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Saudi Arabia signs $426.5 million agreement to finance desalination plants

  • Saudi Arabia signs $426.5 million agreement to finance desalination plants
Schneider Electric
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The Minister of Environment, Water and Agriculture of Saudi Arabia, Abdul Rahman bin Abdul Mohsen Al-Fadhli, who also chairs the General Authority for Salt Water Desalination, has signed a commercial ‘bridge’ financing deal ─ the first in the country ─ to improve asset use and boost the efficiency of two desalination plants, informs Utilities Middle East. The agreement with local banks, for $426.5 million, was done in coordination with the National Center for Debt Management.

Phase 1 of the Jubail desalination plant and Stage 2 of the Al Khobar project, which currently use thermal technologies, will be upgraded to use modern reverse osmosis technologies. The total capital cost will be about $959.5 million.

A statement by the official Saudi Press Agency affirms the change to modern reverse osmosis technologies can increase daily production by twofold, at the same time as the efficiency of asset investments is improved, through energy efficiency and reduced operating costs (by up to $333 million). Moreover, reverse osmosis results in lower emissions of greenhouse gases.

The new agreement follows Saudi Arabia’s vision: it aims to improve the quality of water services, while diversifying financing means to achieve greater financial stability, and continuing the trend towards privatisation in the water industry. The National Center for Debt Management was responsible for advice on financing solutions to benefit the water sector.

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