Saudi Water Partnership Company (SWPC) and the consortium led by the Metito Group and comprising the companies; “Metito”, “Mowah”, and “Orascom Construction” (the Consortium) 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, in Dammam West. The project is worth US$245M with the investment made up of a combination of equity and debt.
The financial close of this ‘first of its kind’ project comes in spite of the global Covid-19 pandemic, which has frozen many large-scale projects around the world. The Dammam ISTP has a designed capacity of 350,000 cubic meters per day and an initial capacity of 200,000 cubic meters per day and will serve the western region of Dammam.
Khaled AlQureshi, Chief Executive Officer Saudi Water Partnership Company, 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 of 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”, added AlQureshi.
The project is worth US$245M with the investment made up of a combination of equity and debt
The Consortium scope of work covers the entire investment and includes the EPC and O&M 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.
The total project costs approx. $245m (SAR920m), with funding 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).
“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”, stressed AlQureshi.
On behalf of the Consortium, Rami Ghandour, Metito Managing Director, said: ‘While the world is navigating 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. Today marks the successful financial close of the Dammam ISTP, a pioneering project in the Kingdom and the 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.
The successful financial closing marks a significant achievement for the Saudi Government and the wider region, demonstrating sustained commitment to development in the water sector. Since breaking ground on the Dammam West site in February this year, work has continued without interruption and the project remains on track.
Project Sponsors International Legal Advisors: Covington & Burling LLP
Project Sponsors Local Legal Advisors: Hatem Abbas Ghazzawi & Co
Project Sponsors Financial Advisor: Synergy Consulting
Project Sponsors Insurance Advisor: Willis Towers Watson
Lenders International Legal Advisors: Allen & Overy LLP
Lenders Local Legal Advisors: Baker & McKenzie Habib Al Mulla
Lenders Insurance Advisor: INDECS Consulting Limited
LTA: ILF & Partners Engineering