ACWA Power expands flagship Revolver facility by SAR 1,109 million

ACWA Power has increased its maiden revolver facility, structured on a fully sharia compliant commodity murabaha basis, by SAR 1,109 million whilst effectively extending the final maturity date by an additional year. This has been achieved through the following separate facilities (the “Facilities”).

The 2013 revolver facility stands and is increased by SAR 400 million to SAR 2,175 million (US$ 580 million) with an additional SAR 200 million each from the participation of the National Commercial Bank and Samba Financial Group. The other two participants in the facility are Banque Saudi Fransi (Investment Agent) and the Saudi British Bank. The facility’s availability period has been extended by one year to 2019 end.

A new five  year revolving corporate facility for SAR 709 million (US$ 189 million) has been entered into with a club of banks comprising of the Arab National Bank (as Mandated Lead Arranger (“MLA”), Bank Al Bilad (MLA) and the Saudi Hollandi Bank (MLA and Investment Agent). 

With its availability period matching the facility’s five year tenor, the Facilities further accentuates ACWA Power’s financial flexibility and the ensuing competitive edge vis-à-vis our peers to swiftly respond to investment and acquisition opportunities.  The facility’s five year tenor also dovetails with ACWA Power’s developer-owner-operator business model by serving as the primary stand-by funding. This is an improvement versus the typical one year tenor with an annual renewal feature of most corporate facilities which has been secured without incremental cost to the borrower. 

ACWA Power welcomes the inclusion of the three banks to our core banking group of Revolver facility participants. As a natural progression, ACWA Power is keen to expand the relationship bank base to help fuel its growth strategy as we expand our footprint further into MENA, Southern Africa and South East Asia besides consolidating our position in the core Saudi Arabia and the GCC markets.

The Revolver also establishes a precedent in terms of pricing, structure and documentation for ACWA Power’s future transactions especially as we continue to expand the universe of relationship banks in our ex-GCC target markets such as Morocco, South Africa and Turkey. The Facility’s pricing and other terms compare favourably with our local and regional peers. ACWA Power was advised by Clifford Chance, Riyadh Office while the Participant banks were supported by Zeyad S. Khoshaim Law Firm in association with Allen & Overy LLP.

Thamer Al Sharhan, Managing Director of ACWA Power, commented that “ACWA Power is proud of its Saudi Arabian roots and the successful enhancement of the Revolver facility with a wider group of Saudi banks is testament of their confidence in ACWA Power’s strong fundamentals and growth strategy”.  

“We are grateful to the house banks for expanding our war chest by an excess of a billion SARs at competitive pricing while setting a benchmark in terms of documentation and shariah compliant structuring. ACWA Power sought to close this facility in a relatively short time frame to stay ahead of the curve in the wake of the anticipated bottoming out of interest rates and ensuing liquidity and crowding out pressures. Our Facility participant banks responded positively to the challenge and have ensured a timely closing”, acknowledged Rajit Nanda, Chief Investment Officer of ACWA Power. 

Kashif Rana, Chief Financial Officer at ACWA Power, added that “the unprecedented financial flexibility offered by almost SAR 3 billion of revolving facilities would help ACWA Power leverage its strong operating cash flows base to bridge its investment and acquisition funding needs in anticipation of their subsequent take out whilst keeping the overall cost of capital in check”.