Standard Chartered Bank with Japan’s Sumitomo Mitsui Banking Corporation has approved the provision of a $566.4 million Export Credit Agency-supported Islamic financing facility for Saudi Electricity Company (SEC) to facilitate a Saudi-Egypt electricity interconnection project.

The 14-year financing will be guaranteed by the Swedish Export Credit Agency (EKN) and funded by the Swedish Export Credit Corporation (SEK). The landmark facility is structured on the Islamic concept of Commodity Murabaha.

The electricity interconnection project is the first large-scale, high-voltage direct current (HVDC) interconnection in the Middle East and North Africa (MENA) 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, between Badr in Egypt, to El-Madinah El-Munawara via Tabuk in Saudi Arabia.

“We are driven to play a vital role in the development of key economies across AME, with both Saudi Arabia and Egypt being dynamic and pivotal markets for us. This facility represents our strategy in action as we work with businesses and our partners in facilitating capital for greater integration to deliver impact to communities, helping support the growth of electricity connectivity in the Arabian Gulf and North Africa. Cross-border electricity trade is rapidly growing in importance, and takes advantage of economies of scale, giving countries efficient, flexible, secure and decarbonized access to power. Given the strength of our global network, the Bank is uniquely positioned to act as a bridge to facilitating inward and outward investments from Saudi into overseas markets and vice versa.”

The Bank was also among other financial institutions to provide $3 billion as part of the five-year syndicated loan, demonstrating Standard Chartered’s commitment to Saudi Arabia and Egypt and playing a key role in their economic development.