Saudi-based Al Rajhi Bank said it will providing a SR258 million ($69 million) Islamic debt facility for the development of an independent sewage treatment plant (ISTP) coming up near Taif city in the kingdom's Makkah province.
Saudi Water Partnerships Company (SWPC) and a consortium of Spanish utility developer Cobra and Tawzea had recently announced the financial closure for the 270,000-cu-m-per-day project, being implemented in a BOOT (build, own, operate and transfer) model.
As per the deal, the consortium will develop and finance the wastewater treatment plant and provide engineering, procurement, construction, implementation, ownership, operation and maintenance services, and then transfer the ownership to the Saudi utility.
To serve the purpose, the Cobra-Tawzea consortium has set up a new Saudi company, Taif Independent Water Plant Company, which will manage and operate the plant for a period of 25 years.
The SR320 million ($85 million) project is the fifth one to be closed within last two years, said the statement from SWPC.
In the first phase, the plant will handle 100,000 cu m per day. The work on the station will be completed as per schedule and operations will begin in the third quarter of 2022.
The second phase of the project will begin when the operational capacity at the plant exceeds the usage rates, as 170,000 cu m will be added to its capacity among its expansion plans.
On the successful closing of the deal, CEO Engineer Khalid Al Quraishi, said: "Despite the fluctuations, liquidity crises and changing global market conditions, we succeeded in completing the financial closure procedures in close cooperation with the group of lenders, which indicates the company’s efforts."
Lauding the deal, Tawzea CEO Mohamed Halawani said: "The Taif wastewater treatment plant is one of the important projects in the kingdom, as it is a long-term project that supports the confidence of all investors, project owners and the banking community in its sustainability and long-term success."
Clifford Chance, a multinational law firm headquartered in London and Saudi-based Abuhimed Alsheikh Alhagbani Law Firm had advised Al Rajhi Bank on the Islamic finance deal.
The Clifford Chance team was led by partner Mohamed Hamra Krouha and comprised team members across the UAE, Madrid (Spain) and Singapore, while the AS&H team was led by partner Yasser Alhussain and included Ali Moiz Ansari (Senior Associate) and Mohammed Ghazzawi (Associate).