Saudi Electricity Company has closed an oversubscribed US$1bn financing facility from a group of 13 international lenders, backed by Italian export credit agency (ECA) Sace.
The deal was announced following last month’s Italy-Saudi Arabia Business Forum in Riyadh, and is expected to strengthen trade relations and industrial cooperation between Italy and Saudi Arabia, particularly in the energy sector, Sace said.
Sace’s guarantee is part of the agency’s Push strategy of untied financing not associated with specified Italian exports.
Intesa Sanpaolo acted as sole facility coordinator and sole bookrunner. It also served as green loan coordinator, with the facility including a green tranche aligned with sustainability targets agreed among all participants.
BBVA joined as agent bank, and the other lenders were not named by Sace.
As part of the agreement, Saudi Electric Company – which provides electricity production, transmission and distribution across the Middle East and North Africa – is intended to increase procurement of Italian goods and services.
This will be facilitated by promoting opportunities for Italian suppliers in the energy value chain and carrying out business-matching initiatives in the Italian industrial sector, Sace said.
Sace has also signed a reinsurance agreement with the Saudi Export-Import Bank, announced on November 25, which the Italian ECA said enhances the duo’s joint capacity to “facilitate export credit initiatives”.
“The partnership leverages the complementary strengths of both institutions to promote international trade flows and create new business opportunities for Italian and Saudi companies,” Sace said.
The agreements further strengthen Italy’s economic ties to Saudi Arabia.
In January, Sace backed a US$3bn financing package to support the development of the Neom mega-project in the country’s northwest, the largest untied facility it had ever guaranteed.
It said at the time that Italian suppliers and contractors had already secured contracts worth more than US$6bn in relation to Neom.
The value of guarantees provided under the Push strategy is more than US$15bn, Sace told GTR earlier this year, with untied facilities extended to sovereign borrowers in several countries, including Mexico, Serbia, Côte d’Ivoire, Senegal and Benin.
