Saudi Arabian energy developer Acwa Power signed a $125 million five-year Sharia-compliant corporate facility with multilateral lender Apicorp to support its growth plans.
The five-year facility will help Acwa Power to fund renewable energy projects. The term is suited to finance initial commitments for long-term projects. It can be used as a revolving loan during the first three years of a given project, then settled and redrawn as schemes are completed and refinanced. This allows Acwa to "recycle capital and increase financial capacity for further portfolio development and growth", Apicorp said in a statement.
The $125m commitment from Apicorp "will serve as an important funding source" to support the expansion of its green portfolio across markets, Kashif Rana, Acwa Power's chief financial officer, said.
"The revolving feature of this facility offers Acwa Power the flexibility to reallocate and thus optimise its utilisation," he added.
Apicorp is a multilateral lender set up by the 10 oil exporting nations in the Arab World. About 15 per cent of the Dammam-based institution's outstanding financing is being used to fund renewables projects, it said.
In October, Apicorp provided a $70.5m facility to help Acwa Power and its partners build the fifth phase of the Mohammed bin Rashid Al Maktoum Solar Park in the Dubai.
Acwa Power, which has $59.9 billion of assets producing 47.7 gigawatts of power, is playing a key role in Saudi Arabia's energy transition. The company is developing the kingdom's first-photovoltaic power project in the northern Al Jouf region.
The Sakaka plant, built at a cost of 1.2bn Saudi riyals ($320m), is part of the kingdom's plan to add 27.3GW of clean energy to its grid by 2024. Saudi Arabia is also set to become the Middle East's biggest wind power market in the next decade.Development has started on the 400MW Dumat Al Jandal wind farm, the kingdom's first utility-scale wind project, which was awarded to a consortium led by France’s EDF and Abu Dhabi’s Masdar in January 2019.
In November, Saudi Arabia's sovereign Public Investment Fund increased its stake in Acwa Power to 50 per cent.
The Bahrain branch of Baker & McKenzie acted as legal advisors for Apicorp, while the Riyadh office of Ashurst advised Acwa Power.