JEDDAH, 21 December 2006 — The Royal Commission for Jubail and Yanbu announced yesterday that it signed an SR12.6 billion contract with a consortium headed by French-Belgian utility company Suez to establish a giant dual purpose Independent Water and Power Plant (IWPP) in the eastern industrial city of Jubail.
Prince Saud ibn Abdullah ibn Thunayyan, chairman of the Royal Commission and Marafiq Company, said the plant, the largest in the world, would start production in the second half of 2009. It will supply 800,000 cubic meters of water and 2,700 megawatt electricity daily. “This is the largest IWPP project in the world, that will be set up on the basis of build, operate and transfer (BOT) system,” Prince Saud said after signing the agreement at the Royal Commission’s headquarters in Riyadh. The Jubail plant comes under the Power and Water Utilities Company for Jubail and Yanbu (Marafiq).
Prince Saud disclosed that infrastructure for the first phase of Jubail-2 industrial city has been completed. “We have now started the second phase of Jubail-2. The allocations made for industrial cities in Jubail and Yanbu in the 2007 budget reflect the government’s keenness to boost investment and encourage the private sector to invest in the two cities.”
The winning group of companies includes the Gulf Investment Corp. and Arabian Company for Water and Power Projects. Of the cost, 82 percent will be funded by loans and 18 percent through equity. Suez has said the contract would generate a turnover of $8.5 billion over 20 years.
The Jubail plant will be the second largest IWPP in the Kingdom. Last November, the Ministry of Water and Electricity awarded an SR9.1 billion contract to a consortium of Saudi and Malaysian companies to set up Shuaiba-3 desal plant.
Water and Electricity Minister Abdullah Al-Hussayen said the Supreme Economic Council has approved four IWPPs (Shuaiba-3, Shuqaiq-2, Ras Al-Zour, and Jubail-3), adding that they would be carried out by the private sector on build-operate-transfer basis.
The minister estimated the total cost of the four projects at SR30 billion. The private sector will contribute 60 percent of their cost while the state-owned Public Investment Fund (PIF) will have 32-percent stake and Saudi Electricity Company (SEC) 8 percent.
The combined production capacity of the four projects will reach 492 million gallons daily and 4,500MW. “These projects will boost the total desalination capacity of the Kingdom by 80 percent,” Al-Hussayen pointed out.
The IWPPs will meet the increasing demand for water and power in the Kingdom and compensate old desal plants which will be decommissioned in the near future. Water and Electricity Company (WEC) will sell 100 percent water produced by these plants to Saline Water Conversion Corp. (SWCC) and 100 percent of their power supply to Saudi Electricity Company.
Al-Hussayen said the Kingdom would require nearly SR350 billion in investment for water and sewage projects and SR340 billion for electricity projects during the next 20 years. He said the water and electricity sectors in the Kingdom were growing at the rate of seven percent.