SWPC, consortium reach financial close for $280m ISTP project in KSA
The Jeddah Airport 2 ISTP project was awarded under a BOOT model to be developed under a 25-year PPP model
The Kingdom of Saudi Arabia’s Saudi Water Partnership Company (SWPC) and a consortium composed of Marafiq, Veolia, and Amwal AlKhaleejiah have successfully achieved the financial closing of the $280m Jeddah Airport 2 independent sewage treatment plant (ISTP) project.
Marafiq, the power and water utility company for Jubail and Yanbu, is the lead developer on Jeddah Airport 2 ISTP project, which was awarded under the build, own, operate and transfer (BOOT) concession model, and will be developed under a 25-year public-private partnership (PPP) model.
Marafiq has partnered with Veolia, and Amwal AlKhaleejiah, who will support the development, financing, engineering, procurement, construction, implementation, ownership, operation, maintenance, and transfer of the Jeddah Airport 2 ISTP project.
Despite the COVID-19 pandemic, the consortium's teams have issued a notice to proceed with the EPC contractor as per the agreement with SWPC.
Stage 1 will treat 300,000m3 per day, scheduled to be commissioned on January 31, 2023. Stage 2 is expected to add another 200,000m3 per day, when the new STP capacity exceeds specific utilisation rates.
The $280m total project costs have been structured as non-recourse project finance, with funding sourced from a combination of senior project finance loans by the National Commercial Bank (NCB) and equity contributions from shareholders.
The Marafiq-led consortium has also succeeded in establishing a Saudi-based company to serve the project, the Jeddah Althaniya Water company, which will operate the plant for 25 years as part of a partnership between the public and private sectors.
Commenting on the milestone, the president and chief executive officer of Marafiq, Abdullah K Al-Buainain, said: “Marafiq is proud that it has shifted from a conventional utility service provider to a lead developer. Marafiq demonstrates its strength amongst Saudi corporations as it maintains reliable services that benefit the nation and support the 2030 vision.
“Marafiq is honoured to have trusted relationships with local and international developers, as well as fiscal institutes. Marafiq is pleased to be able to support and strengthen the Saudi economy even during such challenging times. We are grateful to our partners Veolia and Amwal AlKhaleejiah, who have assisted us in reaching this stage in the project.’”
The CEO of SWPC, Khaled Z Al-Qureshi, said: “The successful financial closing of Jeddah Airport 2 ISTP, shows the robustness and the efficiency of private-public-partnerships, and we expect to see more of these type of projects as part of the Vision 2030.”
The CEO of Veolia Middle East, Sébastien Chauvin, added: “All the principles of a circular economy will be put in place, allowing the reduction of sludge and enhancing the beneficial reuse of recycled water for irrigation or industrial use.”