Shouaiba finance hits the market

04 November 2005
The preliminary information memorandum (PIM) was released in late October to banks for the debt package on the Shouaiba independent water and power project (IWPP). The launch of the financing follows the initialling of the power and water purchase agreement (PWPA) between Water & Electricity Company (WEC)and the local/Malaysian developer team of Acwapower, Malakoff Berhadand Tenaga Nasional Berhad on 23 October (MEED 14:10:05).

The sponsors are looking for about $2,000 million of debt out of total project costs estimated at $2,500 million. The financing package will be split between a conventional commercial tranche of about $850 million, a riyal-denominated Islamic tranche of about $300 million and an export credits tranche of some $800 million, backed by Hermes and Export-Import Bank of Korea (Kexim). The tenor is likely to be 20 years.

Roadshows for banks are due to be held in Riyadh on 29 October and in Dubai on 31 October. Banks will be asked to respond to the PIM by the third week of November, with financial close scheduled to take place by the end of the year.

Riyad Bankis the co-ordinating bank and is joint financial adviser with Standard Chartered Bank. The other underwriters are ABN Amro, Arab Bankand Saudi Hollandi Bankon the conventional portion and Al-Rajhi Banking & Investment Corporationon the Islamic tranche.

The Shouaiba project calls for the construction on a build-operate basis of an oil-fired plant with capacity of 900 MW of power and 176 million gallons a day of desalination (see Power & Water).

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