SAUDI ARABIA is seeing multiple infrastructure projects being developed under #PPP route in the country, across varied sectors - cleane energy, transport, water, waste management and urban infra. The investors have shown strong interest and confidence in the market with many EOIs receiving 100+ applications. Large-scale financing solutions would be key to support implementation of these projects in next 5-6 years.
Read the key developments in Infrastructure and PPPs in Saudi Arabia in our Q2 2024 insight.
APRIL 2024
ACWA AND ACCIONA COMPETING FOR SAUDI DESALINATION PLANT TENDER
The Saudi Water Partnership Company (SWPC), desalination plant project's development authority, announced that Acciona and a consortium of ACWA, Haji Abdullah Ali Reza, & AlKifah, had made bids for the Ras Mohaisen independent water project (IWP). The Ras Mohaisen IWP involved production of 300,000m3 per day of drinkable water from reverse osmosis (RO) desalination plant and an electrical power substation.
The plant's complete water output will be sold to the SWPC under a 25-year contract by the successful bidder for the project, which is situated near Ras Mohaisen, 300 km south of Mecca on the Red Sea coast. The Saudi authorities also have plans to build USD 900Mn desalination (PPP) project in the planned Neom megacity.
K9 PPP EOIS INVITED BY THE SAUDI GOVERNMENT
The Saudi Arabia’s National Center for Privatization & PPP (NCP), the Zakat, Tax and Customs Authority, are looking for Expressions of Interest for developing country's K9 Training Center and Points of Entry Project. The 21.5-year deal includes K9 training facilities designing, building, financing, operating, maintaining, and transferring of K9 training facilities across 34 Saudi Arabian points of entry (PoE), from where cargo can be brought into the nation.
The project also includes the supply of food, equipment, veterinary care, and a place to stay. By 2030, there will be 8 new facilities operating in addition to the 26 that are now in operation in Saudi Arabia. In keeping with Saudi Arabia's Vision 2030 goals, the country's social infrastructure PPP pipeline has expanded significantly in recent years, and 2023 have seen a record USD 5.6 Bn worth of transactions to reach financial close.
THE ABHA AIRPORT PPP PROJECT AT THE ABHA AIRPORT IN SAUDI ARABIA HAS ATTRACTED 100 COMPANIES
Over 100 companies have responded to participate in the Saudi’s Abha Airport Public Private Partnership (PPP) project, in the Abha City in Aseer region. The project requires an estimated capex of at least USD 500 Mn. This Project EOI was launched in Jan 2024. With an annual passenger volume of 4.4 Mn compared to its planned capacity of 1.5 Mn, the current airport is running above its capacity.
By 2030, the expanded airport expected to have an annual capacity of 8Mn passengers, with the potential to grow to 13 Mn people by 2054. The project has 30-year concession period and to be built under the Build-Transfer-Operate (BTO) model.
SAUDI ELECTRICITY COMPANY AND JAPAN'S JBIC SIGN AN MOU
To deepen their cooperation, Saudi Electricity Company (SEC) and the Japan Bank for International Cooperation (JBIC) have inked a Memorandum of Understanding (MOU) to create solutions for SEC's upcoming projects by means of financial support, product and technology transfers from Japan, and from the investments made by Japanese businesses.
The MOU also intends to broaden the scope of collaboration between Saudi Arabia and Japan by including important agenda like the development of smart cities, the expansion of renewable energy, and the improvement of transmission infrastructure, including interconnection projects. As part of its GREEN operations, JBIC gave SEC a loan in 2023 to finance the interconnection project that will connect Egypt and Saudi Arabia.
MAY 2024
MAJOR DEBT RAISED FOR HOUSING PPP BY A SAUDI’S EL SEIF GROUP
El Seif Group, a Saudi construction company, has raised SAR 2.9 Bn (USD 772 Mn) in loan for a Public-Private Partnership (PPP) to redevelop homes for Aramco workers. The 20-year build, own, operate and transfer BOT project include extension and operation of the Tanajib residential camp, where Aramco Tanajib oil complex worker will stay in the country’s Eastern Province. This project is expected to be completed by September 2026 and involve sewage treatment plant construction for the camp.
