EXCLUSIVE: Saudi Arabia prequalifies developers for Rabigh 3 IWP

14 January 2018
Plant will have an initial capacity of 600,000 cubic metres a day

Saudi Arabia’s Water & Electricity (WEC) has notified successful developers of their prequalification for the planned 600,000 cubic metres a day (cm/d) Rabigh 3 independent water project (IWP).

WEC received prequalification entries from developers by 30 October, and has now notified successful firms of their prequalification for the impending tender. The client is expected to announce the shortlist imminently before issuing tender documents to prequalified developers.

The client, which is 50 per cent owned by both state utilities Saudi Electricity Company and Saline Water Conversion Corporation (SWCC), is planning to set a bid submission date in April 2018, with the intention of signing the water purchase agreement (WPA) in August 2018.

The client is targeting for financial close to be concluded by October 2018, with the plant to be commissioned by October 2021.

MEED reported in August that WEC had received expressions of interest (EOI) from 55 firms on 21 August for the planned Rabigh 3 scheme. More than 10 developers are believed to have submitted prequalification entries, according to sources close to the project. 

The reverse osmosis (RO) desalination plant will have a capacity of up to 600,000 cubic metres a-day, expandable to 1.2 million cubic metres. The project will have a 25-year concession period, with WEC as the offtaker, supported by a payment guarantee from the government.

The lead adviser for the IWP is the local Banque Saudi Fransi. The client has appointed Germany’s Fichtner Engineering and Consulting as the technical adviser, the UK’s DLA Piper as legal adviser and the UK’s Alderbrook as financial adviser.

The client had originally been planning to tender and award a standard engineering, procurement and construction (EPC) contract to develop the plant. MEED reported in late 2015 that SWCC was planning to issue tender documents for the EPC deal by February 2016. However, as with the vast majority of the kingdom’s major upcoming utilities project, the plant will now be delivered through a public-private partnership (PPP) model as the kingdom seeks to reduce pressure on capital expenditure caused by lower oil revenues.

The Rabigh desalination facility will service the cities of Jeddah, Mecca, Taif and surrounding villages.

SWCC is increasing the role of private investment in the desalination sector as part of the kingdom’s Vision 2030. It is also preparing to privatise existing assets. SWCC forecasts it needs to increase the current desalination capacity of 5.1 million cm/d to 7.3 million cm/d by 2020 to meet growing demand.

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