Firms bid for first Saudi water pipeline PPP

9 March 2023

Saudi Water Partnership Company (SWPC) has received three bids for the contract to develop Saudi Arabia's first independent water transmission pipeline (IWTP) project.

The 150-kilometre-long IWTP project links Rayis in Medina to Rabigh in Mecca.

The bidders are: 

  • Nesma Company / Abdul Aziz Al Ajlan Sons / Ajlan & Bros / Mutlaq Al-Ghowairi Contracting Company / Buhur for Investment Company (local)
  • Cobra Instalaciones y Servicios (Spain) / Alkhorayef Water and Power Technologies (local) / Orascom Construction (Egypt)
  •  Vision International (local) / Taqa (UAE) / Gulf Investment Corporation  ( (GIC) Kuwait)

The Rayis–Rabigh IWTP project will have a transmission capacity of 500,000 cubic metres a day when complete. It is expected to reach commercial operation in 2026.

SWPC issued the request for proposals (RFP) for the contract in August.

Fourteen firms were qualified to bid for the contract to develop the scheme, as MEED reported in December.

SWPC intends to develop the project using a build, own, operate and transfer (BOOT) model.

Initial plans

The 150km IWTP scheme was initially part of a longer planned project that extends from Yanbu.

However, the 39km segment of the initial project, which runs from Yanbu to Rayis, has been integrated into the $826m Yanbu 4 independent water producer (IWP) project, which was awarded in 2020 to a team led by France’s Engie and later renamed Al-Rayis 1.

The 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 are in line with the kingdom’s National Water Strategy 2030, which aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90 per cent of the national urban supply to reduce reliance on non-renewable ground sources.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10661533/main.jpg
Jennifer Aguinaldo
Related Articles
  • Ewec wants carbon-capture readiness for next gas power plant

    17 April 2024

    The request for proposals (RFPs) that will be issued for the next combined-cycle gas turbine (CCGT) plant in Abu Dhabi will explicitly require the developers or developer consortiums to accommodate the installation of carbon-capture facilities once they are commercially viable.

    "A key part of the RFP is to make a declaration that this project will be carbon-capture ready … that such facility will be installed as part of the project once carbon-capture solutions become commercially viable," Andy Biffen, executive director of asset development at Emirates Water & Electricity Company (Ewec), told the ongoing World Future Energy Summit in Abu Dhabi.

    As MEED previously reported, Ewec is considering issuing a tender in the next few weeks for its first gas-fired independent power producer (IPP) project since 2020.

    The greenfield Taweelah C gas-fired IPP is planned to reach commercial operation by 2027, according to a recent Ewec capacity procurement statement.

    "We understand that they might skip the expressions of interest and request for qualifications stage and directly invite qualified developers to bid for the contract," two sources familiar with the project previously told MEED.

    The planned Taweelah C gas-fired IPP is expected to have a power generation capacity of 2,457MW.

    Ewec awarded its last CCGT IPP nearly four years ago. Japan's Marubeni Corporation won the contract to develop the Fujairah F3 IPP in 2020.

    The state utility is considering new gas-fired capacity in light of expiring capacity from several independent water and power producer (IWPP) facilities.

    The plants that will reach the end of their existing contracts during the 2023-29 planning period include:

    •  Shuweihat S1 (1,615MW, 101 million imperial gallons a day (MIGD)): expires in June 2025
    •  Sas Al Nakhl (1,670MW, 95MIGD): expires in July 2027
    •  Taweelah B (2,220MW, 160MIGD): expires in October 2028
    •  Taweelah A1 (1,671MW, 85MIGD): expires in July 2029

    Ewec and the developers and operators of these plants are expected to enter into discussions before the expiry of the contracts to decide whether a contract extension is possible. Unsuccessful negotiations will lead to the dismantling of the assets at the end of the contract period.

    In 2022, MEED reported that Abu Dhabi had wound down the operation of Taweelah A2, the region's first IWPP. The power and water purchase agreement supporting the project expired in September 2021 and was not extended.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11690735/main2323.gif
    Jennifer Aguinaldo
  • Abu Dhabi tenders 1.5GW Khazna solar contract

    17 April 2024

     

    State utility Emirates Water & Electricity Company (Ewec) has issued the request for proposals (RFP) for a contract to develop and operate the UAE capital's fourth utility-scale solar photovoltaic (PV) project.

    The planned Khazna solar independent power project (IPP), also known as PV4, will have a capacity of 1,500MW.

    It will be located in Khazna, between Abu Dhabi and Al Ain, and is expected to reach commercial operation by 2027.

    Ewec expects to receive bids for the contract "in the third quarter of 2024".  

