Almar Water Solutions, a company that develops water infrastructures, through Abdul Latif Jameel Commercial Development Company Ltd., together with Marubeni Corporation, Acciona Agua and Rawafid Alhadarah Holding Co., has achieved the financial close for the Shuqaiq 3 desalination plant for a total value of more than 600 MM$.
The transaction involved both Saudi national banking entities and international organizations. Saudi banking institutions included Samba and NBC, along with the participation of international players MUFG (Agent), Crédit Agricole, Norinchukin and SMBC, with the agreement reached just three months after the water purchase contract was signed.
The Shuqaiq 3 desalination plant, which will be located on the Red Sea coast of Saudi Arabia, will supply drinking water to over 1.8 MM people and will create approximately 700 jobs from the start of construction until commissioning of the plant. The project is programmed for completion in the fourth quarter of 2021 and will be developed under a 25-year BOO (build, own, operate) contract scheme.
According to the World Water Development Report 2019, the Middle East is the region of the world with the most severe water scarcity. While the average water availability worldwide is 7,453 m3 per person and year, in the Middle East there is only 736 m3 per person and year, according to the latest available figures from AQUASTAT (n.d.). Water shortage per capita has been increasing and is expected to rise in the future due to population growth and climate change. This trend has also contributed to the over-exploitation of groundwater and the loss of arable land for agriculture.
The new plant will help mitigate the shortage suffered by the inhabitants of the southwestern region of Saudi Arabia, providing a new source of drinking water for both domestic and urban use.