Legal deals of the week (Nov 26, 2020)
Clifford Chance and AS&H advise TRSDC on a first-of-a-kind fully integrated multi-utility concession agreement for the provision of utilities on an entirely renewable basis to The Red Sea Project in Saudi Arabia
Clifford Chance in co-operation with Abuhimed Alsheikh Alhagbani Law Firm (AS&H) advised The Red Sea Development Company (TRSDC) on a fully integrated city-wide utility programme comprising more than 20 individual utility plants and associated transmission infrastructure, including the world’s largest energy storage system, solar PV, wind power, biofuel power generation, reverse osmosis desalination, district cooling, wastewater treatment and municipal solid waste management.
The first-of-a kind, fully sustainable, project, with no connection to the wider Saudi utility networks, was procured on a BOT (build, own and transfer) basis under a single multi-utility concession agreement.
TRSDC, a wholly owned subsidiary of Saudi Arabia’s Public Investment Fund, will act as the Offtaker of utilities, and entered into the project agreements with Saudi-based ACWA Power on November 15, 2020.
The utilities project is expected to come on-line during 2022 and will provide the entire utilities required by The Red Sea Project in phase one. Once fully operational, the pioneering luxury tourist destination is slated to attract one million visitors per year, create 70,000 new direct, indirect and induced jobs and increase Saudi Arabia’s GDP by USD5.86 billion annually.
Leading energy and infrastructure partner Richard Parris of Clifford Chance headed the cross-border team advising TRSDC and commented, “We are honoured to have played a role in the development of this incredibly complex and ground-breaking utilities project which will help to set new global standards in sustainable development while also enabling TRSDC to position The Red Sea Project as a luxury tourist destination”.
Additional members of the Clifford Chance team included partners Tariq Imam and Mohamed Hamra-Krouha, Counsel Inaamul Laher, senior associates Christopher Shelton, Richard Cameron and Isabella Van Zyl.
The AS&H team included managing partner Dr. Fahad Abuhimed, partner Yasser Alhussain and associate Abdullah Alsugair.
Legal Advisors Abdulaziz Alajlan & Partners in association with Baker & McKenzie Limited advises the Ministry of Finance of The Kingdom of Saudi Arabia in relation to a SAR167.92 billion Shari’ah-compliant financing to Saudi Electricity Company
Legal Advisors Abdulaziz Alajlan & Partners in association with Baker & McKenzie Limited has acted as legal counsel to the Ministry of Finance of The Kingdom of Saudi Arabia on a landmark agreement signed with Saudi Electricity Company (SEC) in relation to a SAR 167.92 billion (USD44.78 billion) perpetual subordinated instrument.
This transaction, which involves creating a mudaraba based subordinated perpetual financial “equity-like” instrument, is the world’s largest ever Islamic finance transaction.
Commenting on the deal, Ian Siddell, the head of Gulf banking & finance practice of Baker McKenzie said, “We are absolutely privileged to have successfully assisted the Ministry of Finance of The Kingdom of Saudi Arabia in this exceptional transaction which demonstrates our strength in dealing with complex transactions and exemplifies the ongoing confidence clients have in our deep understanding, knowledge and expertise in Islamic finance practice.”
The team at Legal Advisors Abdulaziz Alajlan & Partners in association with Baker & McKenzie Limited was led by Ian Siddell, Nick Church and Delwar Hossain, supported by Robert Eastwood, Mohammed AlAmer and Marwa Abdulmalik.
Pinsent Masons advises on USD85m Taif independent sewage treatment plant in Saudi Arabia
Pinsent Masons has advised the sponsors on the Taif independent wastewater treatment plant project in Saudi Arabia, with assistance from the firm’s associated Saudi Arabia law firm AlSabhan & AlAjaji.
The project, which was funded via Islamic financing facilities, is third wastewater project to be procured under a public private partnership by the Saudi Water Partnerships Company (SWPC) and is part of $2 billion program of water and wastewater projects in Saudi launched in 2018.
The Pinsent Masons team led by partner Gurmeet Kaur advised the client on all aspects of the project documents, all construction documents and Islamic financing documents.
The Taif project involves the design, construction, financing, operation and maintenance of a new wastewater treatment plant with an ultimate treatment capacity of up to 270,000 m3/day.
The ISTP will be located near the city of Taif in the Mecca province of the Kingdom of Saudi Arabia. The project is developed under a long-term build, own, operate and transfer (BOOT) structure which is a key part of the Kingdom’s 2030 vision for increasing public private partnerships in the infrastructure sector. The parties signed the 25 year sewage treatment agreement in November last year and the Project is expected to achieve commercial operations in the third quarter of 2022.
Commenting on the deal, Gurmeet Kaur, partner, Pinsent Masons said, “Reaching financial close on this transaction demonstrates the robustness and resilience of the Public Private Partnerships (PPP) program in Saudi Arabia during the pandemic and showcases SWPC’s commitment to its infrastructure pipeline and its vision for driving PPP’s in the Kingdom, working in partnerships with the private sector, against the background of a global pandemic.”
The Pinsent Masons and AlSabhan & AlAjaji team comprised the Dubai, Singapore and Riyadh offices and core team members are Gurmeet Kaur, David Platt, Ibrahim Alajaji, Abdullah AlGowais, Matthew Dyson, Priya Dalal, Bendicte Tse and Rita Allan.