The Dhuruma Electricity Company, led by a consortium comprising Saudi Electric Company (SEC) 50%, ENGIE 20%, Sojitz of Japan 15% and Al Jomaih Energy and Water 15%, successfully completed the refinancing of $1.2 billion debt for its gas fired PP11 power plant in Saudi Arabia at the end of September.
PP11 is a 1,730MW combined cycle gas-fired power plant located near Dhuruma, about 135km 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 the Kingdom of Saudi Arabia, ENGIE is a lead developer on large IPPs/IWPs as well as 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. 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.” Turki Al Shehri, Chief Executive Officer for ENGIE in the Kingdom of Saudi Arabia, said.