SAUDI ARABIA GRANTS WIND TENDERS AT HISTORICALLY LOW-COST TARIFFS
The Saudi wind tenders for 600 MW Al-Ghat and 500 MW Wa'ad Al-Shamal were won by a consortium led by the Japanese trading business Marubeni Corporation and include Saudi construction company Ajlan & Bros. The Saudi Power Procurement Company (SPPC) awarded the project under the 4th round of Saudi Arabia's National Renewable Energy Programme (NREP).
This SPPC signed project have the lowest PPAs ever seen in the industry at rate of USD 0.156/MWh for Al-Ghat and USD 0.17/MWh for Wa’ad Al-Shamal. Post starting commercial operation, SPPC will buy the produced power for a period of 25 years. These wind projects will also be the first in Saudi Arabia to be carried out by Japanese companies.
SAUDI ARABIA LAUNCH MEGA-BUNDLE OF SEWAGE PPPs
Saudi’s National Water Company invited EOI for the next phase of Sewage Treatment plant under the build-operate-transfer (BOT) scheme, this PPP project involves the long-term operation and maintenance (LTOM) of 116 STPs across the nation. The second phase of the LTOM programme is divided into up to 10 different bundles, under which STPs with a combined treatment capacity of 2.46 Mn cubic meters per day will be renovated, operated, and maintained under 15-year contracts.
A levelized tariff that includes service fees for facility operation and maintenance in addition to capital expenses and operations will be used to determine compensation. This LTOM program supports Saudi’s 2030 goal of boosting private sector involvement in the STP sector.
SAUDI ARABIA LAUNCH WATER PPP PROGRAM
Saudi Arabia has begun a large-scale public-private partnership (PPP) program for sewage treatment facilities (ISTP) and independent water project (IWP). The Saudi Water Partnership Company (SWPC) has started the prequalification process for 5 IWP and 7 ISTP PPP projects nationwide. Eligible bidders will then be prequalified to bid on all 12 projects. Three of the projects are expected to open for bids later this year, with planned water treatment capabilities ranging from 50,000 m3/day to 600,000 m3/day.
The leading investors in the Saudi water sector are the Saudi energy giant ACWA Power, which is involved in at least five PPP projects; Mowah, a Saudi water utility, sponsors three schemes; and Nesma, a Saudi holding company, along with Marubeni of Japan, Engie of France, and Orascom, an Egyptian construction company, all of which sponsor two schemes.
JUNE 2024
ZATCA AND NCP ANNOUNCE THE RFQ FOR THE EMPTY QUARTER (RUB'AL KHALI) LAND PORT POWER PLANT PPP PROJECT
Saudi Arabia's National Center for Privatization & PPP (NCP) in collaboration with the Zakat, Tax, and Customs Authority (ZATCA had launched a Request for Qualification (RFQ) to construct a hybrid power plant at the Empty Quarter land port (Rub'al Khali). The project's goal is to decrease reliance on diesel fuel by adopting renewable energy sources and securing enduring power supply at the Empty Quarter land port via a Public-Private-Partnership (PPP), in consistent with Saudi Arabia's Vision 2030.
A Design-Build-Finance-Operate-Maintain-Transfer (DBFOMT) contract model will be used to carry out the project in partnership with the private sector, and it will last for a further 25 years after construction is completed. To meet ZATCA's technical requirements and electricity needs, the project includes designing, constructing, operating, and maintaining a power generation facility and ensuring the facility adheres to specified performance and output criteria, manages power generation, and connects to the ZATCA interface throughout the project's designated duration.
