UAE-based developer Nakheel is developing a streamlined financing and procurement model for water treatment and supply on its largest projects, based on a new joint venture with Australia’s Macquarie Bank.
The joint venture, which is being formed through the developer’s Nakheel Capital subsidiary, will initially invest equity in wastewater treatment schemes on three existing Nakheel developments in Dubai, at the Waterfront, Jumeirah Golf Estates and International City.
However, according to sources close to the venture, its remit could be expanded to include desalination projects and other major Nakheel developments.
Nakheel Capital and Macquarie will secure debt financing and run the procurement process for design-build-operate contractors, effectively taking on the role of financial adviser.
The new model will not be applied to all of Nakheel’s projects. Its use will be limited to large projects that require a lot of financing.
“Nakheel has a lot of big projects,” says one UAE-based source with knowledge of the deal. “It has all the parties [to the various projects] raising money off the back of the Nakheel name. It wants to centralise that process.
“Nakheel also wants to control its projects itself. Nakheel Capital will have an ongoing ownership role. It will build up a portfolio of assets and can create a fund or take it to market.”
Nakheel Capital and Macquarie have already taken over the concessions for wastewater schemes on the three developments in Dubai. The joint venture has replaced Palm Water, Nakheel’s sister company, which formerly held the concession.
The design-build-operate contracts for two of the projects have already been awarded. A consortium of France’s Degremont and Belgium’s Besix is the contractor on the Jumeirah Golf Estates sewage treatment plant (STP). The plant will have capacity of 220,000 cubic metres a day (cm/d).
The second project awarded, a 110,000-cm/d plant at International City, is being built by a team of South Korea’s Samsung Engineering with Sharjah-based Metito and Kuwait’s Mushrif Trading & Contracting Company.
The bidding process for the 220,000-cm/d Waterfront STP is ongoing. According to one source close to the project, the three bidders shortlisted for the work have all confirmed their continued interest in the scheme despite the change.
They are Malaysia’s Malakoff Berhad with the US’ GE Infrastructure, Japan’s Hitachi with YTL of Malaysia and Metito with Ger-many’s Berlinwasser.
Under the new arrangement, and on future projects, Nakheel will act as the grantor of the concession. The concession will be owned by Macquarie Bank and Nakheel Capital, although additional shareholders may be brought in.
The concessionaire will treat the water and provide it to Nakheel or directly to customers, who will pay a tariff for the service.