A consortium led by local developer Acwa Power has reached financial close for the $1.33bn Red Sea Utilities project, which will be 100 per cent powered by renewable energy and the largest battery energy storage system in the world.
The financial close was arranged as anon-recourse project finance, with financing secured from Al-Rahji Banking and Investment Corporation, Banque Saudi Fransi, Saudi British Bank, Arab Petroleum Investment Corporation (Apicorp), Standard Chartered Bank and Riyad Bank.
"In addition, the JV has secured Equity Bridge Loan facilities from Bank AlBilad, Bank Al-Jazira and Arab National Bank and a Working Capital and VAT Facility for $93.4 million from Al Rajhi Banking and Investment Corporation," Acwa Power revealed in a stock exchange filing.
In November 2020, the Acwa Power consortium was awarded the public-private partnership (PPP) contract by the Red Sea Tourism Development Company (TRSDC) to develop the utilities and related infrastructure for the Red Sea Tourism project in the Saudi Arabia. The Acwa Power consortium includes SPIC Huanghe Hydropower Development Company and Saudi Tabreed District Cooling Company.
The PPP contract will include the provision of power and water production, sewage treatment and solid waste treatment. The Red Sea Development Company is owned by sovereign wealth vehicle Public Investment Fund (PIF), and the PIF will provide the guarantee for the 25-year offtake agreement.
Power is planned to be generated for the Red Sea Utilities project from 400 MW photovoltaic (PV) solar and wind energy, with 1.3 GWh of battery storage included.
The 1.3 GWh is expected to allow the resort to remain completely off-grid and powered by renewables day and night.
Huawei Digital Power signed the contract with China’s Sepco 3, which is the EPC contractor, for the 400 MW of photovoltaic (PV) solar and 1,300MWh BESS, which will be the largest BESS in the world.
For water production, two seawater reverse osmosis (SWRO) plants will be developed with a capacity of 30,000 cubic metres a day (cm/d) under the first phase. The demand will be split between potable water, 21,000 cm/d, and irrigation top-up, 9,000 cm/d.
Under the second phase, an additional SWRO plant will be developed in addition to brine squeezer and chlor-alkali technologies to meet expected demand of up to 50,000 cm/d, split 39,000 cm/d and 11,000 cm/d between potable water and irrigation top-up respectively.
The selected developer will also be required to provide a sewage treatment plant (STP) with a capacity to treat up to 18,000 cm/d of sewage under the first phase of the project through a constructed wetlands scheme. The peak sewage flow of the development is expected to reach 34,000 cm/d by 2030.
For the waste treatment development, the PPP contract will cover collection, automatic recovery and waste-to-energy production for up to 30 tonnes per day (t/d) under the first day. This will rise to 55 t/d by 2030.
TRSDC was established in line with the kingdom’s Vision 2030 economic reform plan to diversify the country’s economy and increase the kingdom’s tourism sector.
Under the first phase development, TRSDC is planning to develop five islands, two inland sites and deliver 3,000 hotel keys to accommodate 300,000 visitors a year by 2022. By 2030, the client hopes to have developed 22 islands, six inland sites and have delivered 8,000 hotel rooms to service up to 1 million visitors a year.