Saudi Arabia-based utility provider, ACWA Power, has signed financing and hedging agreements for the SAR 2.62 billion Rabigh-3 IWP, the energy provider said in a statement on Monday.
The Rabigh-3 project will generate 600,000 cubic meters per day – making it one of the largest seawater reverse osmosis (SWRO) desalination projects in the world to be built in Saudi Arabia.
The water purchase agreement was signed on December 24, 2018 by HE Eng. Abdulrahman bin Abdulmohsen Al-Fadley, Minister of Environment, Water and Agriculture and Chairman of Water & Electricity Company (WEC), as WEC will act as the off taker of the project.
A new company “Rabigh Three Company (RTC)” has been formed with ACWA Power, holding 70 percent and SBCC 30 percent to own 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.
“As this region embarks on an extensive desalination capacity procurement program, with four large projects already in the market and a number of additional projects in the pipeline, we are proud to have closed Rabigh-3 as a demonstrator for how the recent price and technology evolution in reverse-osmosis desalination has made this an affordable and efficient solution for potable water production for countries around the region,” Paddy Padmanathan, president and CEO of ACWA Power, said.
The commercial operation date of the plant is scheduled to be towards the end of 2021.
The water output will cater to the water demand of Makkah al-Mukarramah and Jeddah areas. 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 the Holy Month of 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 content.
The engineering, procurement aind construction (EPC) contract for the project was awarded to a consortium of SEPCOIII (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 Co. Ltd. (NOMAC).
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