Tamasuk, Acciona, Tawzea Consortium Reaches Financial Close for Three Sewage Treatment Plants in Saudi Arabia

Tamasuk, Acciona, Tawzea Consortium Reaches Financial Close for Three Sewage Treatment Plants in Saudi Arabia

 

  • 3 wastewater treatment plants will produce 440,000 m3/day of high-quality treated water
  • Equity and debt amounting to $650m raised in accordance with the Green Loan Principles, including an Islamic tranche and interest rate hedging
  • Financial close was achieved for all 3 projects in 6 months – the first achieved on a SWPC project in Saudi Arabia.

 

MARCH 7th, 2022, RIYADH. Tamasuk, a diversified infrastructure development and investment company, as part of a consortium including Acciona and Tawzea, have achieved financial close for equity and debt amounting to $650m, including green loans and interest rate hedging for three independent sewage treatment plants (ISTPs) in Saudi Arabia

Madinah-3, Buraydah-2 and Tabuk-2 are the first greenfield non-recourse ‘green’ project financing and interest rate hedging accomplished for Tamasuk, with a combination of international (Bank of Tokyo Mitsubishi, ADIB and Siemens Bank) and local (Alinma Bank and Riyad Bank) lenders.  This is also the first time that Tamasuk is structuring not only a green loan but also an Islamic financing for its water projects, with an Islamic tranche for 60% of the value of the loans structured as an “Ijara Facility”, or Islamic leasing. Investors and financial institutions are increasingly allocating larger volumes of capital to green infrastructure projects, with a clear focus on water projects. The Madinah 3, Buraydah 2 and Tabuk-2 ISTPs are just the latest examples of this rapidly growing global trend.

A Green Loan Framework was developed in accordance with Green Loan Principles 2021 of the Loan Market Association, the Asia Pacific Loan Market Association, and the Loan Syndications & Trading Associations. S&P Global Ratings has certified the finance for these projects as green, in compliance with best practices.

Construction on all three projects will occur simultaneously.  When completed, the three ISTPs will treat the wastewater of up to 2 million inhabitants in three different cities in Saudi Arabia, initially delivering 440,000 m3/day of high-quality treated wastewater which can be used for irrigation and landscaping. Madinah 3 will serve up to 1.5 million inhabitants of existing and future residential areas near the city of Madinah. Buraydah 2 will serve up to 600,000 people and support the projected growth of the city and the nearby town Ash Shimasiya, Tabuk 2, reaching up to 350,000 people, will serve mostly existing and future residential areas in conjunction with Tabuk 1 ISTP, which is currently operational.

Ultimately, Madinah-3, Buraydah-2 and Tabuk-2 will contribute to the achievement of Saudi Arabia’s Vision 2030, its blueprint for sustainable development and economic diversification. Vision 2030 places a particular focus on optimizing the use of renewable water resources for agriculture purposes and improving the efficiency of municipal and agricultural water consumption.

Key environmental features of the ISTP Projects include the recycling of wastewater for agricultural activities; the treatment and reuse of sewage sludge for agricultural use as fertilizer, for cement manufacturing, and for renewable electricity to power the ISTPs. The treated water will replace the use of freshwater resources for farming, contributing directly to the Kingdom’s water security. 95% of the treated wastewater will be available for agricultural use, with the remaining 5% used at the treatment plants.

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