Kuwait $1.6bn wastewater PPP project reaches financial close

Final contracts were signed in January for the country’s second public-private partnership (PPP) project. A consortium led by Germany's WTE will develop the 500,000 cubic metres a day (cm/d) wastewater treatment plant, which will be developed so it can be expanded up to 700,000 cm/d in the future

 

A consortium led by Germany’s Wassertechnik (WTE) has reached financial close for the $1.6bn Umm al-Hayman wastewater public-private partnership (PPP) project in Kuwait, only the second PPP to reach financial close in the Gulf country.

Energy & Utilities reported in January that Kuwait Authority for Partnership Projects (KAPP) and Kuwait's Public Works Ministry had signed the final project agreements with the WTE-led consortium for the planned PPP project.

WTE, in partnership with the local Kuwait International Financial Advisors, will develop the 500,000 cubic metres a day (cm/d) wastewater treatment plant, which will be developed so it can be expanded up to 700,000 cm/d in the future.

The appointed consortium has established the Umm al-Hayman Company for Wastewater Treatment, the special purpose vehicle (SPV) set up to develop and operate and maintain the wastewater plant.

A consortium of six banks led by Commercial Bank of Kuwait (CBK) and Al-Ahli Bank of Kuwait (ABK) has signed a $650m 26-year loan to finance the construction and operation of the Umm al-Hayman wastewater plant.

The financial close of the Umm al-Hayman project will be welcomed by regional and international investors, with Kuwait’s PPP programme having suffered from a number of setbacks since it awarded the contract for its first PPP project, the Al-Zour North 1 independent water and power project (IWPP), in 2013.

In August 2017, KAPP cancelled the tender for the second planned IWPP at Al-Zour had been cancelled, 14 months after developers had submitted proposals. Following the announcement that it had cancelled the tender for the Al-Zour North 2 IWPP, KAPP revealed it would be integrating plans for the previously planned Al-Zour North 2 and Al-Zour North 3 IWPPS into one project.

In July 2018, KAPP restarted the procurement process for its next planned IWPP projects, inviting developers to submit expression of interest (EOI) for both the Al-Zour North 2&3 and Al-Khiran 1 IWPP schemes.

In December 2018, the client invited consultants to submit proposals for the advisory roles on the Al-Zour North project. KAPP received proposals from three consortiums for the advisory roles on the planned project in April 2019. However, in October 2019 the advisory tender was cancelled.

Developers will hope that the financial closure of the Umm al-Hayman project will lead to progress with the projects. In late July, KAPP received advisory proposals for the planned Al-Zour North phase 2&3 and Al-Khiran IWPP projects.