KSA's SWPC, Metito-led consortium reach financial close for ISTP plant
The Dammam ISTP has a designed capacity of 350,000m3 per day and an initial capacity of 200,000m3 per day
The Saudi Water Partnership Company (SWPC) and a Metito Group-led consortium – comprising Metito, Mowah, and Orascom Construction – have confirmed the successful financial closing of the Kingdom’s first independent sewage treatment plant (ISTP) to be awarded to the private sector under the Build Own Operate Transfer (BOOT) concession model with a tenor of 25 years.
The ‘first-of-its-kind’ project in Dammam West is worth $245m (SAR920m), with the investment made up of a combination of equity and debt.
The funding is sourced from a combination of senior project finance loans in addition to equity contributions from shareholders.
Non-recourse project financing is provided by a group of local and international banks, including The National Commercial Bank (NCB), Sumitomo Mitsui Banking Corporation Europe Limited (SMBC), and Arab Petroleum Investment Corporation (APICORP), worth a total of $160m (SAR601m).
The financial close of the project comes despite the global COVID-19 pandemic, which has frozen many large-scale projects around the world.
The Dammam ISTP has a designed capacity of 350,000m3 per day and an initial capacity of 200,000m3 per day. It will serve the western region of Dammam.
The consortium’s scope of work covers the entire investment and includes the engineering, procurement, and construction, as well as operations and maintenance, which will be executed by a wholly-owned Saudi-based company established by the consortium to serve the project – the Dammam West Company for Water.
Commenting on the financial closing, the chief executive officer of the Saudi Water Partnership Company (SWPC), Khaled AlQureshi, said: “Despite global volatility and liquidity issues, and ever-changing market conditions, SWPC and the consortium were able to successfully reach financial closing, in close cooperation with the lenders group.”
“This is a testament to SWPC’s commitment to support and encourage private sector participation in sustainable development by providing lucrative opportunities for local and foreign investors to participate in the implementation of lifeline water projects.
“This will achieve sustainable development, provide job opportunities for young people, and support local output and balanced development, in line with the strategic goals of the Kingdom’s ‘Vision 2030’ and the initiatives approved by the Saudi Council of Ministers to encourage private sector participation in economic development.”
AlQureshi added: “Reaching this stage in the project and resuming construction work under these difficult circumstances indicates confidence in the investment environment in the Kingdom of Saudi Arabia and its suitability for the private sector.”
The managing director of Metito, Rami Ghandour, said: “While the world is navigating through the unprecedented and testing times due to the fast-evolving COVID-19 pandemic, we are delighted to share a strategic milestone for the water and wastewater industry in MENASA region.
“The financial structure for this project is a testament to its importance, scale and impact, and the confidence of all stakeholders in its sustainable success.
“We are confident that with the continued support from SWPC the Dammam ISTP will pave the way for similar developments in the future that can contribute to a more efficient water sector in the Kingdom and beyond,” Ghandour added.
Since breaking ground on the Dammam West site in February 2020, work has continued without interruption and the project remains on track.