Although the phrase ‘largest-ever’ has taken on less and less importance over the past few years in the Middle East, the Marafiq Independent Water and Power Project (IWPP) in Jubail, northeast Saudi Arabia, certainly seems to be deserving of the label.
The 23-year BOOT (build, own, operate, transfer) contract for a 2,750MW combined cycle power station and a large water desalination facility with a capacity of 800,000 m2/day is such an ambitious endeavour for the sector that a syndication of 29 international, regional and Saudi banks is providing loans of US$1.7bn.
According to the companies, the financing will be provided in five stages: a 22-year loan of US$750mn, an export facility of US$320mn provided by the Korea Export Insurance Corporation, an Islamic ijara facility of US$300mn, an equity bridge facility of US$250mn and a debt service reserve account facility of US$65mn.
The actual construction for the effort will be led by a consortium consisting of Suez Energy International, Gulf Investment Corporation and the Arabian Company for Water and Power Projects. The consortium owns 60% of the project, with the remaining 40% held by Marafiq, the Saudi Electricity Company and the Public Investment Fund.