By: AGBI

A consortium led by Abu Dhabi National Energy Co (Taqa) has secured funding for greenfield power plant projects in Saudi Arabia worth $4 billion.

The Rumah 2 and Nairyah 2 gas-fired power plants are located in the western and central regions and will generate 3.6 gigawatts of power to the national grid.

The group includes Japanese power generation company Jera Co and AlBawani Capital, a subsidiary of Riyadh-based AlBawani Holding.

The consortium has signed two 25-year power purchase agreements with the state-backed Saudi Power Procurement Co.

The projects will be developed on a build, own and operate basis, Taqa said in a statement to the Abu Dhabi stock exchange on Wednesday.

The financing was secured from a consortium of regional and international lenders through senior debt and equity bridge loans. Senior debt leverage exceeds 80 percent. The terms and amount of the loan was not disclosed.

The lenders include Al Rajhi Bank, Riyad Bank, Saudi Awwal Bank, Saudi National Bank, Arab Petroleum Investments Corporation, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Bank of China and First Abu Dhabi Bank.

Construction will be undertaken through special purpose vehicle owned by Taqa (49 percent), Jera (31 percent) and AlBawani Capital (20 percent).

The engineering, procurement, and construction contracts were awarded to two Chinese companies: Harbin Electric International and China Tiesiju Civil Engineering Group, the statement said.

The construction of both plants is well underway with the early works phase concluding recently, said Taqa’s CEO generation business Farid Al Awlaqi.

Taqa’s net profit for the first half of this year fell 20 percent year on year due to the ceasing of production from four UK projects and lower oil prices.

State-run Abu Dhabi Power Corporation owns 90 percent of Taqa.

The company’s share closed 1.2 percent higher at AED3.4 on the Abu Dhabi Securities Exchange on Tuesday. The stock is down 5 percent year to date.