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King & Spalding takes key role on $12bn Saudi public-private partnership

King & Spalding (K&S) has won a lead role on a $12bn public-private partnership as Saudi Arabia moves to privatise the construction and management of school buildings.

The deal will see HSBC act as financial adviser for the state-owned firm Tatweer Building Co, which is associated with the Saudi Ministry of Education, in its efforts to privatise the management and construction of school buildings.

K&S is providing legal advice to Tatweer with a team led by partner Leroy Levy. The firm had previously advised the national shipping company of Saudi Arabia, Bahri, on its framework agreement with the Arab Petroleum Investments Corporation to establish an investment fund to acquire large crude carriers.

Other projects the firm has contributed to in the Middle East include advising Arabian Company for Water and Power Development on the Islamic financing for a new $2bn industrial gases project in Saudi Arabia.

K&S has a significant background in large-scale social infrastructure projects in Saudi Arabia, but the deal will mark the first of its kind for the Arabic state.

Levy (pictured) said: ‘The education programme is one of many key infrastructure schemes that form part of Vision 2030 as Saudi Arabia looks to diversify its economy beyond oil.

He added: ‘The next plan is a US$50 billion-plus water privatisation programme, with others in the pipeline. Law firms are anticipating that Vision 2030 will have huge legal input, covering everything from construction to project finance to PPP agreements.’

Fahad al-Hammad, the chief executive of Tatweer Building Co said: ‘We aim to boost private sector participation in providing educational buildings, which is a model implemented worldwide.

‘This will minimise government burdens, as the private sector will take over building, maintenance and operation.’

Read more in: ‘Price of debt – austerity and the plight of a project finance partner’