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Five banks agree $545m Rabigh 4 financing

5 September 2023

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A consortium of five local and international banks has agreed to provide SR2.045bn ($545m) of financing for the Rabigh 4 independent water producer (IWP) project in Saudi Arabia.

The Rabigh 4 seawater reverse osmosis (SWRO) IWP will have a capacity of 600,000 cubic metres a day and require a total investment of SR2.54bn, funded by long-term debt and equity.

The banks that have agreed to provide senior debt on a non-recourse project finance basis are:

  • Standard Chartered Bank (UK)
  • Saudi National Bank (local)
  • Riyad Bank (local)
  • Saudi Investment Bank (local)
  • Bank of China (China)

A team led by Saudi utility developer Acwa Power won the contract to develop the project. The team signed a 25-year water-purchase agreement (WPA) with Saudi Water Partnership Company (SWPC) in April this year. 

The team includes local firm Haji Abdullah Alireza & Company (Haaco) and Bahrain’s Almoayyed Contracting.

The consortium submitted a levelised water cost (LCW) offer of SR1.7162 ($0.458) a cubic metre for the contract.

The team subsequently formed Rawabi Water Desalination Company as the project’s special-purpose vehicle, in which Acwa Power maintains a 45 per cent equity stake.

In July, the company awarded a consortium of Chinese firms Power China and Sepco 3, and local firm Wetico the project's engineering, procurement and construction (EPC) contract.

The Saudi government will support SWPC’s obligations under the 25-year WPA.

Project scope

MEED understands the project scope includes developing 1.2 million cubic metres of storage tanks, and extending and connecting to the existing electricity transmission substation.

The Rabigh 4 SWRO plant will service the Mecca and Medina regions, which see a spike in demand during Ramadan and the annual hajj season.

Rabigh 4 is the seventh IWP scheme launched by SWPC as part of the kingdom’s water sector privatisation initiative.

Netherlands-based KPMG Professional Services is the client’s lead and financial adviser on the project, while UK-headquartered Eversheds Sutherland and Canada-based WSP are the legal and technical advisers, respectively.

Further awards

Saudi Arabia has awarded five IWP contracts with a combined total capacity of 2.4 million cm/d since 2018-19. These are Rabigh 3, Shuqaiq 3, Yanbu 4, Jubail 3A and Jubail 3B.

Yanbu 4 has been renamed Ar-Rayis 1 following the integration of the Rayis-Yanbu independent water transmission pipeline into the scheme.

In June last year, SWPC also signed a 25-year WPA for the Shuaibah 3 IWP with a consortium led by Acwa Power and Public Investment Fund (PIF)-owned Badeel, at a value of about SR3bn. The plant has the same capacity as Rabigh 4 and will require an investment of SR3bn.

Unlike the seven greenfield IWPs, this project involves the conversion of the desalination plant at the Shuaibah 3 independent water and power project (IWPP) into an SWRO facility. 

In December, SWPC tendered the contract to develop the 300,000-cm/d IWP in Ras Mohaisen. It expects to receive bids by 1 October.

SWPC plans to procure 50 independent water infrastructure projects, according to its latest Seven-Year Statement covering the years 2022-28.

In addition to the Rabigh 4 and Ras Mohaisen IWP schemes, SWPC’s latest IWP pipeline includes the following:

  • Jubail 4 and 6
  • Jizan 1
  • Shuqaiq 4
  • Rayis 2
  • Tabuk 1
  • Ras al-Khair 2
  • Ras al-Khair 3
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Jennifer Aguinaldo

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