Saudi Arabia’s Rabigh Electricity Company (Rabec) is seeking to refinance a $1.9bn loan, according to Reuters.

Rabec is a joint venture of the local Acwa Power and Korea Electricity Power Company (Kepco), which was created to develop the Rabigh independent power project (IPP).

Acwa and Kepco each own 40 per cent stakes, while the Saudi Electricity Company (SEC) owns the remaining 20 per cent.

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

The original $1.9bn project finance deal, with a 20-year term, was signed in 2009.

It was the first project finance transaction to close in Saudi Arabia following the global financial crisis, and so received very poor terms.

“When they financed this, it was at the peak of the financial crisis,” a Riyadh-based banker tells MEED. “There was also significant construction risk as it was the first Chinese EPC [engineering, procurement and construction] project.”

The main contractors were China’s DongFang Electric Corporation and Shandong Electric Power Construction Corporation (Sepco 3).

Rabec is now seeking $2bn over 20 years, according to Reuters.

Despite a recent tightening in liquidity, the terms are expected to be better than those agreed in 2009. The plant has been in operation since 2013, so there is no longer any construction risk.

A mix of local and international banks are expected to participate, with Japanese banks featuring prominently.

The original financers were the local Al-Inma 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 Bank.

“They will complete the deal as soon as possible in 2016,” says the banker. “They don’t want liquidity to tighten further.”