    The state utility prequalified nine companies and consortiums as managing members and another 10 that can bid as consortium members.

    Parties or companies that are prequalified as managing members are free to bid either individually or as part of a consortium. These include:

    • Acwa Power (Saudi Arabia)
    • EDF Renewables (France)
    • International Power (Engie, France)
    • Jera Company (Japan)
    • Jinko Power (China)
    • Korea Electric Power Corporation (Kowepo, South Korea)
    • Marubeni Corporation (Japan)
    • Sumitomo Corporation (Japan)
    • TotalEnergies Renewables (France)

    The following companies can bid as part of a consortium with a managing member: 

    • Al Jomaih Energy & Water (Jena, Saudi Arabia)
    • Avaada Energy (India)
    • Buhur for Investment Company (Saudi Arabia)
    • China Machinery Engineering Corporation (China)
    • China Power Engineering Consulting Group International Engineering Corporation (CPECC, China)
    • Kalyon Enerji Yatrimlari (Turkey)
    • Korea Western Power Company (Kowepo, South Korea)
    • Orascom Construction (Egypt)
    • PowerChina International Group
    • SPIC Huanghe Hydropower Development (Spic, China)

    Ewec's PV1, or Noor Abu Dhabi, has a capacity of 935MW and has been operational since 2019.

    PV2, the 1,584MW Al Dhafra solar IPP, was inaugurated in November 2023. 

    Ewec is understood to have recently awarded the contract to develop PV3, the 1,500MW Al Ajban solar IPP, to a team led by French utility developer EDF Renewables and including South Korea's Korea Western Power Company (Kowepo).

    Ewec said solar energy is integral to achieving its target of producing nearly 50% of its electricity from renewable and clean energy sources by 2030.

    This is due to its "low generation cost and its contribution to reducing carbon dioxide (CO2) emissions from the electricity generation process".

    Like the first three schemes, Khazna solar PV will involve the development, financing, construction, operation, maintenance and ownership of the plant and associated infrastructure.

    The successful developer or developer consortium will own up to 40% of the entity, while the Abu Dhabi government will retain the remaining equity.

    The developer will enter into a long-term power purchase agreement with Ewec.

    Once fully operational, Khazna solar PV, along with Noor Abu Dhabi, Al Dhafra solar PV and Al Ajban solar PV, will raise Ewec's total installed solar PV capacity to 5.5GW and collectively reduce CO2 emissions by more than 8.2 million metric tonnes a year by 2027. 

    UAE-wide target and capacity

    The UAE published its updated national energy strategy in July last year. It includes a plan to triple the nationwide renewable energy capacity to 19GW by 2030.

    The total installed renewable energy capacity of both Ewec and Dubai Electricity & Water Authority (Dewa) stood at about 5.5GW at the start of 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11687552/main.jpg
    Jennifer Aguinaldo
  • Dewa seeks firms for landfill gas energy project

    17 April 2024

    Dubai Electricity & Water Authority (Dewa) has started the process of selecting a developer or developer consortium to build and operate a landfill gas-to-energy project in Al Qusais, in the eastern part of Dubai near the border with Sharjah.

    It has requested expressions of interest from companies, which it expects to receive by 24 April.

    The planned project will be developed on an independent power producer (IPP) basis and will have an estimated electricity generation capacity of 6MW-12MW. 

    Dewa added that the project's precise capacity will depend on generation efficiency.

    Landfill gas extracted from the Al Qusais landfill site will power the generation plant. The gas extraction network is outside the scope of the package and will fall under the responsibility of another government agency, Dubai Municipality.

    Dewa said a guarantee will be provided on minimum gas quantities and quality.

    Dewa will purchase the power generated by the plant from the successful developer or developer consortium under a long-term power purchase agreement.

    Dewa added: "The developer is expected to share ownership of a project company, to be incorporated in accordance with Dubai and UAE laws, with Dubai Green Fund, the first specialised green investment fund in [the Middle East and North Africa], launched under the funding pillar of the Dubai Clean Energy Strategy 2050."

    In February, Dewa and Abu Dhabi Future Energy Company (Masdar) reached financial close on the 1,800MW sixth phase of the Mohamed Bin Rashid Al Maktoum Solar Park in Dubai.

    The solar photovoltaic IPP project is expected to cost up to AED5.51bn ($1.5bn).

    The state utility does not intend to procure additional natural gas-fired capacity in the future.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11689874/main.jpg
    Jennifer Aguinaldo
  • An audience with Diriyah: The $63bn gigaproject opportunity

    16 April 2024

    Register now

    Hear first-hand from Diriyah Company about one of the world's most iconic projects and how your company can participate in its existing and future procurement opportunities.

