Muscat – GS Inima, Spain-based world leader in the water sector, announced that it has reached financial closure of the Barka V water desalination plant for a value of €135mn.
GS Inima has obtained financing for 100 per cent of the project’s needs by signing a 22-year non-recourse loan under the project finance modality and a equity bridge loan to finance the project’s equity, the company said in a statement on its website.
It said both international and local Omani financial entities have intervened in the long-term financing. ‘The majority share is held by Korea Export-Import Bank (Kexim) followed by Bank Muscat and Standard Chartered Bank. For its part, the equity bridge loan has been financed by KEB Hana Bank London for a term of three years.’
‘Additionally, through the local bank Ahli Bank, a line destined to finance the VAT (value-added tax) of the project has been obtained, which has been an important milestone since this tax has been established very recently in Oman and therefore there were no experiences in this type of financing,’ GS Inima said.
The Barka V independent water desalination project, located 58km west of Muscat, has a capacity of 100,000 cubic meters per day and will supply drinking water to a population of 800,000 people.
The completion of construction and commissioning of the project is scheduled for June 6, 2024 developed under a BOO (build, own and operate) contract basis during an operation period of 20 years.
“It is an honour for us to collaborate with world-class financial institutions to make the Barka V desalination plant project viable, which will contribute to the protection of the region’s water resources and provide a new source of drinking water. Together with Ghubrah III, which will be the largest IWP in the country, we will continue to contribute to the increase and improvement of water infrastructure in Oman,” said Diego de Vera, business development director at GS Inima.
The financial closure of Barka V plant represents an important achievement for GS Inima, as it occurred in a scenario of high uncertainty and volatility in the financial markets caused by the pandemic and later the war situation in Ukraine, Manuel Becerra, finance director of GS Inima noted.
“This result would not have been possible without the joint efforts of our client OPWP, the financing entities and GS Inima. Barka V reaffirms the company’s position as a project financing partner for our clients and increases our recurring revenue base that will support GS Inima’s future growth,” he added.
The Barka V water desalination project is part of the water purchase contract signed in December 2020 between Oman Power and Water Procurement Company (OPWP) and GS Inima for the supply of water for 20 years.
GS Inima recently announced that it started on March 30, 2022 the works for the construction of the Barka V water desalination plant.
GS Inima has a 100 per cent interest in the concession, construction, and operation and maintenance of this project. The plant is designed following the highest standards of quality and respect for the environment that have characterized GS Inima during its 67-year history.
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