ACWA Power Barka has successfully refinanced its existing debt of $190.39 million (RO73.32 million) using the proceeds of new non-recourse debt facilities arranged by Bank Muscat, National Bank of Oman and Arab Banking Corporation. In addition to the foregoing, ACWA Power Barka also raised new non-recourse rial denominated debt of $43.1 million for funding its expansion project comprising the 10 MIGD reverse osmosis based water desalination facility.
ACWA Power International, the major shareholder of ACWA Power, played a key role as developer, investor and operator in nurturing the transaction, said a press release. The refinancing involved taking over the loans from the existing lenders, which included a host of international and regional banks. Bank Muscat was the mandated lead arranger for the refinancing while National Bank of Oman and Arab Banking Corporation participated as lead arrangers. The new debt facilities under the refinancing arranged by the three banks comprised a rial denominated loan facility of $162.39 million and a dollar denominated loan facility of $28 million.
Through this transaction, ACWA Power Barka has become the first IWPP in the Mena market to establish a non-recourse financing having its tenor extending beyond the term of its Power and Water Purchase Agreement. The rial denominated refinancing facility is structured so that its tenor could extend upto a maximum of six years and the expansion facility upto 6.5 years after the end of the current PWPA.
This unique, trendsetting deal is an endorsement by the lending markets of the Omani regulatory environment and also gives evidence of the confidence the banks have in the Omani power and water sector. Furthermore, this is also the first refinancing transaction where the replacement debt facilities comprised substantially of a local currency denominated tranche. Other salient features of the refinancing and expansion facilities include the removal of a cash sweep covenant in the existing debt facility and inclusion of additional competitive terms which will generate value for the shareholders by continued dividend distributions.
Rajit Nanda, Board member of ACWA Power Barka and CFO of ACWA Power stated; "ACWA Power has demonstrated its responsiveness to the needs of local and regional investors by conceptualising and realising the refinancing transaction. This unprecedented transaction provides a new unconventional project financing template for the regional IWPP landscape which should bolster investor confidence.-
Nadeem Rizvi, CEO of ACWA Power Barka, expressed his gratitude to the exiting lenders for their support in the success of the company and welcomed the confidence displayed by the new lenders.
ACWA Power is a 456MW gross power generating and 20 MIGD seawater desalination plant located in Barka. It has also recently signed an agreement with the Oman Power and Water Procurement Company to expand its water capacity by 10 MIGD utilising reverse osmosis technology.
Times Of Oman