ICBC contributes $70.22 million USD to a $632 million USD syndicated loan for the Shuaibah 3 Independent Water Project (IWP) Project (Linked to Record ID#101494)

Project narrative

On October 12, 2022, a syndicate of nine banks — including the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) — signed a $632.00 million USD syndicated senior loan agreement with Shuaibah Three Water Desalination Company —a special purpose vehicle and joint venture of Saudi utility developer ACWA Power Company (50% equity stake), and Water & Electricity Holding Co. (Badeel) (50% equity stake) — for the Shuaibah 3 Independent Water Project (IWP) Project. This senior soft mini-perm non-recourse project finance loan carried a maturity period of 26 years and six months (26.5 years), a final maturity date of April 7, 2049, and an interest rate based on a floating rate plus a margin of 130 basis points (bps). Financial close was reached on October 28, 2022. Each lender, including BOC and ICBC, contributed $70.22 million USD to the loan syndicate. Record ID#101494 captures BOC's contribution. Record ID#101495 captures ICBC's contribution. In addition to BOC and ICBC, the following lenders contributed to the loan syndicate: Abu Dhabi Islamic Bank PJSC (ADIB), Korea Development Bank (KDB), MUFG Bank, Ltd., Saudi Investment Bank, Saudi National Bank (SNB), Standard Chartered Bank PLC, and Warba Bank. In June 2022, Standard Chartered and MUFG had committed to financing the project, leading to syndication to other lenders. All these lenders were lead arrangers. In addition to the $632 million USD loan, MUFG Bank provides a $14.80 million USD 26.5-year standby facility and Riyad Bank and Saudi Awwal Bank (SAB) each contributed $94.50 million USD to a $189.00 million USD equity bridge loan. The proceeds of this loan were to be used by the borrower for the construction of the Shuaibah 3 IWP Project, the replacement/conversion/restructuring of the existing 900 MW Shuaibah Independent Water and Power Plant (IWPP). The $821 million USD Shuaibah 3 IWP Project sought to construct a combined seawater desalination and power plant facility with a designed capacity of of 600,000 cubic meters of water per day (m3pd) using reverse osmosis (RO) technology and a captive 60 MW solar photovoltaic plant providing 45% of the plant's electricity demands on a plot of land 110 kilometers south of Jeddah along the Red Sea. The plant was expected to produce enough water for approximately two million people daily. The original Shuaibah IWPP project agreement was signed in December 2005. It went through two expansions, the most recent of which began in 2017 and completed in 2019. The Shuaibah IWPP was planned to cease operations in 2025; its replacement, by virtue of removing the 900 MW oil-fired power plant at the Shuaibah IWPP, would save 22 million barrels of light crude oil annually. On June 20, 2022, Shuaibah Three Water Desalination Company signed a new 25-year water purchase agreement for the Shuaibah 3 IWP Project worth SAR 3 billion ($800 million USD) with state-owned Saudi Water Partnership Company (SWPC). On August 3, 2022, ACWA Power awarded the $639 million USD engineering, procurement, and construction (EPC) contract to Doosan Enerbility. In September 2022, a joint venture of Louis Berger Services and KGB Holding won a $44.4 million USD subcontract for the construction of the captive solar photovoltaic plant. Shuaibah 3 IWP Project was expected to achieve its commercial operations date (COD) in the second quarter of 2025. EPC contractor Doosan Enerbility's target completion date was by May 2025.