Home Water Apicorp provides $40m of financing for Saudi Arabia’s first PPP sewage treatment...

Apicorp provides $40m of financing for Saudi Arabia’s first PPP sewage treatment project

Dammam West independent sewage treatment plant ISTP will be financed through a combination of senior project financing debt and equity from shareholders. The plant will have an initial capacity of 200,000 cubic meters a day which will be able to be expanded to 350,000 cm/d in the future
The Arab Petroleum Investments Corporation Apicorp is providing $40m in financing for Saudi Arabia’s first independent sewage treatment plant ISTP project.
The multilateral development financial institution is supporting the $245m Dammam West ISTP, which will require a total of $160m of project financing.
The rest of the $160m project financing will be provided by National Commercial Bank NCB and Sumitomo Mitsui Banking Corporation SMBC. The financing facility will have a tenor of 27 years.
The Saudi Water Partnership Company SWPC awarded a consortium of Metito Group, Orascom Construction, and the local Mowah the contract to develop the plant in January 2019 after receiving bids from seven groups in July 2018 under a competitive tendering process. The project will be developed under a build-own-operate-transfer BOOT model under a 25-year sewage treatment agreement STA.
The consortium has formed a special-purpose vehicle (SPV) called Dammam West Company for Water to build and operate the plant.
The project will be funded with a combination of senior project finance loans and equity contributions from shareholders. A total of $160m non-recourse financing for the project is being provided by a number of local and international banks including the National Commercial Bank NCB, Sumitomo Mitsui Banking Corporation SMBC, and Arab Petroleum Investment Corporation Apicorp.
The contract to develop the plant in January 2019 after receiving bids from seven groups in July 2018 under a competitive tendering process. The project will be developed under a build-own-operate-transfer (BOOT) model under a 25-year sewage treatment agreement STA.
Covington & Burling were International legal advisers for the project sponsor, with Hatem Abbas Ghazzawi & Company providing local legal services for the sponsor. Synergy Consulting and Willis Towers Watson provided financial advisory and insurance advisory services for the sponsor respectively.
Allen & Over and Baker & Mckenzie Habib al-Mulla provided international and local legal advisory services to the lenders respectively, with INDECs Consulting providing the insurance advisory services for the lenders and ILF providing technical advisory services.
The Dammam West project is one of three ISTP projects which SWPC awarded contracts for in 2019.
In February last year, the client signed contracts with a consortium comprising local firms Power & Water Utility Company for Jubail, Al-Amwal al-Khaleejiah, and France’s Veolia to develop the Jeddah Airport 2 ISTP. The Jeddah Airport 2 plant will have a capacity of 500,000 cubic meters a day.
India/US-based Synergy was the financial adviser to the winning consortium.
In December last year, SWPC awarded a contract to a consortium of Spain’s Cobra Instalaciones y Servicios and local company Tawzea to develop the Taif ISTP.
The winning team had submitted the lowest tariff of $cents2.87 a cubic meter during a competitive bidding process in August. The Taif ISTP will have a treatment capacity of 100,000 cubic meters a day and will be developed operated under a 25-year sewage treatment agreement.

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