Saudi Acwa Power Projects, a power generation company, and Samsung C&T Corporation (formerly known as Samsung Corporation), a company engaged in trading and investment, engineering and construction operations, housing development, and retail business areas, and MENA Fund, a private equity fund of the United Arab Emirates, announced project financing for the construction and development of a gas fired power plant near Khobar, eastern province of Saudi Arabia.
Of the total financing, 50% will be provided by Banque Saudi Fransi, Al-Ahli Bank (National Commercial Bank), Samba Financial Group (Samba), SABB, Saudi Arabia and remaining 50% will be provided by HSBC Bank Middle East Limited, KfW Bankengruppe, Standard Chartered PLC, Sumitomo Mitsui Banking Corporation (SMBC). The financing facilities will include tranches funded or covered by Export-Import Bank of the United States, Euler Hermes S.A. and The Export-Import Bank of Korea (Kexim).
The total installed capacity of the project will be 3,927 MW, comprising six identical groups of equipment of 654.5 MW each. Each group comprises 2 gas turbines (GTS), 2 heat recovery steam generators (HRSG) and 1 steam turbine. Saudi Electricity Company (SEC) signed a deal of SAR10,700m ($2,824.27m) with Saudi Acwa Power and Samsung to build and develop the power project.
The project will burn 600 million cubic feet a day (mcfd) of natural gas for the generation of electricity. The project will be constructed in two phases. The electricity generated from the project will be sold to SEC for next 20 years for 7 halalas per kWh starting from June 30, 2014.
Once the construction of the project is completed, it will be operated by The First National Operation & Maintenance Company (NOMAC), a subsidiary of ACWA Power, under a long-term operation and maintenance contract. Siemens will provide equipment and Samsung C&T will provide engineering, procurement and construction (EPC) contract for the project. The electricity generated from the project will be supplied to the national grid. The project is expected to become operational before the summer of 2014.
Chadbourne & Parke LLP will act as legal advisor to the sponcers with respect to the financing.
Ali bin Saleh al-Barrak, CEO of the Saudi Electricity Co, said, "The fuel will be natural gas and part of it will come from the old, retired gas-fired power plants which are already more than 35 or 40 years old and will be shut down and the allocated gas will be diverted to this power plant."
Mr. Mohammad Abunayyan, chairman of ACWA Power, said, "ACWA Power is proud to be the lead developer of Qurayyah IPP not only because it will be the world's largest combined cycle IPP, but also because we have been able to establish a team of developers, equipment supplier, EPC Contractor, O&M Contractor and debt facility providers who, working together have been able to achieve a 15.5% lower tariff than those of the competing next bidder, thus delivering more than SR1,900m of savings over 20 years to the economy and the people of the Kingdom."
* Indicates Mandatory