The expansion to Jordan’s As-Samra wastewater treatment plant has reached financial close. The expansion will increase the capacity of the project from 267,000 cubic meters a day (cm/d) to 364,800 cm/d and will be constructed and maintained under a 25-year build-operate-transfer (BOT) contract.
The project has a total cost of $225m, of which $93m is a grant from the US government’s Millennium Challenge Corporation (MCC). France’s Suez Environment, the US’ Infilco Degremont and the US’ Morganti Group provided equity for the project under an 80:20 debt:equity split.
The following local banks – led by Arab Bank – provided debt for the project:
- Arab Bank – JD30m ($42.2m)
- Jordan Kuwait Bank – JD25m
- Capital Bank – JD9m
- Societe Generale (local subsidiary) – JD9m
- Social Security Investment Fund – JD8m
- Bank of Jordan – JD7m
- Investbank – JD4.5m
- Arab-Jordan Investment Bank – JD4.5m
- Bank al Etihad – JD4.5m
Tenor on the debt is 13 years, but could be extended to 20 years. Payments from the project are based on availability and treatment. A minimum payment is guaranteed by the Water Ministry for availability of 160,000 cm/d for the existing plant and 220,000 cm/d once the expansion project becomes operational. A treatment payment is paid on top of this value. The payments are guaranteed by the Finance Ministry.
The project will serve residential populations of Amman and Zarqa governorates and will assist agricultural farmers in the area. The plant’s expansion is expected to take 36 months and will begin in August. In addition to the capacity expansion, the new project will be capable of handling suspended solids and biological materials, among other treatment requirements.
The original As-Samra wastewater project was built in 1985 and consisted of a series of waste stabilisation ponds with a capacity of 67,000 cm/d. The government decided to replace the plant with a more technologically advanced structure with a greater capacity and tendered the construction of a 267,000 cm/d wastewater treatment plant in early 2001.
The new plant was offered as a 25-year concession with a BOT structure. The project cost $169m to build, about half of which was supplied by the US Agency for International Development ($78.1m). The remainder came from government resources ($13.9m), the project company ($17m) and banks ($60m).
Construction began in 2004 and finished in April 2008. Although the existing project has a capacity of 267,000 cm/d, it currently cannot treat more than 220,000 cm/d. The expansion project was announced in early 2009 and financial close was reached on 18 July.
An advisory group comprising the Netherlands’ KPMG, the UK’s Atkins and UK-based firm Allen & Overy was selected to work on the expansion project at the end of 2009. US firm Chadbourne & Parke advised the sponsors in the transaction with financial adviser Alan Cairns of the UK’s Mapstone.
“It was funded exclusively by local banks,” says Marc Norman of Chadbourne & Parke. “Arab Bank succeeded in putting together a strong pool of commercial lenders despite challenging market conditions … MCC’s involvement, its first project financing anywhere in the world, was instrumental.”