Acciona’s Julio de la Rosa on why regenerative infrastructure promotes sustainability

How do you see sustainable principles applied to giga projects in the Middle East?

The Middle East is among the world’s fastest-growing regions economically, with many ambitious infrastructure and development projects forecasted to attract close to $1tn in investment by 2030, according to a study conducted by Morgan Stanley by the end of last year: The Future of Saudi Arabia: Emerging at ‘Giga’speed.

These mega projects will transform societies and economies – and I believe they could also pioneer new sustainable development practices. Indeed, the region has a unique opportunity to advance a step-change in environmental considerations and emissions reductions in a sector that represents about 30 per cent of global greenhouse gas (GHG) emissions, all aligned with the Saudi Green Initiative which aims to reach ¨net zero¨ carbon emissions by 2060.

More and more cities around the world are looking for ways to build regenerative infrastructures in response to the consequences of the climate crisis. In addition to the dangers posed directly by extreme weather events such as floods and droughts, indirect damage related to infrastructure failure is becoming more frequent due to rising temperatures, making it clear that traditional urban designs and buildings need to change to adapt to the new circumstances.

In response, regenerative infrastructure emerges: systems designed not only to meet today’s needs but also to be able to adapt to tomorrow’s demands having new technologies as main drives of that transformation.

Tell us what regenerative infrastructure entails, and how can it reduce climate impact.

Sustainable infrastructure is infrastructure that is designed and built with long-term environmental, economic, and social impacts in mind taking into account all financial and non-financial aspects. It aims to reduce its impact on the environment, preserve natural resources, and improve the quality of life of local communities.

Regenerative infrastructure are rooted in this idea but go beyond sustainability. While sustainability aims to maintain the status quo and prevent further environmental degradation, regenerative infrastructures take a more proactive approach. Their goal is to create systems that minimise negative impacts on the environment and actively contribute to ecological restoration and social wellbeing. They focus on creating integrated solutions that see infrastructure as part of a larger natural system.

They are based on the idea that construction should be able to regenerate and restore the environment rather than degrade or deplete it. This practice includes the use of green building techniques and technologies, the use of renewable energy and the conservation of natural resources, with the aim of minimising waste and pollution generated by buildings and cities. In addition, regenerative infrastructure aims to improve the health and wellbeing of the community by providing green and healthy spaces to live and work, thus boosting a circular economy.

The Jubail 3B plant is a good example of this type of infrastructure. The desalination plant has the capacity to handle 575 million litres of water daily, using reverse osmosis technology. It’s the most efficient and sustainable desalination technology with the smallest carbon footprint. Two-thirds of the plot, where the plant is located, boasts a 61 Megawatt-peak (MWp)  photovoltaic solar facility, which is developed with the most efficient and sustainable solution in the market. This solar field being the largest in-house solar capability for a desalination plant in Saudi Arabia will have the capacity to reduce the power consumption from the grid helping to significantly reduce the CO2 associated with the water produced in this plant.

The project will also include the storage tanks for daily production, the electrical special facilities (electrical substation and 59 kilometres of an overhead transmission line) and the associated marine works.

This plant will help to contribute to Saudi Arabia’s Vision 2030 and net-zero objectives, which seek to reduce the country’s reliance on fossil fuels and drive the shift to clean energy. Jubail 3B will supply two million people in Riyadh and Qassim once commercially operational in 2024.

Is there any specific kind of finance for these green projects?

Yes, there is, and the answer is green financing, as it provides the financial mechanisms and incentives necessary to support the development of this kind of infrastructure. It enables the allocation of capital towards projects that promote ecological restoration, resource efficiency, and renewable energy, facilitating the transition to a more sustainable and regenerative built environment.

It has gained significant momentum in recent years as governments, investors, and businesses seek to address climate change, promote sustainability, and transition to a low-carbon economy.

Regarding this, last year, we raised $480m in green finance for three sewage treatment plants (ISTPs) in Saudi Arabia. The financing syndicate for Madinah-3, Buraydah-2, and Tabuk-2 included local, regional, and international lenders. The financing structure incorporated an Islamic tranche for 60 per cent of the value of the loans structured as an ‘Ijara Facility’, or Islamic leasing. Investors and financial institutions are increasingly allocating capital to green infrastructure projects such as water treatment plants.

The project companies developed a ‘Green Loan Framework’ in accordance with Green Loan Principles 2021 of the Loan Market Association, the Asia Pacific Loan Market Association, and the Loan Syndications & Trading Associations.

Under this framework, the green loans will finance expenditures related to wastewater treatment projects. S&P Global Ratings has certified the finance for these projects as green, in compliance with best practices. The three ISTPs will treat the wastewater of up to two million inhabitants and contribute to national efforts to conserve and reuse water, in accordance with Saudi Arabia’s Vision 2030, its blueprint for sustainable development and economic diversification.

Vision 2030 places a particular focus on optimising the use of renewable water resources for agricultural purposes and improving the efficiency of municipal and agricultural water consumption.

It is clear that in an ever-changing world scenario, it is essential to think of this type of infrastructure as a necessary asset to create regenerative and resilient cities.