Bank of China contributes to a SAR 2.045 billion syndicated loan for the Rabigh 4 Independent Water Plant (IWP) Project

Project narrative

On August 31, 2023, a syndicate of five banks — including the Bank of China (BOC) — SAR 2,045,000,000 ($545.3 million USD) syndicated senior loan agreement with Rawabi Water Desalination Company — a Saudi Arabia-incorporated special purpose vehicle (SPV) and joint venture of ACWA Power (45% equity stake), Haji Abdullah Alireza & Company (Haaco) (35% equity stake), and Almoayyed Contracting (20% equity stake) — for the Rabigh 4 Independent Water Plant (IWP) Project. This loan carried a maturity period of 27.5 years. ACWA Power issued a guarantee limited to its equity commitment and pro-rata of its share in the debt service coverage account. Financial close was reached on September 6, 2023. In addition to BOC, the following lenders contributed to the loan syndicate: Standard Chartered Bank Plc, Saudi National Bank (SNB), Riyad Bank, and The Saudi Investment Bank (SAIB). The proceeds were to be used by the borrower to finance the construction of the Rabigh 4 IWP, a water desalination plant using Sea Water Reverse Osmosis (SWRO) technology with a capacity of up to 600,000 cubic meters per day and associated infrastructure and facilities including potable water tanks with a capacity of 1,200,000 cubic meters and a solar photovoltaic (PV) plant with a capacity of 6.8 MW, located along the Red Sea coast south of Rabigh city in the Rabigh governorate of the Makkah region of western Saudi Arabia. The project had an overall cost of SAR 2.543 billion SAR ($678 million USD), with equity complementing the long-term debt. The plant would service the Mecca and Medina regions once operational. The consortium behind Rawabi Water Desalination Company submitted a levelized water cost (LCW) offer of SAR 1.7162 ($0.458 USD) per cubic meter for the plant. In February 2023, state-owned Saudi Water Partnership Company (SWPC) named the consortium the preferred bidder for the project. Then, in April 2023, SWPC signed SAR 2.54 billion 25-year water-purchase agreement (WPA) with Rawabi Water Desalination Company to develop, construct, operate, and the own the Rabigh desalination plant and to off-take its water. In July 2023, ACWA Power awarded the engineering, procurement, and construction (EPC) contract for Rabigh 4 to a consortium of PowerChina, Shandong Electric Construction Corporation III (SEPCO III), and WETICO. The plant was scheduled to be commissioned on March 31, 2026. The foundation stone was laid on February 12, 2024.