ACWA Power inks $650m financing deal for Saudi's Jubail-3A IWP

Al Rajhi Bank, Abu Dhabi Islamic Bank, Riyad Bank, & Mizuho Bank are the initial mandated lead arrangers of the transaction

The plant will be commercially operational in the end of 2022 [representational image].
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The plant will be commercially operational in the end of 2022 [representational image].

Saudi Arabia-based developer, investor, and operator of power generation and desalinated water plants ACWA Power has signed a senior financing agreement worth $650m (SAR2.4bn) for Jubail-3A independent water project (IWP).

The transaction is financed through limited recourse ring-fenced project financing with Al Rajhi Bank, Abu Dhabi Islamic Bank (ADIB), Riyad Bank, and Mizuho Bank being the initial mandated lead arrangers.

Additionally, Riyad Bank and Bank AlJazira, earlier this month, provided equity bridge loans for the transaction.

Earlier this year a consortium led by ACWA Power alongwith Gulf Investment Corporation, and Al Bawani Water and Power Company was picked by Saudi Water Partnership Company (SWPC) — the off taker of the project — to develop, design, finance, construct, commission as well as operate & maintain (O&M) the plant.

The project was awarded in April 2020 at a world-record tariff of c.41 US Cents per m3 for desalinated potable water.

Jubail-3A IWP is the fourth seawater reverse osmosis (SWRO) desalination project to be awarded in Saudi Arabia over the last three years, as part of the largest public-private partnership (PPP) desalinated water procurement programme in the world.

Speaking on the financing agreement, president and CEO of ACWA Power, Paddy Padmanathan, said: “Signing of the financing agreements for the Jubail-3A IWP project 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.”

The plant will be commercially operational in the end of 2022.

In April, the engineering, procurement, and construction (EPC) contract for the project was awarded to a consortium of Sepco3, Power China, and Abengoa.

Meanwhile, the O&M agreement was inked with an affiliate of First National Operations & Maintenance Co. Ltd. (NOMAC).

With a capacity of 600,000m3 per day, the Jubail 3A desalination plant will be the second largest plant that uses RO technology in the country.

Upon completion the plant will supply drinking water to Riyadh, Qassim, and Eastern provinces in the kingdom throughout the year.

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