Rayis-Rabigh project reaches financial close
25 March 2024
Saudi Water Partnership Company (SWPC) and the project developer team have reached financial close for the SR7.78bn ($2bn) Rayis-Rabigh independent water transmission pipeline (IWTP) project in Saudi Arabia.
A consortium including Spain's Cobra Instalaciones y Servicios and the local Alkhorayef Water & Power Technologies Company won the contract to develop and operate the kingdom's first IWTP project in September last year.
The Rayis-Rabigh IWTP project will have a length of 150 kilometres (km) and will transmit 500,000 cubic metres a day (cm/d) of drinking water between the two municipalities.
The project's construction period will run for 30 months, after which commercial operations will kick off by the second quarter of 2026.
The duration of the build-own-operate-transfer (BOOT) contract is 450 months, inclusive of the construction period.
According to SWPC chief executive Khalid Al Quraishi, the milestone demonstrates SWPC’s commitment "to fully support investment projects and to increase private sector participation by giving local and foreign investors the opportunity to participate in the implementation of these projects".
MEED previously reported that the team offered a levelised water transmission cost of SR1.25678 a cubic metre for the contract.
Initial plans
The 150km IWTP scheme was initially part of a longer planned project extending from Yanbu.
However, the 39km segment of the initial project running from Yanbu to Rayis has been integrated into the $826m Yanbu 4 independent water producer project that was awarded to a team led by France’s Engie in 2020.
The Rayis-Rabigh scheme is one of four projects comprising the initial batch of the kingdom’s IWTP programme.
Transmission agreement
The project companies implementing these planned projects will provide the entire transmission capacity to SWPC under a 35-year water transmission agreement (WTA).
SWPC’s obligations under the WTA will be guaranteed by a credit support agreement entered into by the Finance Ministry on behalf of the Saudi government.
The transaction advisory team for the first four IWTP projects comprises India’s Synergy Consulting as financial adviser and the local Amer Al Amr and Germany’s Fichtner Consulting as legal and technical advisers, respectively.
The projects align with the kingdom’s National Water Strategy 2030, which aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90% of the national urban supply, to reduce reliance on non-renewable ground sources.
MEED's April 2024 special report on Saudi Arabia includes:
> GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
> BANKING: Saudi lenders gear up for corporate growth
> UPSTREAM: Aramco spending drawdown to jolt oil projects
> DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
> POWER: Riyadh to sustain power spending
> WATER: Growth inevitable for the Saudi water sector
> CONSTRUCTION: Saudi gigaprojects propel construction sector
> TRANSPORT: Saudi Arabia’s transport sector offers prospects
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