ACWA Power led consortium achieves financial close for Red Sea Project

A consortium led by ACWA Power has achieved financial close for the $1.302bn senior debt facilities for the Red Sea Project.

The consortium also consists of SPIC Huanghe Hydropower Development Company and Saudi Tabreed Cooling Company.

The senior debt project is financed through a combination of US dollar denominated and Saudi Riyal denominated soft mini-perm and long-term financing provided by a consortium of Saudi Arabian and international banks,. These include the Al Rajhi Bank, APICORP, Bank Saudi Fransi, Riyad Bank, Saudi British Bank, Saudi National Bank and the Standard Chartered Bank.

The contract was procured as an independent public-private partnership (PPP), intended to cover the design, construction and operation of the systems providing utilities, accompanied by the associated networks and infrastructure. Not investing its own capital, the Red Sea Project is instead committing to purchase its utilities from the consortium for the next 25 years.

Saudi Arabia’s Public Investment Fund (PIF), which owns TRSDC, will provide the guarantee for the 25-year offtake agreement. ACWA Power had been appointed by The Red Sea Development Company (TRSDC) to design, build, operate and transfer The Red Sea Project’s utilities infrastructure, which relies on renewable energy for power generation, water production, wastewater treatment and district cooling.

The project includes the provision of renewable power, potable water, wastewater treatment district cooling and solid waste treatment for 16 hotels, an international airport and infrastructure that make up phase one of The Red Sea Project in Saudi Arabia. The energy requirements for the development will be generated on a sustainable, fully dispatchable basis by a 340MW solar photovoltaic plant with an associated storage system utilising a battery energy storage system (BESS) plant for captive use.

The system is currently sized to meet the initial demand of TRSDC, with the ability to expand further. The energy system will allow the development to remain completely off-grid and powered by renewables, with phase 1 expected to launch at the end of this year.

The scope of the project also includes construction of three seawater reverse osmosis (SWRO) plants, totalling a capacity of 32,500 cubic meters per day at the project, designed to provide clean drinking water, a waste management centre and an innovative sewage treatment plant (STP). The treatment plant will ensure waste is managed in a way that enhances the environment, by creating new wetland habitats and supplementing irrigation water for the TRSDC landscape nursery.

“The Red Sea Development Project, in Saudi Arabia, spanning an area the size of Belgium, is a remarkable project in terms of vision, ambition, size and scope that pioneers responsible regenerative tourism, preserving the planet for future generations while enhancing the offering and experience of tourists,” said Paddy Padmanathan, chief executive officer and vice chairman, ACWA Power.

“We’re proud to be the provider of all utility services to the very exacting zero carbon emission, zero waste and zero plastic standards. And most importantly, the commitments from such a diverse group of lenders is a testament to the strength of the vision and structure of this transaction.”