The key project agreements were signed on 31 July for the 100,000-cubic-metre-a-day (cm/d) desalination plant at Skikda with project company Aguas de Skikda. The signing coincided with financial close of a 25-year, $110 million loan facility with a margin of 3.5 per cent from local banks Credit Populaire d'Algerie(CPA) and Banque Nationale d'Algerie (BNA).
Construction work on the build-own-operate (BOO) contract is set to begin in late September and take 24 months, followed by a 25-year operation and maintenance (O&M) agreement. Aguas de Skikdais made up of state-owned Algerian Energy Company(AEC)and Spanish group Geida, led by Cobra Instalaciones & Servicios. Spain's Caja de Madridand Spanish export credit agency Instituto de Credito Official had previously been mandated to arrange the debt, but new Finance Minister Mourad Medelci, appointed in May, decreed that desalination projects must be financed by local banks in order to absorb excess banking liquidity (MEED 22:7:05). Financial close is expected by the end of September on the 150,000-cm/d seawater reverse osmosis (RO) facility at Beni Saf, also to be operated by a project company made up of Geida and AEC. CPA and BNA are expected to provide a similar loan to that agreed for Skikda, with construction set to begin in November. Site visits have also recently been held for the four companies shortlisted for each of four other desalination contracts, at Mostagenem, Tlemcen and two in Algiers. Commercial bids are likely to be submitted in late September (MEED 11:2:05).