Aguas de Skikda SpA

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Aguas de Skikda SpA (ADS) was awarded a 25 year build-own-operate (BOO) contract by the Government of Algeria to develop a seawater desalination plant in Skikda, in north east Algeria. The plant was expected to supply 100,000 cubic meters per day (1.16 cubic meters per second) of potable water to approximately 500,000 people in Skikda. This project was part of the Government of Algeria’s effort to encourage private sector participation in the development of large scale desalination plants to alleviate the country’s water shortage. The Ministry of Water Resources planned to develop 28 desalination plants (combined capacity of 1,950,000 cubic meters per day) with private sector participation. ADS was a joint venture between the state-owned Algerian Energy Company (AEC) (49%) and Geida Consortium (51%) of Spain. Geida Consortium won the rights to participate in the joint venture by bidding the lowest price (US$0.74 per cubic meter of water desalinated) in an international competitive tender conducted by AEC in April 2004. Geida consortium was composed of four Spanish companies - Abengoa’s Befesa and Codesa, AbenCobra-Tedagua of ACS group, and Sadyt of Sacyr Vallehermoso. Each of these companies held 25% of Geida’s capital. The total cost of the Skikda desalination plant was estimated at US$110 million. The project reached financial closure in July 2005, with a debt equity ratio of 70:30. The project was financed by local Algerian banks Banque Nationale d’Algérie (BNA) and Credit Populaire d’Algerie (CPA). ADS signed a 25 year take or pay water purchase agreement (WPA) with Algerienne des Eaux (ADE), the national water service authority of Algeria. The WPA was guaranteed by the state owned energy company, Sonatrach. Construction of the desalination plant began in September, 2005, and was expected to be completed in 24 months. Contract termination year 2032 includes 2 year construction period