Three other financial institutions have joined the transaction, which has been structured as a club deal. They are Arab National Bank, Riyad Bankand Arab Petroleum Investments Corporation (Apicorp). The participants in the deal were offered $35 million tickets with fees of 110 basis points (bp).

The facility is made up of three tranches. The first, a $152 million, 15.5-year term loan, has a step-up pricing structure that starts at 100 bp over Libor, rising in three steps to 140 bp. The second component is a $7.5 million stand-by facility, which is priced 10 bp above the term loan. The third part is a $10 million bonding facility. The original plans for a $60 million equity bridge loan have been discarded (MEED 23:5:03).

The Sadaf IPP will be developed by a consortium comprising the local National Power Company (NPC), with 75 per cent, and the US' CMS Energy Corporation, with 25 per cent. NPC is a 50:50 joint venture between the local AH Al-Zamil Group and the El-Seif Group (MEED 25:4:03).

The transaction is an important landmark in the development of private power in Saudi Arabia. It will be the first independent power project (IPP) and, despite its status as a captive plant, the financing structures will be closely examined by those preparing to bid for the independent water and power projects (IWPPs) planned by Saudi Electricity Companyand the Saline Water Conversion Corporation (MEED 11:7:03, Power & Water).