ACWA Power, a leading energy and water transformation company, announced a new strategic step that strengthens its position in the Saudi infrastructure sector, having successfully achieved financial closure for the Ras Mahisan Independent Water Project (IWP). This project is a key pillar in meeting the growing demand for water in the western region of Saudi Arabia.
Project details and production capacity
The Ras Mahisan project is strategically located on the Red Sea coast, specifically 300 kilometers south of Mecca. It is designed to utilize environmentally friendly and energy-efficient reverse osmosis (SWRO) technology, with a production capacity of up to 300,000 cubic meters per day. In addition to the desalination plant, the project includes integrated infrastructure and supporting facilities, including massive potable water storage tanks with a capacity of 600,000 cubic meters, thus enhancing the region's water security.
Financing structure and banking alliances
The company clarified in its statement published on the Saudi Stock Exchange (Tadawul) that the total value of the project financing amounts to SAR 2.074 billion (equivalent to USD 553.2 million). This financing was secured through a strong banking consortium comprising reputable local and international financial institutions: Banque Saudi Fransi (BSF), Riyad Bank, Saudi Investment Bank (SAIB), and Standard Chartered Bank. The financing term extends for approximately 29.5 years, reflecting the financial institutions' confidence in the project's viability and ACWA Power's financial standing, as the company holds a 45% stake in the project.
The strategic and economic importance of the project
This project aligns with the strategic directions of the Kingdom of Saudi Arabia within Vision 2030, which aims to enhance private sector participation in vital infrastructure projects. The Independent Water Project (IWP) model exemplifies the success of the Kingdom's privatization program, contributing to attracting foreign and domestic investment, improving operational efficiency, and reducing capital expenditures for the government.
Furthermore, the project is of particular importance due to its geographical location near Mecca, making it a vital source of water for pilgrims and residents of the western region. The use of reverse osmosis technology also aligns with the Kingdom's green initiatives to reduce carbon emissions compared to traditional thermal desalination technologies, thus reinforcing the concept of environmental sustainability in major water projects.
