Shearman & Sterling, Milbank Tweed Hadley & McCloy and Berwin Leighton Paisner (BLP) have signed a $2.8bn (£1.42bn) financing agreement for the world's largest independent water and power plant (IWPP) – the $3.5bn (1.77bn) Marafiq project in Saudi Arabia.

The financing, which was signed last week and is expected to complete at the end of the month, means construction on the plant in Jubail Industrial City will now go ahead through developers Suez Energy, ACWA and Gulf Investment Corporation.

BLP advised the developers with finance partner Agnieszka Klich leading. Shearman advised Marafiq – the utility company for the Jubail and Yanbu regions of Saudi Arabia and ultimate purchasers of the power.

London-based head of projects Nicholas Buckworth led the team for Shearman alongside associate Daniel McGrath. Projects partner Nigel Thompson was also involved in the project until his departure to Baker Botts last month.

Milbank's London office acted for the lenders with project finance partner John Dewar advising mandated lead arrangers BNP Paribas, Gulf International Bank and Samba as well as the Korean Export Insurance Corporation, which guaranteed a $645m (£327m) covered loan against political and commercial risk. The $2.13bn (£1.08bn) loan, which included $600m (£304m) of Islamic financing, was syndicated to a total of 32 banks, including Bank of Tokyo Mitsubishi, ING and National Commercial Bank of Saudi Arabia.

Buckworth told Legal Week: "The financing was the last piece of the puzzle and effectively closes the deal. Development will now start formally and it should be finished within three years.

"For us it was particularly interesting as we normally tend to act for the developer or the banks rather than the procurer, so we have enjoyed this. It has given us a good insight into what they need."

Marafiq replaces the $2.5bn (£1.27bn) Shauibah project, which Milbank also advised on, as the world's biggest independent water power plant to date.