13 Jul ACWA Power closes refinancing for 1.2GW Rabigh 1 plant
Saudi Electricity Company and ACWA Power have announced that the Rabigh 1 Independent Power Project has completed US$1.825 million in refinancing of its senior facilities.
The project is housed under Rabigh Electricity Company (“RABEC”) owned by ACWA Power, Korea Electric Power Corporation (KEPCO) and Saudi Electricity Company (SEC).
The project originally achieved financial close in September 2009, which allowed it to successfully finance the construction and commissioning of the 1204-MW fuel oil-fired power project at Rabigh, on the western coast of Saudi Arabia. It was the first project in Saudi Arabia to be procured without a Sovereign Guarantee.
For the first time, the project introduced a Chinese EPC contracting consortium and major power plant equipment of Chinese manufacture in the Gulf. It was the first major project finance transaction in the region after the global financial crisis of 2008-09. The project reached commercial operation in April 2013.
Due to the construction risk and the early operation risk being completely eliminated, RABEC decided to refinance its long-term non-recourse facilities and mandated ACWA Power to implement the refinancing. SEC also helped in securing maximum savings for the stakeholders.
“The refinancing of Rabigh 1 IPP has been achieved under difficult financing conditions and is structurally a win-win for all parties concerned,” said Fahad Alsudairi, CFO of Saudi Electricity Company. “We commend the efforts of the shareholders in taking the transaction to a closure. It demonstrates value creation for shareholders as well as the offtaker.
The uncovered conventional debit in excess of $300 million was provided by a group of Korean Insurance Companies (including Samsung Life and Dongbu Insurance/Hyundai Asset Management) and international commercial banks (Natixis, MUGF, CA-CIB and Standard Chartered Bank).
Rajit Nanda, director of RABEC and chief investment officer at ACWA Power added: “The refinancing of Rabigh 1 IPP project is an important milestone for the Project and its shareholders. That this has been achieved not only in a challenging and dynamic market but also has introduced a significant new pool of liquidity to the infrastructure sector adds to the significance of the achievement.”
According to ACWA Power, this type of financing arrangement represents a new pocket of liquidity for future financing in the region.