A water purchase deal has been reached by the Saudi energy company ACWA Power for the 600,000 cubic metre per day Rabigh 4 Independent Water Plant that will be built on the nation's Red Sea coast.
The Saudi Water Partnership Co, a government off-taker, will be the only customer for the project's services according to sources.
The 25-year WPA for the development, construction, operation, and ownership of the water desalination plant utilising reverse osmosis technology was signed between SWPC and Rawabi Water Desalination Co., a project business partially owned by ACWA Power.
In accordance with the agreement, the plant will also create its supporting infrastructure and facilities, including 1,200,000 cubic metre potable water tanks.
The deal is worth SR2.54 billion ($677 million), and the project's financial close is anticipated to occur in the third quarter of 2023.
Ten of the 16 desalination plants operated by Public Investment Fund-backed company ACWA Power, which are spread across four nations, are located in the Kingdom.
Mohammad Abunayyan, chairman of ACWA Power, said: “Our commitment to developing efficient and reliable projects that meet the practical water needs of the community has played a significant role in our contribution towards Saudi Arabia's clean water strategy, including supplying nearly a third of the nation's water needs.”
“As we move forward, we remain dedicated to advancing our support with our upcoming facility, which will set a new standard in terms of capacity and sustainability,” the chairman stressed.
As per SWPC CEO Khalid bin Zuwaid Al-Quraishi, the project is built in a way that enables it to utilise less electricity, have reduced operating expenses, and support domestic content in terms of the supply chain and employment.
According to Al-Quraishi, the plant, which is scheduled to go into operation in 2026, will show how reverse osmosis technology works in practise.
Additionally, the plant is anticipated to increase local capacity in the Rabigh region by 100%.
“These agreements will achieve the goals for water production projects in partnership with the private sector that supplies industries, communities, and people across the Kingdom of Saudi Arabia,” said the Minister of Environment, Water and Agriculture Abdulrahman bin Abdulmohsen Al-Fadhli, in a statement.
“We expect that Rabigh 4 will directly serve pilgrims from around the world in the holy cities of Makkah and Madinah and serve households in the wider region,” Al-Fadhli added.
Its goal is to promote private sector innovation and entrepreneurship while reliably and responsibly supplying nations with energy and desalinated water to support their social and economic development.