ACWA Power, a Saudi Arabian developer, investor and operator of power generation and desalinated water plants, has announced the successful signing of senior financing agreements for the $650 million Jubail-3A independent water project (IWP).
The project is the fourth seawater reverse osmosis (SWRO) desalination project to be awarded in Saudi Arabia over the last 3 years, as part of the largest public-private partnership desalinated water procurement program in the world. Jubail-3A IWP will utilize reverse osmosis technology to yield a capacity of 600,000 cubic meters a day.
The utility-scale project had been awarded to the consortium led by ACWA Power, in association with Gulf Investment Corporation (GIC) and Al-Bawani Water and Power Company (AWP), earlier this year at a world-record tariff of 41 cents per m3 for desalinated potable water. The water purchase agreement was signed on May 21 by Saudi Water Partnership Company (SWPC) in its capacity as the off-taker of the project.
The transaction is financed through limited recourse ring-fenced project financing with Al-Rajhi Bank, Abu Dhabi Islamic Bank, Riyad Bank and Mizuho Bank being the initial mandated lead arrangers. In addition, Riyad Bank and Bank AlJazira have already provided equity bridge loans for the transaction earlier this month.
Paddy Padmanathan, president and CEO of ACWA Power, said: “The signing of the financing agreements for the Jubail-3A IWP in less than four months from the date of signing the water purchase agreement, especially in the midst of a pandemic which is causing global disruption, is testament to the financial community’s confidence in ACWA Power’s proven capabilities in delivering large-scale utility plants, and an indication of the unwavering support of our partners, including our lenders, contractors and advisers.”
Rajit Nanda, chief investment officer of ACWA Power, said: “We take this opportunity to thank SWPC and the various authorities within Saudi Arabia whose immense support and cooperation have enabled our swift progress in the project’s development.”
“We take great pride in having broken the record for the lowest tariff for desalinated potable water, thrice in the last 3 years, including for the Jubail-3A IWP.”
The commercial operation of the plant is scheduled to begin toward the end of 2022. The engineering, procurement and construction (EPC) contract for the project was awarded to a consortium of SEPCOIII, Power China and Abengoa. The operations and maintenance agreement was signed with an affiliate of First National Operations and Maintenance Co. Ltd. (NOMAC). The plant is located in Jubail.