France’s Engie is preparing to sign a project finance agreement imminently for its $1.2bn Fadhili independent power project (IPP) in Saudi Arabia.

The financing has four tranches:

  • International commercial tranche – Japan’s Sumitomo Mitsui Banking Corporation (SMBC), Bank of Tokyo Mitsubishi UFG and Germany’s KfW.
  • Local Islamic tranche – National Commercial Bank
  • Export credit agency tranche with Korean institutions
  • An Islamic tranche from the Jeddah-based Islamic Development Bank ($105m)

Spain’s Banco Santander and France’s Credit Agricole are not participating in the transaction as previously announced by the Saudi Electricity Company (SEC).

A joint venture of SEC and state-owned oil and gas giant Saudi Aramco awarded the main contract to UK/France’s Engie to develop the power and steam plant in July 2016.

The 1,504MW IPP will be built on a build, own, operate and transfer (BOOT) basis.

The special project vehicle is 30 per cent owned by SEC, 30 per cent by Aramco and 40 per cent by the private sector partners.

The EPC contractor in the Engie consortium is South Korea’s Doosan.

The cogeneration project is scheduled to be developed on a 20-year power, water and steam purchase agreement (PWSPA), with Aramco the offtaker for the steam and water components and SEC the offtaker for the produced electricity.

The proposed IPP will have steam capacity of 3,190,000 pounds an hour and water production capacity of 768.8 tonnes an hour

The IPP is scheduled to become operational by December 2019.