SEC-Engie consortium closes $1.2bn Saudi plant refinance deal
RIYADH, January 26, 2022
Saudi Electric Company (SEC) has announced that its consortium with French and Japanese partners has successfully completed the refinancing of $1.2 billion debt for its combined cycle gas-fired PP11 power plant located west of capital Riyadh.
SEC, which has a 50% stake in Dhuruma Electricity Company, said the deal was closed in September. Its other key consortium partners are Engie (20%) Sojitz (15%) and Al Jomaih Energy and Water (15%).
PP11 is a 1,730MW combined cycle gas-fired power plant located near Dhuruma, about 135 km west of the Saudi capital city of Riyadh, which began commercial operations in March 2013.
SEC offtakes the production through a long-term power purchase agreement. The PP11 project originally reached financial close in 2010, raising $1.55 billion of debt, followed by a first partial refinancing in 2016.
Twelve international and local lenders took part in this refinancing: the US dollar denominated tranches are provided by a pool of nine European and Asian commercial banks, while the Saudi Riyals denominated tranches are provided by three local banks.
The refinancing, which demonstrates Engie’s capabilities in structuring large and complex financing transactions, results in optimized terms going forward by bringing down the margin and slightly lengthening the tenor to the benefit of SEC and the shareholders.
In Saudi Arabia, Engie is a lead developer for large IPPs/IWPs as well as it takes equity ownership and acts as operator; the refinancing of PP11 marks an important achievement in ensuring the long term viability of the plant being a reliable power provider to the people of Saudi Arabia.
"Our finance and legal teams have, over the past 18 months, worked closely with the SEC, partners, external counsels and the banks to secure this deal," said a company spokesman.
"Our strong relationships with the banks, favourable market conditions, and the operational track record of the plant were instrumental to the success of the significant refinancing,” he added.-TradeArabia News Service
