Saudi Arabia’s first sewage treatment project based on public-private partnership model has achieved financial closure of $245 million despite COVID-19 pandemic.
The developer consortium and project off-taker Saudi Water Partnership Company (SWPC) announced on Monday the financial closure of Dammam West Independent Sewage Treatment Plant (ISTP) project.
The total project value is approximately $245 million (920 million Saudi riyals), with funding sourced from non-recourse project finance loans and equity contributions from shareholders, a statement issued by consortium leader Metito said.
The Build-Own-Operate-Transfer project was awarded by SWPC to the consortium of Metito, Mowah and Orascom Construction in December 2019 for a period of 25 years.
A group of local and international banks, including the National Commercial Bank (NCB), Sumitomo Mitsui Banking Corporation Europe (SMBC), and Arab Petroleum Investment Corporation (APICORP) provided the non-recourse project financing totalling $160 million (601 million riyals).
The Dammam ISTP has a designed capacity of 350,000 cubic metres per day (m3/day) and will serve the western region of Dammam.
SWPC CEO Khaled Al Qureshi said the successful financial closing despite global volatility and liquidity issues will encourage local and foreign investors to participate in the implementation of water projects in the kingdom.
“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," he said.
Since breaking ground on the Dammam West site in February this year, work has continued without interruption and the project remains on track, the statement noted.
Rami Ghandour, Metito Managing Director, added that 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.”
(Writing by Anoop Menon; editing by Seban Scaria)
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