The three companies in the developer consortium are now the local National Power Company (NPC), with 75 per cent, and the US' CMS Energy Corporation, with 25 per cent. NPC is a 50:50 joint venture between the local AH Al-Zamil Group and El-Seif Group.

The $200 million financing package includes a $140 million debt package and a $60 million equity bridge facility. The debt has a tenor of 15 years and the equity bridge has a tenor of about 30 months, covering construction and a small grace period.

Bankers close to the transaction say that it will end up as a club deal, with another three or four banks likely to join. The banks likely to be most enthusiastic to enter the deal are Arab National Bank, Riyad Bank, Saudi American Bank, Gulf International Bankand Arab Petroleum Investments Corporation(Apicorp).

Invitations were due to be issued to potential subscribers by the end of April and a roadshow is scheduled to be staged in Bahrain. Final close is scheduled for the end of June.

Saudi bankers are watching closely to see where the debt will be priced. It is understood that the deal will have a step-up structure, possibly starting in the range of 110-125 basis points over Libor.

CMS was originally selected in April 2001 as the preferred bidder for the 240-MW IPP. The electricity generated is to be used, along with the steam produced, to serve Sadaf's petrochemical facilities in Jubail.