Marubeni Corporation, a leading developer and operator of international power projects, said its consortium has started work on Shuqaiq 3 independent water project (IWP) in Saudi Arabia following the closing of a major project finance agreement.

The consortium – which includes Marubeni (45 per cent), Spanish sustainable solutions leader Acciona Agua (10 per cent) and Saudi groups Abdul Latif Jameel Commercial Development Company (30 per cent), Rawafid (15 per cent) - set up a new company, Shuqaiq Three Company For Water, for the development of the Saudi project. 

The contract was awarded by Water and Electricity Company (WEC), the state-owned firm in charge of desalination and water treatment projects, to the company early this year. As per the deal, the water produced at the Shuqaiq plant will be sold to WEC for a 25- year period.

As per the deal, Shuqaiq Three Company For Water will be responsible for the construction, operation, and maintenance of the reverse osmosis (RO)-based desalination plant, which is independent and does not require a fire-based power plant for operation, reflecting the global trend towards renewable energy.

Once the project gets operational in 2021, the plant will generate 450,000 cu m of water per day that can cater to a population of 2 million people.

As a first step, Shuqaiq Three Company For Water has secured a limited-recourse financing loan worth $500 million for this ambitious project.

The Shuqaiq 3 desalination plant, which will be located on the Red Sea coast of Saudi Arabia, will supply drinking water to over 1.8 million people and will create approximately 700 jobs from the start of construction until commissioning of the plant. The project is programmed for completion in the fourth quarter of 2021, and will be developed under a 25-year BOO (build, own, operate) contract scheme.

According to the World Water Development Report 2019, the Middle East is the region of the World with the most severe water scarcity.  While the average water availability worldwide is 7,453 c m per capita per annum, in the Middle East there this drops to only 736 c m, according to the latest available figures from Aquastat.  Water shortage per capita has been increasing and is expected to rise in the future due to population growth and climate change. This trend has also contributed to the over-exploitation of groundwater and the loss of arable land for agriculture.

The Shuqaiq 3 desalination plant will help mitigate the shortage suffered by the inhabitants of the southwestern region of Saudi Arabia, providing a new source of drinking water for both domestic, urban agricultural and industrial use.

This is Acciona’s third desalination plant in Saudi Arabia, enabling the company to provide some 3 million people with water.