Shouaiba debt details emerge

22 November 2005
Further details were provided to local and international banks at roadshows held in Riyadh and Dubai in late October about the debt package to fund the Shouaiba independent water and power project (IWPP). Responses are due by the third week of November with financial close due in late December, allowing a notice to proceed to be issued to the project company, Shouaiba Water & Electricity Company, in January.

Total project costs are estimated at about $2,500 million and the sponsors are looking for a debt equity split of 80:20, including conventional and Islamic finance and export credits. The conventional facility will be worth $947 million, including a $72 million stand-by facility, with banks asked to provide sub-underwriting commitments of $110 million with a take-and-hold target of $75 million. A general syndication is likely to be launched after financial close.

The Islamic tranche of $225 million will be aimed solely at local institutions and denominated in Saudi riyals. Both commercial tranches have a tenor of 20 years. Germany's Hermes will provide cover of $400 million while Export-Import Bank of Korea (Kexim) will extend a $402 million direct loan. Both export credits portions have a tenor of 17.5 years.

Riyad Bankis acting as overall co-ordinating bank on the transaction. The bookrunners are: Arab Bankand ABN Amrofor regional and international banks on the conventional and Hermes tranches; Riyad Bankon the conventional and Islamic tranches for local banks; and Al-Rajhi Banking & Investment Corporationjointly for the Islamic tranche. The other core mandated lead arrangers (MLAs) are Saudi Hollandi Bankand Kexim. Trowers & Hamlinsis legal adviser to the developers; Germany's ILF Consulting Engineersis technical adviser.

The power and water purchase agreement (PWPA) is due to be signed between Water & Electricity Companyand the project company on 15 November. The developer consortium is a local/Malaysian team of Acwapower, Malakoff Berhad, Khazanah Nasionaland Tenaga Nasional Berhad(MEED 28:10:05).

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