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Infrastructure & PPPs in Saudi Arabia - Q1 2024 Update

SAUDI ARABIA is taking steps to promote private sector participation across a range of sectors such as transport, renewable energy, EV charging infra and urban infra projects. We see a need for large scale commercial financing for sch long-term concessions and hence, the bankability and risk-sharing mechanisms are in scrutiny. We see first-of-kind precedent transactions being done as well, for example, in heathcare PPPs.

Read the key developments in Infrastructure and PPPs in Saudi Arabia in our Q1 2024 insight.

 

January 2024

INDIAN CONGLOMERATE ESSAR PLANS SAUDI PORT TERMINAL PROJECT

Indian conglomerate Essar is planning to develop a dry bulk terminal in Saudi Arabia with an initial annual capacity of about 10 Mn tonnes. The investment will be about USD 200 Mn. The facility is intended to cater to an upcoming steel plant that Essar plans to construct in Ras Al-Khair, Saudi Arabia. The Mumbai-based group will be setting up a 4 Mn metric tonnes per year steel plant in the port town. This is aimed at benefiting from the Kingdom’s intentions to become a manufacturing hub for electric vehicles.


RFPs ISSUED FOR SAUDI WATER PROJECT

The Saudi Water Partnership Company (SWPC) has issued requests for proposals to prequalified bidders for the Jubail 4 and 6 independent water projects. Nine teams were prequalified in September for the two schemes, with a total capacity of 600,000 m3/day of drinking water, including Acciona and ACWA Power. Abu Dhabi National Energy Company (TAQA), Japan’s Marubeni and Spanish water treatment company GS Inima were also among the prequalified bidders.

The projects are expected to become operational in the third quarter of 2027. Saudi Arabia has launched several water PPPs in recent years as part of its ambitious infrastructure programme.


SAUDI ARABIA LAUNCHES ABHA AIRPORT PPP

Authorities in Saudi Arabia have launched a PPP for the expansion of the Abha International Airport, one of two such PPPs planned this year. Matarat Holding is the PPP procurement entity which is part of Saudi Arabia’s General Authority of Civil Aviation. The project, which has an estimated capex of at least USD 500 Mn, will involve building a new terminal to the east of the current terminal, with operations anticipated from 2028. The terminal, expected to cover a site of some 73,200 square meters, will be built across multiple phases. The project will also involve construction of a new parking lot to serve the new terminal and a new wastewater treatment plant as well as the expansion of an existing power generation plant.

Under the concession the capacity of the airport, currently Saudi Arabia’s fifth largest, will be expanded so that it can handle 8 Mn passengers by 2030 and more than 13 Mn by 2054. Matarat is procuring the PPP, based in the region of Asir, in collaboration with the National Center for Privatization & PPP (NCP). The PPP is aimed at increasing the number of tourists to the region and its surrounding areas. The Abha tender is expected to be shortly followed by the PPP tender for Taif International Airport, which will have a very similar contract structure except that it involves a greenfield build rather than brownfield expansion.


TAQA CONSORTIUM SIGNS EUR 370 MN SAUDI WATER PPP

A consortium including UAE-based energy company TAQA has reached commercial close on the nearly EUR 400 Mn Juranah Independent Strategic Water Reservoir PPP in Saudi Arabia. The consortium of Abu Dhabi-based TAQA, Saudi investor Vision International and Kuwait-based Gulf Investment Corporation (GIC), has signed the concession agreements with procuring authority Saudi Water Partnership Company (SWPC).

The project, which will be built in Makkah City, aims to increase strategic water storage across the country and is considered the first of its kind to involve the private sector under a Build Own Operate and Transfer (BOOT) model. It involves the 30-year DBFOM of 15 reservoirs with a total capacity of 2.5m cubic metres and is expected to be completed by 2027.The total project cost is AED 1.5 Bn (EUR 373 Mn), with debt funding expected to account for 80%. TAQA is taking a 35% share in the project company and a 50 % stake in the O&M company.

The project is the fourth transmission and distribution project TAQA is pursuing or exploring outside the UAE.


