A joint venture of Saudi Electricity Company (SEC) and state-owned oil and gas giant Saudi Aramco has awarded the main contract to UK/France’s Engie to develop the $1.2bn Fadhili independent power project (IPP), SEC has confirmed.

The 1,504MW plant 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 private sector partners. Financing for the project will be raised through the partners and other external sources, the government-controlled utility firm said in a statement to Saudi Stock Exchange (Tadawul), where its shares are traded.

Engie’s banking group, thought to include France’s Credit Agricole and local National Commercial Bank (NCB), is arranging a club loan to finance the project, according to banking sources. NCB is set to cover the entire Saudi Riyal tranche.

The IPP is scheduled to become operational by December 2019, according to SEC.

MEED earlier reported that Engie was the frontrunner for the contract from March onwards, as it was the only bidder left in discussions with the client. Sources in July said that the deal was awarded on 18 July and officially signed at a ceremony on 20 July.

The project has slipped behind schedule, with the client having initially set a target of appointing a successful bidder in December 2015 and signing electricity and steam offtake agreements in mid-January 2016.

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:

• Total power capacity of 1,500MW-1,600MW
• Total steam capacity of 3,190,000 pounds an hour
• Water production capacity of 768.8 tonnes an hour