US$1.59 billion Red Sea Project achieves financial close

1 March 2022

A consortium led by ACWA Power, and composed of SPIC Huanghe Hydropower Development Company and Saudi Tabreed Cooling Company, has achieved financial close for US$1.302 billion in senior debt facilities for the Red Sea multi-utilities project. ACWA Power had been appointed by The Red Sea Development Company (TRSDC) to design, build, operate and transfer the project’s utilities infrastructure and relies entirely on renewable energy for power generation, water production, wastewater treatment and district cooling.

TRSDC, the developer behind what is being called the world’s most ambitious regenerative tourism project, is the procurer of the project. All the utilities are being procured under a single offtake arrangement, unique for a contract of this kind. 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 340 MW solar photovoltaic plant with an associated storage system utilising a battery energy storage system plant for captive use, which at a design capacity of close to 1.2 GWh will, upon deployment, be one of the world’s largest utility-scale BESS systems. The system is currently sized to meet the initial demand of TRSDC, with the ability to expand in line with the development. The energy system has been designed to 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 cu metres per day at the project for the provision of clean drinking water, a waste management centre and an innovative sewage treatment plant that will allow the creation of new wetland habitats and supplementing irrigation water for the TRSDC landscape nursery.

The senior debt project is financed through a combination of US dollar denominated and Saudi Riyal denominated financing provided by a consortium of Saudi Arabian and international banks, including 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).

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