LOCAL CONSORTIUM WINS SAUDI DISTRICT COOLING PPP

Makarem Al Maarifa Hospitality have entered into a public-private partnership (PPP) agreement with a group that includes City Cool, Johnson Controls Arabia (JCA), and ADC Energy Systems in order to construct a chilled water district cooling plant in Madinah.

The contract Requires the construction of a 21,000-ton refrigeration (TR) plant at Al Madinah Hub spread over two phases to supply cooling services to the mall, Hilton tower, and a branded residential tower. ADC Energy Systems will handle the district cooling plant's engineering, procurement, and construction, while JCA will provide the York Chillers. The City Cool will handle facilities management, operation, and maintenance.


February 2024

BIDDERS PREQUALIFIED FOR 7.2 GW SAUDI IPP TENDER

ACWA Power, EDF and Engie are among the bidders prequalified for four thermal independent power producer (IPP) projects in Saudi Arabia with a total capacity of 7.2 GW. Total 17 investors are prequalified for the four 1.8 GW combined cycle gas turbine plants, called Rumah 1 and 2 in the central region and Nairyah 1 and 2 in the eastern region.


SAUDI ARABIA LAUNCHES NATIONAL INFRASTRUCTURE FUND

Saudi Arabia has launched a national infrastructure fund aimed at investing almost EUR 50 Bn into infrastructure projects including in renewables, water, transportation and social infrastructure. It will deploy public investment alongside private capital into vital infrastructure projects to help the Kingdom achieve the goals of Vision 2030. Vision 2030 seeks to reduce the country’s dependence on oil and also enhance the activity of the country’s private sector.

The fund is targeting a pipeline of infrastructure projects worth as much as SAR 200 Bn (EUR 49 Bn) over the next 10 years.


SAUDI AUTHORITY SEEKS EOIs FOR ROAD PPP

Saudi Arabia’s Roads General Authority (RGA) called for EOIs for a PPP involving the development of a highway in the southwest of the country. The RGA together with the National Center for Privatization and PPP (NCP) and Aseer Development Authority is seeking responses by 19 March for the 136 km Aseer-Jazan highway project. The 30-year DBFOM contract will involve the development of a 3x3 highway from the village of Al-Fara in the province of Aseer to the Red Sea coast.

The project, intended to increase road capacity for tourism and trade purposes, will comprise six intersections, 57 bridges with a total length of 18 km and 11 tunnels with a total length of 9.2km. The project was unveiled last April by the NCP as part of a pipeline of 200 planned PPPs aimed at diversifying the economy away from reliance on oil.


TAMASUK, ALGHANIM CONSORTIUM ANNOUNCES FINANCIAL CLOSE FOR AL ANSAR HOSPITAL PPP

Tamasuk, Alghanim Consortium reached successful Financial Close of the Al Ansar Hospital Public-Private Partnership (PPP) project. This ground-breaking accomplishment, made possible by the Saudi Arabian Ministry of Health PSP Initiative, established the standard for upcoming PPPs in the healthcare industry and demonstrates our dedication in improving healthcare services.

The National Center for Privatization & PPP (NCP) and the Ministry of Health Saudi Arabia (MOH) collaborated to award the public-private partnership project to the Alghanim International – Tamasuk consortium. It covers the financing, design, procurement , construction ,commissioning and a 20- year operations and maintenance of a 244-bed public energy hospital and associated facilities.


MASDAR, DP WORLD INK MEA RENEWABLES PARTNERSHIP

Masdar have committed to investigating and creating sustainable energy systems for DP World's globalport activities in Africa and the Middle East. The purpose of the agreement is to make it easier for DP World's worldwide supply chain to widely implement battery energy storage systems (BESS) and renewable energy. With an initial focus on Saudi Arabia, Senegal, and Egypt, DP World and Masdar will collaborate over the course of the three-year agreement to identify the best locations for the possible deployment of solar and energy storage systems.

The collaboration aims to expedite the integration of renewable energy systems into DP World's supply chain by exchanging insights regarding the legal environment and other obstacles, particularly in developing nations.

 

ABOUT YOG INFRA

Our objective is to drive economic growth and make positive social impact through sustainable infrastructure development.

​YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle.

With our offices in Singapore, India and UAE, we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.


For more information about us, our service offerings and team, please visit www.yoginfra.com Contact us at info@yoginfra.com


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