KfW IPEX-Bank finances combined cycle gas-fired IPP at Qurayyah, Saudi Arabia

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The FINANCIAL — KfW IPEX-Bank is participating in the financing of the construction of the new Qurayyah IPP in the Kingdom of Saudi Arabia. With an installed capacity of approximately four gigawatts, the project on the Arabian Gulf will be one of the world's largest and most advanced combined cycle power plants, according to KfW.

 

At the heart of the plant will be high-efficiency Siemens gas turbines which achieve reduced carbon emissions through highest conversion rates. The project’s owners plan to bring the new power plant online in 2014.

A total of USD 2.8 billion will be invested in the new plant. As a member of a banking consortium with Saudi Arabian and international banks supported by further Export Credit Agencies, KfW IPEX-Bank will be contributing a Euler Hermes covered tranche equivalent to nearly EUR 100 million to the overall project financing.

 

The tranche benefits from the officially supported ERP Export Financing Programme and provides attractive 17 year fixed interest rate loans on a CIRR basis to support the financing of the German exports from Siemens AG.

 

These exports include part of the gas and steam turbines as well as various auxiliary equipment. Further gas turbines and the generators will be sourced from one of Siemens’s US production facilities. Siemens will also provide many years of servicing and maintenance for the supplied equipment in order to ensure that the power plant maintains its high efficiency over the long term.

 

The signing of the Qurayyah financing comes only a few weeks after the closing of another major power sector project financing in the Middle East, the two-gigawatt CCPP "IPP Sur" in Oman. As part of a consortium of banks, KfW IPEX-Bank provided a total of USD 120 million towards the financing of the project. A significant portion of this amount was provided with cover from the Japanese Export Credit Agency Nippon Export and Investment Insurance .

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This marked the first time that KFW IPEX-Bank has provided financing under NEXI cover and comes as a direct result of the cooperation agreement on joint export financing signed between NEXI and KfW IPEX-Bank in early November 2011. As in the case of Qurayyah, the equipment sourcing for the Sur power plant includes substantial deliveries from Siemens in Germany.

 

 

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