The Kingdom’s Saudi Water Partnership Company (SWPC), as part of an alliance with a consortium comprised of France-headquartered ENGIE (40%) and Saudi based Nesma (30%) and Mowah (30%), has achieved financial closure for the Yanbu-4 independent water producer (IWP) plant. The Yanbu-4 IWP plant is the first renewable integrated, seawater reverse osmosis project in the Kingdom that includes storage facilities for two operational days.
The consortium, led by one of the world’s leading low-carbon energy and service solution providers, ENGIE, was awarded the Yanbu-4 project in February 2020 after submitting a successful bid with tariff of SAR 1.7446 halalas per cubic meter of produced water. The project is the first water pipeline in Saudi Arabia developed under the public-private-partnership (PPP) structure and will achieve one of the most competitive specific power consumption levels in the Kingdom. The consortium will develop and finance the desalination plant, which will be operated and maintained by ENGIE in Saudi Arabia. The Yanbu-4 project was awarded by SWPC as a BOO (build, own and operate) contract with a concession term of 25 years with commercial operation expected in the last quarter of 2023.
The Yanbu-4 IWP project is a 450,000 m3/day seawater desalination plant located 140 km West of Medina, near the town of Ar Rayyis, on the Red Sea coast of the Kingdom. The project will utilize reverse osmosis technology to supply potable water to the cities of Makkah and Medina. The project will include solar energy units generating 20 MW of power to reduce grid electricity consumption throughout the desalination process, as well as water storage tanks designed to maintain a capacity of two operational days.
The CEO of SWPC, Eng. Khalid Al-Quraishi, said “Despite the fluctuations, liquidity crises and changing global market conditions, the Saudi Water Partnerships Company and the Consortium succeeded in completing the financial closure procedures in close cooperation with the group of lenders, which indicates the company’s efforts. The Saudi Water Partnership Company will provide full support for investment projects, and to enhance private sector participation in sustainable development by providing the opportunity for local and foreign investors to participate in the implementation of these projects, thus achieving sustainable development, providing job opportunities for young people, and supporting local product and balanced development, in order to achieve the strategic objectives contained in “Saudi Arabia’s vision 2030” and the initiatives approved by the Saudi Council of Ministers to encourage private sector participation in economic development initiatives.”
Turki Al Shehri, CEO of ENGIE in Saudi Arabia noted “Our objective will be to create local jobs, support in increasing foreign direct investment, diversifying the economy, and harnessing the global expertise of ENGIE into the Kingdom of Saudi Arabia. ENGIE is a long-term positive energy partner to the Kingdom and we will ensure that our main objective is a valuable addition to the nation, its people and residents.”
In line with ENGIE’s ambitions for the region, the Yanbu-4 IWP aims to contribute 1.5 Billion SAR to the Kingdom’s GDP and will create 500 direct and indirect full-time jobs. ENGIE and its partners are committed to supporting local talent development and have targeted a Saudization rate of 40% during the construction phase, increasing to 70% within five years of commercial operation. ENGIE will continue to support talent development by offering dedicated and continuous training programs to ensure high-quality, value-added services and knowledge transfer are brought to the Kingdom through its projects.
Spearheaded by the SWPC, the Yanbu-4 IWP project comes as an extension to existing agreements to encourage private sector investment into the development of the Kingdom’s environment, water and agriculture sectors, in line with the goals of the Vision 2030.