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Saudi electricity provider secures $567M for interconnection project with Egypt

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Saudi Arabia’s electricity provider announced that it obtained a $567.5 million Export Credit Agency (ECA) facility to finance the Saudi–Egyptian electricity interconnection project.

Covering a 14-year tenor, the Saudi Press Agency reported that the agreement was signed with Standard Chartered Bank and Sumitomo Mitsui Banking Corporation, subject to conditions guaranteed by the Swedish Export Credit Agency and funded by the Swedish Export Credit Corporation.

According to the SPA report, the Saudi Electricity Company also announced the signing of an agreement to obtain a USD-denominated $3 billion International Syndicated Facility from 15 regional and international lenders.

This is expected to cover a five-year tenor. The unsecured facility will be used to refinance an existing syndicated facility, initially raised in 2017 and set to mature this month.

“The increased interest from the regional and international banking community is encouraging and speaks to Saudi Arabia’s strong economic fundamentals, especially amid volatile market conditions,” SPA quoted SEC CEO Khaled al-Gnoon as saying.

“We look forward to leveraging the International Syndicated Facility to serve our CAPEX requirements, resulting in long-term growth for the business and our investors,” he added.

The 15-bank syndicate comprises Standard Chartered Bank, HSBC, Intesa Sanpaolo, Mizuho Bank, MUFG Bank, Sumitomo Mitsui Banking Corporation, Industrial and Commercial Bank of China, State Bank of India, Bank of China, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, First Abu Dhabi Bank, National Bank of Kuwait, KfW IPEX-Bank and Societe Generale, according to SPA.

SEC has appointed Mizuho Bank and Abu Dhabi Commercial Bank as agents for this international syndicate facility.

This comes after a unit of Saudi Arabia’s sovereign wealth fund scooped up state-owned stakes in four Egyptian companies for $1.3 billion, making it the latest influx of Gulf cash for the struggling economy.

The Saudi Egyptian Investment Co., a new firm set up by the Public Investment Fund, acquired minority stakes in Abou Kir Fertilizers & Chemical Industries Co., Misr Fertilizer Production Co., Alexandria Container and Cargo Handling Co., and E-Finance, Egypt’s Planning Ministry said in a statement Wednesday.

In June, Saudi ACWA Power invested $1.5 billion in a wind power plant in Egypt.

Other deals involved in developing the multi-purpose terminal at Egypt’s Damietta port include establishing a $150 million “pharmaceutical city” by Egypt’s Pharco Pharmaceuticals in Saudi Arabia, the company’s chairman told Alsharq TV.

In March, Saudi Arabia deposited $5 billion in Egypt’s central bank, and the Egyptian government has said that cooperation with the Saudi sovereign wealth fund will result in $10 billion in investments.

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