    This exclusive event will provide a detailed outlook into Diriyah’s development plans and the transformation of ‘The City of Earth’ under the Saudi 2030 Vision.

    Gain key insights into available future procurement opportunities, how to work with Diriyah Company on its extensive project pipeline, and how to register and prequalify to participate in it.

    Agenda:

    1. The Saudi Arabia projects market in context – size, key projects, trends and future outlook

    2. A detailed overview of the Diriyah gigaproject, its masterplan, progress and the more than $10.5bn-worth of construction work awarded to date

    3. Key details of the $50bn+ projects pipeline including specific procurement opportunities, future materials and equipment demand, and how companies can register and help deliver the iconic giga development

    4. An in-depth discussion with Diriyah Company on its requirements, vendor registration and procurement processes, and contracting frameworks

    5. A live Q&A session where you will have the opportunity to ask questions directly to Diriyah Company

    Time: Monday 22 April at 02:00 PM GST

    Hosted by: Edward James, head of content and analysis at MEED

    A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemical market. He is considered one of the world’s foremost experts on the Mena projects market.
     

    Speakers:

    Andrew Tonner, chief delivery officer, Diriyah Company

    Andrew Tonner is the chief delivery officer at Diriyah Company, with 35+ years of property development and construction experience.   One of the first arrivals to the Diriyah Project in 2019, Andrew is now into his second spell with the company. He is currently responsible for construction delivery across 4 masterplans with a combined value of c $62 bn covering 75 km2. See more

    Mohamed Thabet, commercial executive director, design and development, Diriyah Company

    Mohamed Thabet serves as the executive director of DevCo's commercial team. With a background in architecture and advanced studies in construction law, Mohamed brings a wealth of experience in managing complex construction contracts. His career spans roles in engineering, management firms and development, providing him with a comprehensive understanding of the construction industry supply chain. See more

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11687525/main.gif
    MEED Editorial
  • PIF and Acwa Power take on next solar round

    16 April 2024

     

    Saudi utility developer Acwa Power and sovereign wealth vehicle the Public Investment Fund (PIF) are discussing the fourth round of the renewable energy programme that is being implemented by the PIF.

    "We are now looking at the next round," Marco Arcelli, Acwa Power's chief executive, told MEED on the sidelines of the ongoing World Future Energy Summit (WFES) in Abu Dhabi.

    He declined to comment on the outage of one of the company's concentrated solar power plants in Morocco, which is expected to result in $47m of lost revenue for the firm.

    MEED previously reported that Acwa Power is working to reach financial close on three solar photovoltaic (PV) schemes with a total combined capacity of 4,550MW, as part of Saudi Arabia's National Renewable Energy Programme (NREP).

    In February, Acwa Power said the schemes "have satisfied the conditions precedent for senior loans drawdown".

    The next round under discussion by Acwa Power and the PIF is understood to have a similar capacity to the third round.

    The Riyadh-headquartered utility developer and its partner, Water & Electricity Holding Company (Badeel), signed the power-purchase agreements with Saudi Power Procurement Company to develop and operate the three projects in May 2023.

    The three projects, located in the central and northern regions of Saudi Arabia, are:

    • Al Rass 2: 2,000MW
    • Saad 2: 1,125MW
    • Al Kahfah: 1,425MW

    The projects are estimated to cost a combined SR12.8bn ($3.4bn).

    According to Acwa Power's recent bourse filing, the banks that agreed to provide senior debt financing of SR8.6bn ($2.3bn) for the projects include:

    • Banque Saudi Fransi (local)
    • HSBC (UK)
    • Mizuho Bank (Japan)
    • Riyad Bank (local)
    • Saudi Awwal Bank (local)
    • Saudi National Bank (local)
    • Standard Chartered Bank (UK)

    The financing duration is 27.75 years. The project debt financing amount is non-recourse to Acwa Power, which owns a 50.1% equity in the three projects.

    Its partner, the PIF subsidiary Badeel, owns the remaining 49.9% equity in the projects.

    MEED reported in June 2023 that the developer team expected to have the financing in place for the projects last year.

    The three projects take the number of solar PV contracts awarded by the PIF under the kingdom’s NREP to five.

    It awarded contracts for the development of the 1,500MW Sudair solar PV in 2021 and the 2,060MW Shuaibah 2 solar PV in 2022.

    The PIF is mandated to procure 70% of the NREP’s target capacity through the kingdom's Price Discovery Scheme.

    The PIF also owns 44% of Acwa Power.

    Based on MEED data, the three projects take the total number of solar PV contracts developed by an Acwa Power-led team in Saudi Arabia to 10. These projects have a total combined capacity of 10GW.


    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

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11686486/main.jpg
    Jennifer Aguinaldo