insurance Corporation (MEED 7:7:09).