Acwa Power, a leading developer, owner and operator of power generation and water desalination plants, said its consortium with Saudi Brothers Commercial Company (SBCC), has signed senior financing and hedging agreements for the SR2.62 billion ($700 million) Rabigh-3 IWP, one of the world’s largest independent water desalination plants.
Once completed, the Saudi plant will generate 600,000 cu m of water per day thus making it one of the largest seawater reverse osmosis (SWRO) desalination projects in the world.
The engineering, procurement and construction (EPC) contract for the project was awarded to a consortium of Sepco III (Power China), Abengoa and Sidem (Veolia).
The operations and maintenance agreement was signed with Rabigh Water Production Services Company, an affiliate of First National Operations & Maintenance Company (Nomac), while Saudi Water & Electricity Company (WEC) will act as the off taker of the project.
The water purchase agreement was signed in December by Engineer Abdulrahman bin Abdulmohsen Al Fadley, Minister of Environment, Water and Agriculture and WEC Chairman.
A new entity, Rabigh Three Company (RTC) has been established with Acwa Power as the 70 per cent stake holder and the rest by SBCC for ownership of the Rabigh 3 IWP Plant.
The transaction is financed through limited recourse ring fenced project financing with Natixis, MUFG, Samba and Riyad Bank being the initial mandated lead arrangers. In addition, Riyad Bank has already provided an equity bridge loan for the transaction earlier this month.
Acwa Power president and CEO Paddy Padmanathan, said: "As this region embarks on an extensive desalination capacity procurement programme, with four large projects already in the market and a number of additional projects in pipeline, we are proud to have closed Rabigh-3 as a demonstrator for how the recent price and technology evolution in reverse-osmosis (RO) desalination has made this an affordable and efficient solution for potable water production for countries around the region."
Rabigh 3 IWP will utilise RO technology to yield a 600,000 cu m capacity that will cater to the water demand of Makkah and Jeddah areas, he noted.
"This will ensure consistent, reliable and steady water supply to the citizens of the two cities and village, especially during demand peak periods such as Ramadan and Hajj seasons. The project will also create new employment opportunities in fields including construction, operations and maintenance as well as enhancing the local capabilities in terms of local contentm, he added.
Chief investment officer Rajit Nanda said: "As owner and operator of the world’s largest desalination capacity and a leading innovator on cost and efficiency, we look forward to continuing to deliver unmatched value for the markets we serve in as water demand and the need for desalination grows rapidly."
The commercial operation date of the plant is scheduled to be towards the end of 2021.