Spanish groups Abengoa, ACS and Sacyr Vallehermoso have closed in Algeria, with the Banque Nationale d'Algérie (BNA) the financing agreement to develop the project for construction of the first of the two seawater desalination plants to be built and operated in Algeria. Both installations, once completed, will be the largest desalination plants in the North African country and will be among those having the greatest production capacity in the world through the system of reverse osmosis.
The investment for development of the Skikda plant, to be built in the city of Skikda, to the east of the North African country and close to the border with Tunisia, amounts to $110 million and is the first project finance deal carried out In Algeria with a local bank. The construction works will be completed in the fourth quarter of 2007.
The GEIDA Consortium, formed by the companies Befesa and Codesa (both belonging to Abengoa), Cobra-Tedagua of ACS and Sadyt of Sacyr Vallehermoso, was awarded in April 2004 the construction and operation, under a 25-year concession, of the Skikda desalination plant which, through the system of reverse osmosis will produce 100,000 m³ of drinking water each day and will supply a population of 500,000 persons.
The same consortium, in which each one of the companies holds 25% of capital, was awarded a month later, in May 2004, the construction and operation of another desalination plant in Oran. The financing process for this second plant, which will have the capacity to produce 150,000 m³ of drinking water per day and to supply some 750,000 persons, has already begun. The company Expansión Exterior, held by ICEX and BBVA, is acting as financial adviser to GEIDA on both transactions.
Once both desalination plants (representing an aggregate investment of $280 million) have entered into service, the Spanish consortium will have an installed capacity in Algeria to produce 250,000 m³ per day, which shall serve to provide drinking water to a population of 1,250,000 persons.
During its 25 years of operation, the Skikda plant is scheduled to bring in revenues exceeding $540 million for the sale of water, while those of the Oran plant will amount to close to 800 million.
The Algerian Government is implementing an ambitious desalination plan to alleviate the lack of water in the country. Its short-term goal is to reach one million cubic meters of desalinated water per day.
Source: Sacyr Vallehermoso