A consortium led by ACWA Power, and composed of SPIC Huanghe Hydropower Development Company and Saudi Tabreed Cooling Company, has achieved financial close for the US$1.302 billion senior debt facilities for the Red Sea multi-utilities project. ACWA Power had been appointed by The Red Sea Development Company (TRSDC) to design, build, operate and transfer The Red Sea Project’s utilities infrastructure and relies entirely on renewable energy for power generation, water production, wastewater treatment, and district cooling.
TRSDC – the developer behind the world’s most ambitious regenerative tourism project, is the procurer of the project – where all the utilities are being procured under a single offtake arrangement, unique for a contract of this kind. The project includes the provision of renewable power, potable water, wastewater treatment district cooling, and solid waste treatment for 16 hotels, an international airport, and infrastructure that make up phase one of The Red Sea Project in Saudi Arabia.
The energy requirements for the development will be generated on a sustainable, fully dispatchable basis by a 340MW solar photovoltaic plant with an associated storage system utilizing a battery energy storage system (BESS) plant for captive use, which at a design capacity of c. 1.200 GWh will, upon deployment, be one of the world’s largest utility-scale BESS systems. The system is currently sized to meet the initial demand of TRSDC, with the ability to expand in line with the development. The energy system has been designed to allow the development to remain completely off-grid and powered by renewables, with phase 1 expected to launch at the end of this year.
The scope of the project also includes the construction of three seawater reverse osmosis (SWRO) plants totaling a capacity of 32,500 cubic meters per day at the project, designed to provide clean drinking water, a waste management centre, and an innovative sewage treatment plant (STP) that will allow waste to be managed in a way that enhances the environment, by creating new wetland habitats and supplementing irrigation water for the TRSDC landscape nursery.
“The Red Sea Development Project, in the Kingdom of Saudi Arabia, spanning an area the size of Belgium, is a remarkable project in terms of vision, ambition, size, and scope that pioneers responsible regenerative tourism, preserving the planet for future generations while enhancing the offering and experience of tourists,” said Paddy Padmanathan, Chief Executive Officer and Vice-Chairman, ACWA Power.
“We’re proud to be the provider of all utility services to the very exacting zero carbon emission, zero waste, and zero plastic standards and are delighted to have achieved this milestone on yet another path-breaking project that is helping to meet the clean energy ambitions of Vision 2030. And most importantly, the commitments from such a diverse group of lenders is a testament to the strength of the vision and structure of this transaction and, above all, underpins the faith and belief that financial markets have in ACWA Power’s track record and in our expertise and capability in delivering large scale projects within the public-private partnership framework.”
The senior debt project is financed through a combination of US dollar-denominated and Saudi Riyal denominated soft mini-perm and long-term financing provided by a consortium of Saudi Arabian and international banks, including the Al Rajhi Bank, APICORP, Bank Saudi Fransi, Riyad Bank, Saudi British Bank, Saudi National Bank, and the Standard Chartered Bank.
The contract was procured as an independent public-private partnership (PPP), intended to cover the design, construction, and operation of the systems providing utilities, accompanied by the associated networks and infrastructure.
The Red Sea Project is not investing any of its own capital and is instead committing to purchase its utilities from the consortium for the next 25 years. Saudi Arabia’s sovereign wealth vehicle the Public Investment Fund (PIF), which owns TRSDC, will provide the guarantee for the 25-year offtake agreement.