A consortium led by ACWA Power (a 100% Saudi Owned company), and includes Samsung C&T and MENA Fund issued on 2 December 2011 Notice To Proceed with the construction of the Largest Independent Power Generation Project in the world, Qurayyah Independent Power Project (IPP). The project, to be developed on a BOO (build, own, operate) basis, will be located at Qurayyah, on the eastern coast of Saudi Arabia adjacent to existing SEC facilities and will substantially increase power supplies to the Saudi power grid. The Project, the third of its type, and the largest, IPP being developed by SEC represents another major development in the Saudi power sector to help meet the rapidly increasing power demand in Saudi Arabia. The project company “Hajr Electricity Production Company (HAJR)” was established with the winning consortium owning 50% and SEC owning the remaining 50%.

Eng. Yousef AlOuhali, The Executive Managing Officer of the HAJR stated, from the company office in AlKhobar, on Thursday: "Qurayyah IPP is a Greenfield Independent Power Project with a net generation capacity of 3927 MW. The design production capacity will make it the largest IPP combine cycle gas-fired power plant in the world once completed".

The project is being funded with USD 730 million of equity capital funded through an equity bridge murabaha facility provided by Arab National Bank, Banque Saudi Fransi, The National Commercial Bank, Samba Capital, Saudi British Bank, and Saudi Hollandi Bank and 2,075 million of debt funded by Arab National Bank, Banque Saudi Fransi, Hong-Kong Shanghai Bank, Korea Export Import Bank, Kreditanstalt Fur Wideraufbau, The National Commercial Bank, Samba Capital, Saudi British Bank, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation and US Export Import Bank.

Qurayyah IPP comprises 6 identical groups of equipment, each delivering net output of 654.5 MW. Each group comprises 2 Gas Turbines (GTS), 2 Heat Recovery Steam Generators (HRSG) and 1 steam turbine. The Qurayyah IPP Plant is designed and will be constructed to comply with all applicable environmental laws, guidelines, regulations and standards as per World Bank, IFC and Saudi Presidency of Meteorology and Environment (PME).

The project will deliver 3927 MW of electricity to SEC under a 20 year Power Purchase Agreement (PPA) commencing on 30 June 2014. Siemens will provide all major equipment and electrical systems and Samsung C&T will Engineer, Procure and Construct the project as the EPC contractor to deliver the project. Once completed, the plant will be operated by The First National Operation & Maintenance Company (NOMAC) a subsidiary of ACWA Power under a long-term Operation & Maintenance contract with Siemens providing parts and services for the gas turbines under a Long-Term Service Agreement (LTSA) with NOMAC.

Mr. Yousef AlOuhali, the EMO of Hajr stated: “ We are proud to be the Project Owner of Qurayyah IPP not  only because it is the world’s largest combined cycle IPP, but most importantly the project will provide major economic advantage for the Kingdom of Saudi Arabia. First: the project was bid with the lowest tariff possible (21% lower than the nearest bidder), thus delivering over SAR 2 Billion of savings over 20 years to the economy of the Kingdom. Second: the project is designed with the highest thermal performance possible, more than 52% efficiency, or 14% more efficient than the traditional steam power plant exist in the Kingdome now which make it the most efficient in Saudi Arabia. This high efficiency will save the Kingdom more than SAR2M/day in fuel cost, using the present world natural gas price. Third: this high efficiency will also save the Kingdom’s natural resources, as the project will save more than 160 million cubic feet of natural gas per day of equivalent MW production". The Qurayyah IPP Plant is designed and will be constructed to comply with all applicable environmental laws, guidelines, regulations and standards as per World Bank, IFC and Saudi Presidency of Meteorology and Environment (PME).

ACWA Power announced the successful closing of its upto US$ 300 million inaugural corporate credit facility structured on Murabaha basis (“Facility”) with the addition of two new participant banks. 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).

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 US$ 80 million commitment have been accepted under the “Accordion” feature of the Facility that allowed it to be increased to upto US$ 300 million by the 31^st 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 US$ 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. 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 US$ 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 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.”

