A consortium led by GDF Suez SA will build a $2.1 billion gas-fired power plant in Saudi Arabia as part of the French utility's efforts to consolidate its position as leading private power producer in the Gulf region, the company said Tuesday. GDF Suez will have a 20 percent share of the 1,730 megawatt plant, to be built at a site 125 kilometer (78 miles) west of the capital Riyadh by March 2013. Other partners in the project are Saudi holding company Aljomaih Holding Co. and Japan's Sojitz Corp, each with a 15 percent stake, and Saudi Electricity Co., with the remaining 50 percent. GDF Suez currently has 17,000 megawatts of power capacity in operation or under construction in the Gulf, including in Bahrain, Abu Dhabi and Qatar. Foreign and Saudi banks have granted a $1.1 billion loan to a consortium led by state-controlled Saudi which was priced at 250 basis points above LIBOR and SIBOR respectively, a consortium member said. Seven international banks granted the consortium, which will run the Riyadh 11 power plant, a $500 million loan at 250 bps above LIBOR, Karel Breda, a senior executive at GDF Suez, told Reuters. Four Saudi banks raised $600 million for the consortium at 250 bps above the Saudi Interbank Offered Rate (SIBOR), Breda added. Both loans have a 20-year maturity, he added. “These are competitive terms at the time when we sought the loan, around September and October, 2009. If we do it today it (pricing) would be slightly lower,” said Breda who is Middle East and North Africa head of acquisitions, financial advisory and investments at GDF Suez. US Eximbank granted a $400 million loan with a 17-year maturity for the consortium, said Breda on the sidelines of the signing of the partnership agreement for the new power plant. Saudi Electricity has teamed up with GDF Suez, Japan's Sojitz Corp and the local Jomaih Holding Group to operate the Riyadh 11 plant in the power-hungry Saudi Arabia. The seven international banks are Calyon, Standard Chartered, Societe Generale, KFW, Intesa Sanpaolo, Credit Industriel et Commercial and Canada Export Development Bank. The Saudi banks involved in the deal are private Samba Financial Group, Banque Saudi Fransi, Alinma Bank and National Commercial Bank (NCB). The loan represents about 71 percent of the cost required to build the 1,730 megawatts plant. Saudi Electricity - Saudi Arabia's power utility - will hold a 50 percent stake in the Darmaa Power Co joint venture that will operate the plant while the other three partners together hold the remaining half. Saudi Electricity will buy electricity from the consortium over a 20-year period once the plant starts production in May 2012. Power demand in the world's largest oil exporter is rising at an annual 8 percent. Electricity's Chief Executive Ali Saleh Al-Barrak said 30,000 megawatts need to be added by end-2020 to the existing 46,000 megawatts power generation capacity which will cost SR170 billion ($45.3 billion). About a third of the new capacity will come from partnerships with the private sector similar to that forged for the Riyadh 11 plant, Barrak added.
