Four awards for new desalination capacity

22 November 2005
Awards were made by state-owned Algerian Energy Company (AEC) in late October for the construction of four plants worth more than $500 million. Contracts were awarded on the single bid parameter of price per cubic metre, with awards made on the opening of commercial proposals (see table - MEED 11:2:05).

A Spanish consortium comprising Inima, Aqualia and SPA was awarded two contracts for the development of two 100,000-cubic-metre-a-day (cm/d) plants, one at Cap Djinet in east Algiers and a second at Mostagenem in the northwest. Each contract is estimated to be worth $100 million-140 million.

The estimated $100 million-$140 million contract for a 100,000-cm/d facility at Zeralda in west Algiers was awarded to a consortium of Canada's SNC Lavalinand Spain's Pridesa.

Geida, a Spanish group comprising Cobra Instalaciones & Servicios, Sociedad Anonima Depuracion & Tratamientos (SADYT), Befesaand Codesahas won the estimated $150 million-175 million contract to develop a 150,000-cm/d plant at Honaine in the northwest town of Tlemcen.

The Honaine site is one of two locations in Tlemcen at which desalination facilities are to be developed. The contract for the second Tlemcen facility, a 50,000-cm/d unit at Sidna Oucha, is expected to be awarded by the end of November. The bidders are: Ionics,part of the US' General Electric (GE); the Geida consortium; and the Inima/Aqualia/SPA team.

Technical bids are due by the end of November on a new 50,000-cm/d facility at El-Tarf worth an estimated $55 million-60 million. All six projects will use reverse osmosis (RO) technology and will be built on a build-own-operate (BOO) basis. The contracts also include 25-year operations and maintenance agreements.

The foreign partners will take a 51 per cent equity share in the new project companies, with AEC and state water company Algerienne des Eaux (ADE)taking the remaining 49 per cent. Offtake agreements are in place with state energy company Sonatrach and ADE for the sale of the water over a 25-year period. Sonatrach will take on the payment obligations, with ADE distributing the water.

The six projects will be financed by an 80:20 debt/equity split, which is set to replace the 70:30 model for future AEC contracts. 'We have increased the debt portion because it's less expensive than equity and we want to increase our leverage,' says a source close to the project. In line with Algiers' new project finance policy, the loan elements will be provided by local banks, with Banque Nationale d'Algerie (BNA), Credit Populaire d'Algerie (CPA), Banque de Developpement Local and Banque Exterieure d'Algerie (BEA) the most likely sources of funding (MEED 22:7:05).

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