RIYADH, Saudi Arabia, April, 15 2013 - King & Spalding represented Jabal Omar Development Company (JODC) on the first project financed district energy concession in the Kingdom of Saudi Arabia to reach financial close under an innovative "end user" build-operate-transfer (BOT) concession model.
JODC is developing the Jabal Omar area located near the courtyard on the western side of the Grand Mosque in the Holy City of Makkah. JODC will own, develop, manage, invest, sell and lease real estate and plots of land in the area. The entire project, which will include 37 towers and many of the world's leading hotel brands, is valued at over US$5 billion and, when completed, will be one of the largest hotel projects of its kind in the world.
Central District Cooling Company, a joint venture between Saudi Tabreed and JODC, signed the 25-year concession agreement with JODC to develop, operate, maintain and finance the 55,000 tons of refrigeration (TR) capacity district cooling scheme (DCS). The DCS will provide all the thermal energy necessary for the entire Jabal Omar Phase 1 development.
"The project is significant because it is the first district energy transaction to reach financial close in the Middle East under an end user BOT concession model. Future deals in the Kingdom and other countries are already looking to follow this model," commented Tim Burbury, King & Spalding's lead partner on the transaction.
Under the "end user" BOT concession model, a captive set of end users, not the concession grantor, offtake the thermal energy generated by the DCS under individual cooling services agreements. The end users are a mix of brand hotels and commercial and retail developments within the Jabal Omar complex.
Jawad Ali, Managing Partner of King & Spalding's Middle East Offices, added: "We are very proud to have worked with our client, Jabal Omar Development Company, on this innovative transaction. They are to be congratulated on this great achievement, which will pave the way for similar transactions in the future in the region. This is another significant first of its kind transaction for our growing Middle East projects team."
Abu Dhabi-based projects partner Tim Burbury led the cross-border K&S team, which comprised fellow Middle East-based partners Jawad Ali, Benjamin Newland, Nabil Issa and Leroy Levy, counsels Tim Tucker and Mohammad Al Amaar and associates Hoda Naghdy, Sara Carmody, Khaled Dahlawi, Asal Saghari, Mahynoor El Tahry and Lachlan Doyle.
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Matt Hyams
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© Press Release 2013
