Saudi Arabia- In a significant stride towards bolstering water infrastructure in the Makkah region of Saudi Arabia, the Saudi Water Partnership Company (SWPC) is set to initiate a groundbreaking venture—the Independent Strategic Water Reservoir (ISWR) Jeddah water PPP project. This ambitious undertaking aims to establish a potable water reservoir with an impressive capacity of 5,000,000 cubic meters in the bustling city of Jeddah. What sets this project apart is its innovative financing model, relying on a Public-Private Partnership (PPP) framework.
Scheduled for tender in the year 2023, the ISWR Jeddah project is projected to achieve commercial operation by 2027. This venture is a pivotal component of the Six Independent Strategic Water Reservoir (ISWR) Programme, a grand initiative involving the creation of six standalone strategic water reservoirs with a cumulative capacity approaching 20 million cubic meters.
The process to select the private sector developer or consortium of developers to spearhead this endeavor will be a rigorous and competitive one. The Saudi Water Partnership Company (SWPC) will oversee a meticulous tender process designed to identify the ideal entity for the project’s design, financing, construction, operation, and maintenance.
One of the noteworthy aspects of the ISWR Jeddah project is its potential to generate employment opportunities. With an estimated 600 jobs expected to be created over its lifecycle, this initiative not only addresses crucial water infrastructure needs but also contributes to the economic landscape by providing employment opportunities for the local workforce.
The financial magnitude of the project is substantial, with an investment size anticipated to fall within the range of SAR 2.4 billion to SAR 2.8 billion. To fund this endeavor, a combination of equity and debt will be employed, with debt being structured on a limited or non-recourse basis. The project’s appeal extends beyond national borders, attracting interest from international lenders keen on participating in this groundbreaking water reservoir development.
The payment mechanism for the ISWR Jeddah project adheres to a standard structure observed in previous SWPC projects. This includes components such as the Capital Cost Recovery Rate, Fixed O&M Recovery Rate, Variable O&M Recovery Rate, and Electricity Charge Rate. These components collectively form a robust financial framework that ensures the project’s sustainability and viability.
What sets the ISWR Jeddah project apart is its pioneering nature. As the first strategic water reservoir in Saudi Arabia and the entire Middle East to be procured through a Public-Private Partnership (PPP) model, it marks a paradigm shift in how such critical infrastructure projects are conceived and executed.
Environmental stewardship is at the forefront of the project’s priorities. Developers participating in the tender process are mandated to comply with local environmental regulations. Furthermore, a comprehensive environmental impact study will precede project execution, underscoring a commitment to sustainable development practices.
As anticipation builds around the ISWR Jeddah water PPP project, three consortiums have emerged as potential bidders. These consortiums include Abdul Aziz Al Ajlan Sons Co. for Commercial & Real Estate Investment and Orascom Construction, Nesma Company, Al Jomaih Energy & Water Company, and Buhur for Investment Company, and Vision International Investment Company and Gulf Investment Corporation G.S.C and TAQA.
The ISWR Jeddah water PPP project stands as a testament to Saudi Arabia’s dedication to advancing infrastructure and ensuring sustainable water resources for its burgeoning cities. With its innovative financing model, international appeal, and commitment to environmental responsibility, this project paves the way for a new era in strategic water reservoir development.
Source: Saudi Water Partnership Company
