Saudi Arabia’s Rabigh Electricity Company has signed the riyal-denominated tranche of a murabaha credit facility worth up to $666.8m, reported Reuters.

This tranche has a three year tenor and was signed with two local lenders, National Commercial Bank and Samba Financial Group. A murabaha is a cost-plus-profit arrangement, which complies with the Islamic financing standards.

According to Zawya, the electricity sector in the Gulf is resorting to such financial schemes in the wake of declining oil prices and mounting pressure on state budgets.

Rabigh Electricity is also reported to be holding talks with banks to raise a $2b loan for 20 years to replace the capital used for the construction of the Rabigh 1 power plant.

The Rabigh plant with a capacity of 1,200MW/d was the first in the country awarded in an open tender process, in operation since 2013. It is owned by a consortium of ACWA Power International and Korea Electric Power Company. The state-run Saudi Electricity Co. owns 20%.