Meed | Contractor issues statement on $1.7bn Kuwait project

Contractor issues statement on $1.7bn Kuwait project

30 August 2023

Construction works are advancing on Kuwait's $1.7bn Umm al-Hayman wastewater public-private partnership (PPP) project.

“We are making progress,” notes Stefan Nalbach, general manager of the Kuwait branch of Germany’s WTE Wassertechnik, on a recent social media post, which included video clips of the construction site.

The facility is designed to treat sewage wastewater from southern Kuwait to supply agriculture and various other industries with highly treated sewage effluent (TSE).

The project entails a wastewater treatment plant, which has a design capacity of 500,000 cubic metres a day (cm/d), expandable to 700,000 cm/d at a later date.

It also includes a 450-kilometre-long network of wastewater and TSE pipelines, pumping stations and vast reservoirs.

According to the project company’s website, the plant will have its own 300-kilovolt (kV) substation and “produce its biogas in the course of the purification process, which will cover a huge part of its energy requirements itself”.

The project reached financial close in early 2020.

US/UK-headquartered Hogan Lovells advised WTE on the project. It said in 2020 that WTE is the general contractor for the wastewater treatment facility, which is valued at an estimated €600m ($665m). WTE, along with its partners, will implement the €950m canal network and pumping stations.

WTE will operate the wastewater treatment facility for 25 years and the canal network for three years.

The wastewater treatment plant is being implemented on a build-operate-transfer (BOT) model, while the network facilities are being developed on a design-build-operate basis.

The $1.7bn deal, which Hogan Lovells cited at the time was exclusive of finance and operating costs, is the region's largest standalone wastewater scheme to be procured using the public-private partnership (PPP) model.

The special project vehicle, Umm al-Hayman for Wastewater Treatment Company, is 40 per cent owned by a private consortium of WTE and the local International Financial Advisors (IFA). It is 60 per cent owned by the Kuwait government through the Kuwait Investment Authority (10 per cent) and Kuwait Authority for Partnership Projects (Kapp, 50 per cent).

The 50 per cent shareholding owned by Kapp will be distributed to Kuwaiti nationals through a distribution process managed by Kapp upon completion of the construction activities.