Bank of China (New York Branch) contributes to a $7.267 billion USD syndicated loan for the Jazan IGCC Complex Acquisition Project

Project narrative

On October 18, 2021, financial close was reached on a deal in which a syndicate of 25 lenders — including the Dubai and New York Branches of the Bank of China (BOC) — entered into a $7.26763 billion USD syndicated limited recourse project finance loan agreement with Jazan Integrated Gasification & Power Company (JIGPC) — a special purpose vehicle and joint venture of American firm Air Products and Chemicals, Inc. (46% ownership stake), Saudi Arabia's ACWA Power (25% ownership stake), Saudi Aramco Power Company (20% ownership stake), and Gas Industry Company (Saudi Arabia's Air Products Qudra) (9% ownership stake) — for the Jazan IGCC Acquisition Project. The debt was divided into six tranches: a 14-year $1.600 billion USD term loan tranche provided by Saudi Industrial Development Fund (SIDF), a fixed rate tranche with a maturity period of 24 years and an interest rate of LIBOR plus 125 basis points that was provided by non-bank financial institutions, a seven-year U.S. dollar denominated tranche, a $2.18 billion USD amortizing tranche with a maturity period of 17 years and an interest rate based on LIBOR plus a margin between 125 and 150 bps, a seven-year Saudi riyal-denominated Istisna-Ijara tranche, and a seven-year Saudi Riyal-denominated Wakala-Ijara tranche. In addition to the Dubai and New York Branches of BOC, the following lenders contributed the syndicated loan: Banque Saudi Fransi (BSF), Riyad Bank, Standard Chartered Bank, First Abu Dhabi Bank (FAB), Saudi Awwal Bank (SAB - Awwal), Abu Dhabi Commercial Bank PJSC (ADCB), HSBC Bank, Natixis, Al Rajhi Bank, Arab Petroleum Investments Corporation (APICORP), Intesa Sanpaolo S.p.A., DZ Bank, JPMorgan Chase, Korea Development Bank (KDB Bank), Mizuho Bank, Sumitomo Mitsui Banking Corporation (SMBC), MUFG Bank, Ltd., Alinma Bank SJSC, Bank Albilad, Bank Aljazira (BAJ), Saudi National Bank, Samsung Life, Samsung Securities, and Saudi Industrial Development Fund (SIDF). BOC, ADCB, BSF, FAB, Natixis, SAB - Awwal, SMBC, and Standard Chartered Bank served as global coordinators and bookrunners. Al Rajhi, Alinma, APICORP, SNB, JPMorgan, and Mizuho served as bookrunners. The Jazan Integrated Gasification Combined Cycle (IGCC) Complex consisted of an integrated Gasification, Combined Cycle Power Plant, an Air Separation Unit (ASU), and associated utilizes located on the eastern cost of the Red Sea, adjacent to the existing Jazan refinery, approximately 80 kilometers to Jazan Economic City in the Jizan Province of Saudi Arabia. The power plant consisted of five combined-cycle units, each equipped with two 5000F heavy-duty gas turbines, two dual pressure afterburner reheated horizontal waste heat boilers, a steam turbine, and three generators with a capacity of 770 MW each for a total capacity of 3,850 MW. The ASU had an estimated daily capacity of 75,000 tons of oxygen and nitrogen. The gasification unit, consisting of 15 oxygen silencers, 15 process steam silencers, 15 start-up steam silencers, and four high-pressure steam silencers, had an hourly capacity of up to 2,110,000 normal cubic meters of syngas. The Jazan refinery would supply vacuum residue feedstock for gasification at the IGCC complex, while the gasification unit would be supplied with oxygen generated by the ASU in order to produce hydrogen and syngas, which would then be used for power generation by the combined-cycle facility. The entire facility would produce 585,000 tons of steam per hour, 184,000 normal cubic meters of hydrogen per, and 3,850 MW. Other infrastructure at the complex included tanks, water treatments, reverse osmosis (RO) units, cooling water systems, common pipe racks, an acid gas removal unit, sulphur recovery units, essential/black start power systems, seawater systems, tank farms, substations, and administration buildings. Construction of the Jazan IGCC was nearly finished at the time of the acquisition; formal completion had been delayed due to the financing gap needed for commercial operations. Under the acquisition, JIGPC would formally commission, own, and operate under an Own-Operate-Transfer (OOT) project delivery model for a 25-year period. Saudi Aramco would supply feedstock produced by the Jazan refinery to the JGCC, would be gasified to produce fuel for the power plant which would supply the Jazan refinery and the Saudi electric grid. Specifically, 300 MW would be used by the refinery, 1,100 MW by JIGPC, and the remaining 2,400 MW to the grid. The Jazan IGCC Complex was the largest gasification facility in the world and an anchor tenet of the Jazan Economic City. The proceeds of this loan were to be used by the borrower to finance its purchase of the Jazan IGCC Complex from Saudi Aramco; it also included the repaying of $1.8 billion USD debt taken out in 2015 by Air Products and ACWA to finance the air separation unit. In addition to the debt, the sponsors provided $4.8 billion USD in equity for the $12.06763 billion acquisition: ACWA Power provided $1.200 billion USD, Air Products provided $2.4288 billion USD, Saudi Aramco Power Company provided $960.00 million USD, and Qudra provided $211.20 million USD. The acquisition was signed on September 27, 2021. The acquisition of the first group of IGCC assets was completed on October 27, 2021.. The acquisition of the second group of IGCC assets was completed on January 20, 2023.