LAST SEPTEMBER, a project to build the Rabigh power plant in Saudi Arabia was struggling. Some $3 billion had been arranged to finance the project but the consortium of funders was receiving instructions from home that they could not proceed as conditions in the credit markets were too uncertain. A number of the international players in the project invoked their material adverse conditions clauses and quit.
Enter the latest Saudi Arabian bank to participate in project finance. Alinma Bank had only just got its licence from the local regulators when it was required to stump up $500 million to save Rabigh. Local and international banks observed that a new source of capital had arrived in Saudi Arabia. David Smith, Alinma’s head of project finance, syndication and real estate, says: "It was fortuitous. At the end of 2008, a lot of projects that had been secured by international banks were in...