On July 18, 2011, ACWA Power International (“ACWA Power”), the Saudi-based Water desalination and Power Generation Company completed its acquisition of a 65% controlling stake in Enara Energy Investments PSC (“Enara”) that in turn owns 51 percent of Jordan's Central Electricity Generating Co (“CEGCO”), Jordan's largest electricity producer.

In addition to the above, ACWA Power also announced the completion of the sale of a minority stake in Enara to International Finance Corp (“IFC”), a member of the World Bank Group.

Earlier on June 2, 2011, ACWA Power had announced that it had entered into a binding agreement with Jordan Dubai Capital to acquire a controlling stake in Jordan’s Central Electricity Generation Company (CEGCO). Later, in July this year, ACWA Power had also announced the signing of a binding agreement with IFC for selling a minority stake in Enara.  IFC invested circa 10.5 Mn USD for the minority stake in Enara. Both the above transactions value 51% of CEGCO shareholding at USD144 million.

The Central Electricity Generating Company (CEGCO) is the largest power generator in Jordan with seven power generation complexes nationwide, totaling CIRCA 1,550MW of installed power capacity of a mixed portfolio of technology and fuel types that meet around 59% of the country’s current electricity consumption. The acquisition accounts for a culmination of a longstanding endeavor to establish a presence in Jordan and contribute to increasing Jordan’s electricity generation capacity to keep pace with its rapidly growing demand, while being mindful of utilizing the scarce fuel resources in the most efficient manner possible.

In line with this vision, ACWA Power also submitted a bid for the circa 650 MW greenfield power project East of Amman (“IPP3”) and also supported CEGCO (as a majority shareholder) in submitting its bid for a peaking power project of circa 250 MW at one of its existing plant locations. ACWA Power will also be focusing on supporting CEGCO to repower or refurbish its existing power plants which are close to decommissioning and increase the availability and quality of electricity supply in Jordan. All of the above initiatives reaffirm ACWA Power’s support and confidence in the energy sector of Jordan.

ACWA Power currently owns a 65% controlling stake in Enara, while Malakoff, the Malaysian electricity company, and the Athens-based Consolidated Contractors Company, will continue to own respective stakes of 25% and 10% in Enara. CEGCO will continue to be divided in an ownership scheme that sees 40% of the company owned by the Jordanian government. The Social Security Corporation of Jordan owns 9%, while Enara owns the remaining 51%.

Mohammed Abunayyan, chairman of ACWA Power, said in a statement “We believe that Jordan is a stable country politically, economically and socially, and we will work on improving power delivery in the country. ACWA Power has agreed with IFC to implement an environmental and social action plan which will result in improved operational safety and create an environmentally sustainable platform at CEGCO's 7 power plants in the country.”

Francis Gomez, newly appointed head of ACWA Power’s operations in Jordan and the CEO of Enara stated that, “ACWA Power plans to invest significant additional capital to enhance the performance of the power plant complexes; by improving operational efficiency, upgrading capacity, and replacing and renewing plant units as required. These initiatives are expected to increase the amount of energy that CEGCO generates to ensure that it can respond to the increased electricity needs of the country.”

IFC, a member of the World Bank Group, and International Company for Water and Power Projects (ACWA Power), a Saudi power and water desalination firm, are investing in Jordan’s largest electricity producer to improve power delivery in the country and boost investor confidence in Jordan’s energy sector.

IFC is investing about $10.5 million to support ACWA Power’s acquisition of Enara Energy Investments PSC, which in turn owns 51 percent of Jordan’s Central Electricity Generating Company (CEGCO). IFC’s investment will support ACWA Power’s plans to improve the efficiency of CEGCO’s power plants through their repowering, up-rating and rehabilitation and to expand CEGCO’s generating capacity to keep pace with the country’s rapidly growing electricity needs.

This partnership with IFC is yet another key milestone in the history of ACWA Power, as we continue to expand our operations in the GCC region, Jordan, Turkey, Egypt, Morocco and South Africa,” said Paddy Padmanathan, ACWA Power’s President and CEO. “Working together with IFC, our focus will be to deliver power in the most sustainable manner at the lowest possible cost.”

As part of its investment, ACWA Power has agreed with IFC to implement an environmental and social action plan, which will result in improved operational safety and create an environmentally sustainable platform at CEGCO’s seven power plants in the country.

