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Acwa Power has reached the financial closure the Shuaibah Expansion II IWP Project PPP in Saudi Arabia. 

The total project costs of US$315 million will be financed through Commercial Base Facilities split across a US$167 million Floating Rate Tranche and a US$100 million Fixed Rate Tranche. The remaining costs will be funded by an Equity Bridge Loan based on a debt-to-equity ratio of 85:15. An additional Commercial Standby Facility was also raised to fund any potential cost overruns. The tenor runs for 23.5 years door-to-door with a balloon.

The original bank pool comprises Natixis, MUFG, SCB and KDB, with Natixis’ two Korean NBFI partners, Samsung Life Insurance and KB Insurance, also being lenders of record as at signing date.

The Shuaibah Expansion II IWP Project consists in a greenfield reverse-osmosis desalination plant to be located in Saudi Arabia with a capacity of 55 Million Imperial Gallons per Day (MIGD) at completion.

The project was procured by Water & Electricity Company (WEC) following an unsolicited biding proposal from ACWA to develop the plant on a Build, Own and Operate basis. The Project will address an urgent shortage of 55 MIGD of desalination capacity by 2019, as identified by the Ministry of Environment, Water & Agriculture. The project will be located in the Makkah Region, where 99% of the water resources are backed by desalination plants.

Construction of the project is scheduled to last for c. 2 years with scheduled commissioning set for the first half of 2019. The EPC contractor is a joint-venture comprising Fisia, a fully owned subsidiary of Salini Impregilo and Abeinsa, a subsidiary of Abengoa.

The plant’s entire desalination capacity and water output is contracted for 25 years post-completion to WEC under the terms of the Water Purchase Agreement (WPA) signed between the project Company and WEC.