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ACWA Power closes $300m maiden corporate murabaha facility

United Arab Emirates: Sunday, November 13 - 2011 @ 12:28

Commenting on the deal, Ahmet Bekce, Banking Head for the Middle East at Citi, said, “ACWA Power is clearly an upcoming champion in the MENA power and water utility space. We are pleased to be part of its expansion plans, and to support its future progress.”

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.”

Mr Hideaki Kuraishi, General Manager Structured Finance Division Europe, Middle East & Africa Mizuho Corporate Bank, Ltd noted that “Mizuho Corporate Bank Nederland N.V. is very 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 $80m commitment have been accepted under the “Accordion” feature of the Facility that allowed it to be increased to upto $300m by the 31st December 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 $30m 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. Our participation in this facility will further strengthen our 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 $50m 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 realise 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 stated that “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.”

“ACWA Power chose to raise the Facility from International banks mainly to consolidate our core banking relationships outside the Kingdom of Saudi Arabia as well. The fact that we obtained the commitment of six major international banks towards this US 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 Rajit Nanda, Chief Finance Officer of ACWA Power.

The closing of this Facility is achievement of yet another milestone for ACWA Power. 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.

Paddy Padmanathan President & CEO of ACWA Power commented that “The timely closing of the Murabaha facility will fuel our growth plans outside Saudi to help treble our power capacity to 30,000 MW and more than double the water production to 5 million m3 per day in the next four years. 2011 witnessed a quantum leap towards 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.”

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Sunday, November 13- 2011 @ 12:28 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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