SAUDI LAUNCH EXPRESSION OF INTEREST FOR THE TELEVISION AND RADIO TOWER INFRASTRUCTURE PPP PROJECT IN 143 LOCATIONS
The Television & Radio Towers Infrastructure PPP project is launched by Saudi Broadcasting Authority and the National Center for Privatization & PPP and it involves the development and operation of SBA towers infrastructure by the private sector. This will be conducted under a Rehabilitate-Finance-Operate-Maintain-Transfer (RFOMT) contract model, with a contract duration of 25 years.
This Public-Private Partnership (PPP) project will improve the functionality of the TV and radio tower infrastructure for the media sector at 143 locations in Saudi and expand the number of TV & radio channels by qualifying and upgrading all TV sites from DVB-T/Analogue to DVB-T2. This project aims to increase the high-quality channels and to maintain the TV & Radio Tower Infrastructure. The deadline for EOI submissions is July 21, 2024, at 3:00 PM KSA time.
ZATCA, IN COLLABORATION WITH NCP, LAUNCH EOI FOR WATER AND SEWAGE TREATMENT PLANTS PPP PROJECT AT 10 LAND PORTS
The Expression of Interest (EOI) phase for the Residential Buildings Project at Land Ports through Public-Private-Partnership (PPP) has begun, according to an official announcement from the Zakat, Tax and Customs Authority (ZATCA) and the National Center for Privatization & PPP (NCP). The project has a 23-year contract life, including the construction phase, and will be tendered under the Design-Build-Finance-Operate-Maintain-Transfer (DBFOMT) model.
The project will be carried out at the Kingdom's nine land ports. These comprise the Empty Quarter, Al Batha, Al Durrah, Al Wadiah, Salwa, Al Raqi, Jadidat Arar, Al Hadithah, Halat Ammar, and Al Raqi. The project includes managing and developing residential zones at land ports. It includes planning, developing, and building brand-new housing units and service facilities in addition to renovating current ones and keeping up all buildings for the duration of the contract.
A SPANISH COMPANY WINS SAUDI WATER PPP.
A PPP has been awarded to the Spanish water company Aguas de Valencia for the rehabilitation, operation, and maintenance of two water plants in the Taif governorate of Saudi Arabia. The Valencia-based operator has been awarded a 15-year, SAR 555 Mn (USD 148 Mn) long-term operation and maintenance (LTOM) contract with a levelized tariff of SAR 0.67/m3 (USD 0.18/m3) by Saudi Arabia's National Water Company (NWC).
The two plants will treat 147,000 m3/day of water, and Aguas de Valencia will be paid SAR 0.67 per m3 of treated water. The business also disclosed that the LTOM initiative will continue, with NWC planning to provide 113 existing treatment plants with a 2.4 million m3/day total capacity beginning in 2024. Both domestic and foreign businesses are eligible to invest in these contracts.
FIRST ROAD PPP IN SAUDI ARABIA GLOBAL INTEREST.
The first public-private partnership (PPP) highway of 136km in Saudi Arabia, that connects the Aseer and Jazan regions, attracts over 69 investors and developers that include abrdn, Acciona, Bouygues, Egis, Mota-Engil, Webuild, Australia’s Plenary, 18 European firms, Hyundai & Samsung from South Korea, 38 firms from Middle east, other firms from Australia, India, the US and Canada, China, Malaysia, etc.
The Project includes the construction of a 3x3 highway from the Red Sea coast to the village of Al-Fara in the province of Aseer under a 30-year Design-Build-Finance-Operate-Maintain(DBFOM) contract. The Aseer-Jazan highway, located in the southwest of the nation, will have six intersections, 57 bridges totalling 18 km in length, and 11 tunnels totalling 9.2 km in length. It is one of 200-project PPP pipeline from which Saudi aims to diversify the economy and reducing the oil export dependency.
List of key transactions - Saudi Arabia Q2 2024
Source: YOG INFRA, Public Information
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