IFC understands that infrastructure in the Middle East and North Africa will require significant investments in the coming years to make possible the kind of economic expansion the region needs for its growing population,” said Gulrez Hoda, IFC Director for Infrastructure and Natural Resources in Europe, Central Asia, Middle East and North Africa. “That’s why supporting regional investors like ACWA Power is a priority for us.”

ACWA Power and IFC will acquire equity shares in Enara, a holding company created by CEGCO's current owner Jordan Dubai Capital,  which bought CEGCO in 2007. CEGCO is the largest power generator in Jordan, with seven power plants nationwide. Together, these facilities have about 1550 megawatts of installed capacity, or about 59 percent of the country’s total.

This partnership marks the beginning of a long-term relationship between IFC and ACWA Power, which are looking to collaborate on power delivery and water desalinization projects.

ACWA Power International (“ACWA Power”), a Saudi firm specialized in developing privately owned and financed power generation and desalinated water production plants, announced today that it has entered into a binding agreement with Jordan Dubai Capital (JDC) to acquire a controlling stake in Jordan’s Central Electricity Generation Company (“CEGCO”). JDC owns a 65% stake in Enara Energy Investments PSC (“Enara”), which in turn holds 51% ownership of CEGCO. ACWA Power will acquire 65% of Enara from JDC. The transaction values 51% of CEGCO at USD144 million.

CEGCO is the largest power generator in Jordan, with seven power generation complexes nationwide totaling circa 1700 MW of installed power capacity from a mixed portfolio of technology and fuel types meeting around 59% of the country’s current electricity consumption.

“We are excited about this acquisition, after establishing in KSA a strong asset base with a contracted production capacity of about  6,485 MW,” said Mr. Mohammad Abunayyan, Chairman of ACWA Power. “This acquisition marks our entry into the second market in line with our regional expansion plan, following last year’s successful acquisition of Barka I IWPP in the Sultanate of Oman. The stable investment climate of the Hashemite Kingdom of Jordan and the socio economic growth potentials give us a perfect platform to build our regional growth ambitions.”

“This acquisition is another key milestone in our company’s history and is a culmination of a longstanding endeavor to establish a presence in Jordan and contribute to increasing Jordan’s electricity generation capacity to keep pace with its rapidly growing demand, all the while also being mindful of utilizing the scarce fuel resources in the most efficient manner possible,” added Mr. Abunayyan.

“At this juncture, I would like to thank His Majesty King Abdullah II for the encouragement he has expressed and for his Majesty’s blessing. I would also like to thank the Jordanian Government, the Jordanian Electricity Regulation Commission, the National Electric Power Company, and our new partners for the guidance, encouragement, and trust they have shown during the negotiation, and the support they have promised to tender to the future plans of ACWA Power in Jordan” Abunayyan added.

Upon completion of this acquisition, ACWA Power will own a 65% controlling stake in Enara, while Malakoff, the Malaysian electricity company, and the Athens-based Consolidated Contractors Company, each will continue to own consecutively 25% and 10% stake in Enara respectively. CEGCO itself will continue to be owned 40% by the Government of the Hashemite Kingdom of Jordan; 9% by the Social Security Corporation of Jordan and 51% by Enara.

Paddy Padmanathan, President and CEO of ACWA Power, explained that in order to sustain the rapid pace of socio economic development of Jordan, power generation capacity needs to double, adding that ACWA Power is currently prequalified a Greenfield projects in Jordan; the IPP3. The company's prime objective is to remain focused on reducing the cost of producing power and desalinated water and as such in Jordan the company will support the government’s initiatives to improve efficiency, diversify fuel sources to include renewable energy and expand capacity.

 “ACWA Power will leverage on its own capability, capacity and credibility to help the Jordanian government in spurring and sustaining the development of the Kingdom as envisaged in their 2020 energy strategy,” commented Padmanathan. “We also have an unwavering commitment to leverage the human resource capacity at CEGCO by investing in improving the efficiency of the existing physical assets and by expanding generation capacity. This would, in our opinion, create new and challenging work opportunities at CEGCO.”