ACWA Power has announced the successful signing of senior financing and hedging agreements for the SAR2.625 billion (US$700 million) Rabigh-3 Independent Water Project (IWP).
The project involves the development, financing, procurement, implementation, operation and maintenance of a desalination plant with capacity to treat 600,000 m³/day. Located in Rabigh, on the central-west coast of Saudi Arabia, the plant will utilise reverse osmosis (RO) technology.
ACWA Power will deliver the project in a 70:30 joint venture with Saudi Brothers Commercial Company (SBCC) through the newly-formed Rabigh Three Company (RTC).
The consortium won the tender for the project in November 2018 with a then world record bid to sell the water produced by the plant at US$0.53/m3. The Water and Electricity Company of Saudi Arabia (WEC) will act as the offtaker of the project, having signed a 25-year water purchase agreement with ACWA Power and SBCC in December 2018.
Limited recourse ring-fenced project financing has been arranged by Natixis, MUFG, SAMBA and Riyad Bank as initial mandated lead arrangers. In addition, Riyad Bank provided an equity bridge loan earlier this month.
The plant is expected to commence commercial operations towards the end of 2021.
Its 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 surrounding villages, especially during peak demand periods such as the Holy Month of Ramadan and Hajj seasons.
An engineering, procurement and construction (EPC) contract for the project has been 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).