|17 February, 2020

Engie consortium preferred bidder for Saudi Yanbu project

The new plant will feed Makkah and Madinah regions with potable water

A tour guide walks past the filters in the Reverse Osmosis Building during tour of the Carlsbad Desalination plant in Carlsbad, California, December 14, 2015. Image used for illustrative purposes.

A tour guide walks past the filters in the Reverse Osmosis Building during tour of the Carlsbad Desalination plant in Carlsbad, California, December 14, 2015. Image used for illustrative purposes.

REUTERS/Earnie Grafton

Saudi Water Partnership Company (SWPC) has announced that a consortium comprising French multinational utility group Engie and local water desalination company Mowah has emerged the preferred bidder to build a major desalination plant in Yanbu region of Saudi Arabia.

One of the kingdom's ambitious projects, Yanbu-4 IWP - will be using reverse osmosis (RO) seawater desalination technology and on completion will boast a potable water capacity of up to 450,000 cu m per day, stated SWPC (formerly Saudi Water & Electricity Company).

As per the deal, the Engie consortium will be responsible for the development, design, financing, construction, commissioning, operation and maintenance of the desalination plant which will come up near the town of Ar Rayyis (140 km west of Madinah).

Located on the Red Sea coast of Saudi Arabia, the new plant will feed Makkah and Madinah regions with potable water. Yanbu-4 IWP will include two days storage tanks as well as solar power to reduce the power consumption from the network.

A total of 71 developer consortiums had expressed interest in the Yanbu-4 IWP in September last year including global giants such as SNC Lavalin; Suez International, Veolia, Tecnicas Reunidas besides Sumitomio and JGC Corporation (Japan); Bechtel (US) and Doosan Heavy Industries besides UAE groups Mubadala, Masdar and Utico, said senior SWPC sources.

Of these around 30 were Saudi developers led by regional heavyweights Saudi Binladin Group; Abdul Ali Al Ajmi Company; Abdullatif Jameel Commercial Development Company; Alfanar Company besides GS Inima Environment; Gulf Investment Corporation and Marafiq, they stated.

According to SWPC, Engie-Mowah consortium had emerged the preferred bidders after submitting the lowest levelized water costs of SR1.7446 per cu m compared to FCC Aqualia-HAACO-Alfanar consortium's cost of SR1.7775 per cu m, Acwa Power-Albabtain-GIC consortium's SR1.8435 and Marubeni Corporation-Marafiq consortium's SR1.9168.

The highest water costs of 2.0242 were quoted by the consortium comprising Veolia-Alkhorayef-Al Bawani, it stated.

The Engie-Mowah consortium is now expected to sign a 25-year water purchase agreement, under which the consortium will sell the entire capacity and output to SWPC.

A strategic project for the Saudi region, the Yanbu Phase 4 Independent Water Project has several leading global industry experts in the advisory role.

Sumitomo Mitsui Banking Corporation DIFC Branch is the lead and financial advisor for the transaction, DLA Piper Middle East the legal advisor and ILF Consulting Engineers the technical advisor.-TradeArabia News Service

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