Saudi Arabia’s Minister of Environment, Water, and Agriculture, and the chairman of the General Authority for Salt Water Desalination, Eng Abdul Rahman bin Abdul Mohsen Al-Fadhli, has inked the kingdom’s first commercial ‘bridge’ financing agreement with local banks worth $426.5m (SAR1.6bn) to improve the utilisation of assets and increase the efficiency of Phase 1 of the Jubail desalination plant and Stage 2 of the Al Khobar project.
The agreement, which was made in coordination with the National Center for Debt Management, will see the two projects replace current thermal technologies with modern reverse osmosis technologies at a capital cost of approximately $959.5m (SAR3.6bn).
Modern reverse osmosis can double the quantities of daily production, while also increasing the efficiency of asset investment by achieving energy efficiency and lowering operational costs by up to $333m (SAR1.25bn), according to an Arabic statement released by the state-run Saudi Press Agency.
In addition, reverse osmosis is also environment-friendly as it reduces the risks of greenhouse gas emissions.
This agreement is in line with the kingdom’s vision to improve the quality of water services provided; to enhance financial stability by accessing different financing models for water development projects; and to boost the trend of privatising the water sector.
The National Center for Debt Management, represented by the alternative government finance team, provided advisory services on appropriate financing solutions to serve the interest of the water sector.
The achievement reflects the progress of desalination projects in the kingdom, as well as the National Center for Debt Management’s role in diversifying means of financing in line with the kingdom’s Vision 2030.