AfrElec: Standard Chartered Bank arranges $566.4mn loan for Saudi-Egypt interconnector

The realisation of the Saudi-Egypt electricity interconnection project took one more step forward with Standard Chartered Bank and Japan’s Sumitomo Mitsui Banking Corporation successfully arranging $566.4mn in Murabaha financing to complete one phase of the project. Murabaha, profit-sharing, is a product structured according to Islamic shariah. The 14-year financing extended by the two banks is guaranteed by the Swedish Export Credit Agency and funded by the Swedish Export Credit Corporation.

The electricity interconnection project is the first large-scale, high-voltage direct current interconnection in the Middle East and North Africa to link electricity grids. The project will allow Saudi Arabia and Egypt to exchange up to 3,000 MW of power. The connection is expected to be in place by 2026 and will support the flow of power in multiple directions, from Badr in Egypt, to El-Madinah El-Munawara via Tabuk in Saudi Arabia.

Standard Chartered also participated along with other financial institutions in the provision of a $3bn, five-year syndicated loan to the consortia building the interconnection project.