The closing of the facility is achievement of yet another milestone for ACWA Power, the company announced.
In addition to being the maiden medium-term Murabaha facility at the corporate level, the fact that it was secured by its own balance sheet without any shareholder credit support is a testament to the confidence in ACWA Power’s capability, capacity and credit standing, the company said in a press release received here on Sunday.
ACWA Power chose to raise the facility from international banks mainly to consolidate its core banking relationships outside Saudi Arabia as well, said its Chief Finance Officer Rajit Nanda.
“The fact that we obtained the commitment of six major international banks toward this dollar-denominated facility at the height of the European sovereign debt crisis and the ensuing adverse impact on market liquidity and risk premiums, is sure evidence of ACWA Power’s financial adequacy, credit standing and sound management,” said Nanda.
Paddy Padmanathan, president and CEO of ACWA Power, said: “The timely closing of the Murabaha facility will fuel our growth plans outside Saudi Arabia to help treble our power capacity to 30,000 MW and more than double water production in the next four years. This year witnessed a quantum leap toward this target with the signing of the power purchase agreement in September for the largest gas-fired power plant in the world, the 3,927 MW Qurayyah IPP.”
J. P. Morgan Limited (MLA) and MayBank Berhad (MLA) have joined Standard Chartered Bank (Bookrunner & MLA), Citi (Bookrunner & MLA), Bank of America Merrill Lynch (MLA), and Mizuho Corporate Bank Nederland N.V. (MLA).
“We are pleased to be part of ACWA Power’s expansion plans, and to support its future progress,” Ahmet Bekce, banking head for the Middle East at Citi.
Bekce said ACWA Power is clearly an upcoming champion in the MENA power and water utility space.
Philip Southwell, president of the Middle East and North Africa at Bank of America Merrill Lynch, said “Bank of America Merrill Lynch was very pleased to support ACWA Power in this maiden corporate facility transaction. We see strong fundamentals for the power and water markets in our region and expect ACWA Power to continue playing a key role in their growth.”
Hideaki Kuraishi, general manager Structured Finance Division Europe, Middle East & Africa Mizuho Corporate Bank, said: “Mizuho Corporate Bank Nederland N.V. is pleased to be a MLA in ACWA Power’s debut Murabaha facility. The Mizuho Financial Group has a strong relationship with ACWA Power and look forward to being a key partner in ACWA Power’s continuing growth, as they build on the considerable success over the past several years.”
The additional $80 million commitment have been accepted under the “accordion” feature of the facility that allowed it to be increased to up to $300 million by Dec. 31, 2011 deadline.
The bank market responded favorably to the initial closing of the facility in June with several banks approaching ACWA Power with the expression of interest to participate in this watershed transaction. ACWA Power accepted a $30 million commitment from MayBank Berhad in September 2011 also in recognition of Malaysia’s lead role in Islamic banking and capital markets.
Hamzah Bachee, head Corporate Banking Global Wholesale Banking at Maybank, said: “We are honored to be associated with ACWA Power and are confident that this facility will enhance its capabilities as it seeks to expand its operations in the region.”
Bachee said Maybank’s participation in this facility will further strengthen its Islamic banking portfolio and the contribution to Islamic banking requirements globally.
This has been followed by debt capital market powerhouse J. P. Morgan Limited committing $50 million to close the Facility “J. P. Morgan is delighted to be working with ACWA Power on this landmark transaction,” said Abdulaziz Al Helaissi, Senior Country Officer of J.P. Morgan in Saudi Arabia.
“The Murabaha facility will put the company in a prime position to realize its growth plans both within Saudi Arabia and beyond.”
Standard Chartered Bank acted as joint bookrunner and coordinator for the Commodity Murabaha.
Commenting on the transaction David Law, regional head of wholesale banking MENA Standard Chartered Bank said: “SCB has been supporting ACWA power from its beginnings and our leadership role in the Commodity Murabaha is another pillar of a long standing relationship with ACWA Power and its primary shareholders. We have been privileged to assist in the development of a regional champion.”
