RIYADH: Saudi Arabia’s first independent sewage treatment plant (ISTP) has been awarded to the private sector with a tenure of 25 years following the project’s successful financial close.
Financial closure is when a project’s financial documents have been signed and conditions have been fulfilled.
The ISTP aims to serve the western districts of Dammam with up to 350,000 cubic meters of water per day.
The project agreement was signed between the Saudi Water Partnership Company (SWPC) and a consortium led by Metito Group in January 2019.
The ISTP project is worth $245 million and the investment is made up of a combination of equity and debt, a statement provided to Arab News said.
The successful financial close comes amid the COVID-19 pandemic, which has frozen many large-scale projects around the world.
Khaled Al Qureshi, CEO of the SWPC, said: “Despite global volatility and liquidity issues, and ever-changing market conditions, SWPC and the consortium were able to successfully reach financial closing, in close cooperation with the lenders group.”
He added that the closing deal was testament to the SWPC’s commitment to support and encourage private sector engagement in sustainable development by providing lucrative opportunities for local and foreign investors to participate in the implementation of lifeline water projects, provide job opportunities for young people, and support local output and balanced development.
Non-recourse project financing is being provided by a group of local and international banks, including the National Commercial Bank, Sumitomo Mitsui Banking Corporation Europe Limited, and the Arab Petroleum Investment Corporation, worth a total of $160 million.
“Reaching this stage in the project and resuming construction work under these difficult circumstances indicates confidence in the investment environment in Saudi Arabia and its suitability for the private sector,” Al-Qureshi said.
Rami Ghandour, Metito’s managing director, said on behalf of the consortium: “While the world is navigating unprecedented and testing times due to the fast evolving COVID-19 pandemic, we are delighted to share a strategic milestone for the water and wastewater industry in the Middle East region. The financial structure for this project is a testament to its importance, scale and impact, and the confidence of all stakeholders in its sustainable success.”
We are confident that with the continued support from the SWPC the Dammam ISTP will pave the way for similar developments in the future that can contribute to a more efficient water sector in the Kingdom and beyond.”
The ISTP project is in line with the Saudi Vision 2030 reform plan goal for the optimal use of water resources and to encourage private sector participation in economic development initiatives.