Home Water ACWA Power closes financing for $700m Rabigh-3 IWP desalination project

ACWA Power closes financing for $700m Rabigh-3 IWP desalination project

ACWA Power, a leading developer, owner and operator of power generation and water desalination plants, leading a consortium with Saudi Brothers Commercial Company, published the successful signing of senior financing and hedging contracts for the USD 700 million Rabigh-3 IWP which will produce 600,000 m³/day – making it one of the biggest SWRO desalination projects in the world to be built in the Kingdom of Saudi Arabia.

The water purchase agreement was signed on the 24th of December 2018 by HE Eng. Abdulrahman bin Abdulmohsen Al-Fadley, Minister of Environment, Water and Agriculture, and Chairman of Water & Electricity Company, 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 initially mandated lead arrangers. In addition, Riyad Bank has already provided an equity bridge loan for the transaction previous this month.

Rajit Nanda, Chief Investment Officer of ACWA Power, said: “As owner and operator of the world’s biggest desalination capacity and a leading innovator on cost and efficiency, we look forward to continuing to deliver unmatched value for the markets we serve in as water requirement and the need for desalination grows rapidly”.

The commercial operation date of the plant is scheduled to be towards the end of the calendar year 2021.

Rabigh 3 IWP will utilize reverse osmosis (RO) technology to produce a capacity of 600,000 cubic metres a-day. The water output will serve to the water demand of Makkah al-Mukarramah and Jeddah areas. This will ensure consistent, reliable, and regular water supply to the citizens of the two cities and village, especially during the demand peak time such as the Holy Month of Ramadan and Hajj seasons. The project will also create new employment opportunities in fields comprising construction, operations, and maintenance as well as improve the local capabilities in terms of local content.

The engineering, procurement, and construction (EPC) contract for the project was assigned a consortium of SEPCOIII (Power China), Abengoa, and SIDEM (Veolia). The operations and maintenance contract was signed with Rabigh Water Production Services Company, an affiliate of First National Operations & Maintenance Co. Ltd. (NOMAC).

It may be noted that back in November 2018, WEC awarded the project to ACWA Power Consortium at a then-world record tariff of US Cents 0.53 /m3.

The plant is located in Rabigh, Saudi Arabia.

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