Jeddah, December 27, 2006:
The International Finance Corporation, the private sector arm of the World Bank, and the General Authority of Civil Aviation of the Kingdom of Saudi Arabia announced today that a winning bidder has been selected for a long-term concession to develop a new desalination plant for King Abdulaziz International Airport in Jeddah.
IFC advised and assisted the airport authority in structuring this public-private partnership transaction under a long-term “build-transfer-operate” concession agreement, with a private sector partner chosen through a competitive bidding process. The airport currently relies on outdated desalination plants, which produce an unreliable and costly supply of water. Under the 20-year agreement, the concessionaire will replace these with a new seawater reverse osmosis plant, which will have an initial capacity of 30,000 cubic meters of potable water per day.
A consortium led by SETE Technical Services S.A. of Greece was selected from among six bidders, based on the lowest quoted price of water. The price quoted by this wining bidder will save the General Authority about $12 million per year.
Bernard Sheahan, IFC’s Advisory Services Director, noted, “Private sector participation in this project will benefit airport users. It will significantly lower the cost of water and introduce international best practices to operate the desalination plant, leading to a more sustainable and better quality water supply for the airport.”
H.E. Abdullah M. N. Rehaimi, President of the General Authority of Civil Aviation, added, “The General Authority is undergoing a rapid transformation into a corporatized organization, with an overall objective of achieving full commercialization. This project and another to expand and rehabilitate Jeddah airport’s Hajj terminal are milestones in our move toward introducing more private sector participation in our activities. The desalination project is very timely, as it will enable us to meet an increasing demand for water. It is a first step in our broader strategy to focus on our core aeronautical-related business.”
Michael Essex, IFC’s Regional Director for the Middle East and North Africa, commented, “Our participation in this successful transaction fits with IFC’s strategy to support and strengthen the role of the private sector and to provide value-added services in the Gulf Cooperation Council region, including Saudi Arabia.”
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
.
