Apicorp Provides $40mn of Financing for Dammam ISTP

The Arab Petroleum Investments Corporation (Apicorp) is providing $40m in financing for Saudi Arabia’s first independent sewage treatment plant (ISTP) project.

 

The multilateral development financial institution is supporting the $245m Dammam West ISTP, which will require a total of $160m of project financing.

 

Dammam West ISTP had reached financial close. The ISTP will have an initial capacity of 200,000 cm/d with a design that will allow expansion up to 350,000 cm/d in the future.

 

The rest of the $160m project financing will be provided by National Commercial Bank (NCB) and Sumitomo Mitsui Banking Corporation (SMBC). The financing facility will have a tenor of 27 years.

 

The Saudi Water Partnership Company (SWPC) awarded a consortium of Metito Group, Orascom Construction and the local Mowah the contract to develop the plant in January 2019 after receiving bids from seven groups in July 2018 under a competitive tendering process. The project will be developed under a build-own-operate-transfer (BOOT) model under a 25-year sewage treatment agreement (STA).

 

The consortium has formed a special-purpose vehicle (SPV) called Dammam West Company for Water to build and operate the plant.

 

The project will be funded a combination of senior project finance loans and equity contributions from shareholders. A total of $160m non-recourse financing for the project is being provided by a number of local and international banks including: National Commercial Bank (NCB), Sumitomo Mitsui Banking Corporation (SMBC) and Arab Petroleum Investment Corporation (Apicorp).

 

The project will be developed under a build-own-operate-transfer (BOOT) model under a 25-year sewage treatment agreement (STA).

 

SWPC’s obligations under the STA will be guaranteed by a credit support agreement from the Saudi government.

 

Covington & Burling were International legal advisers for the project sponsor, with Hatem Abbas Ghazzawi & Company providing local legal services for the sponsor. Synergy Consulting and Willis Towers Watson provided financial advisory and insurance advisory services for the sponsor respectively.

 

Allen & Over and Baker & Mckenzie Habib al-Mulla provided internationl and local legal advisory services to the lenders respectively, with INDECs Consulting providing the insurance advisory services for the lenders and ILF providing technical advisory services.

 

The Dammam West project is one of three ISTP projects which SWPC awarded contracts for in 2019.

 

In February last year, the client signed contracts with a consortium comprising local firms Power & Water Utility Company for Jubail, Al-Amwal al-Khaleejiah and France’s Veolia to develop the Jeddah Airport 2 ISTP. The Jeddah Airport 2 plant will have a capacity of 500,000 cubic metres a day (cm/d).

 

India/US-based Synergy was the financial adviser to the winning consortium.

 

In December last year, SWPC awarded a contract to a consortium of Spain’s Cobra Instalaciones y Servicios and local company Tawzea to develop the Taif ISTP.

 

The winning team had submitted the lowest tariff of SRhalala 107.9 ($cents2.87) a cubic metre during a competitive bidding process in August. The Taif ISTP will have a treatment capacity of 100,000 cubic metres a day (cm/d), and will be developed operated under a 25-year sewage treatment agreement.