Hamma Water Desalination SpA

Active

Prospective

Hamma Water Desalination SpA (HWD) was awarded a 25 year build-own-operate (BOO) contract by the Government of Algeria to develop a seawater desalination plant near the capital city of Algiers. The plant was expected to supply 200,000 cubic meters per day (2.31 cubic meters per second) of potable water to Algiers. The contract 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 (Government of Algeria) planned to develop 28 desalination plants, with a combined capacity of 1,950,000 cubic meters per day, with private sector participation. HWD, a special purpose company, was a joint venture between the state owned Algerian Energy Company (AEC) (30%) and US-based Ionics Incorporated (70%). Ionics Incorporated won the rights to participate in the joint venture by bidding the lowest price (US$0.82 per cubic meter of water desalinated) in an international competitive tender conducted by AEC in October 2003. In November 2004, Ionics Inc. was acquired by General Electric Company (GE) and became GE Infrastructure, Water & Process Technologies. The desalination project, with an estimated cost of US$240 million, reached financial closure in June 2005. US government’s Overseas Private Investment Corporation (OPIC) gave US$200 million limited recourse loan to HWD. GE and AEC provided the remaining funds in the form of equity. HWD signed the 25 year take or pay water supply contract with Algerienne des Eaux (ADE), the national water service authority of Algeria. The water supply contract was guaranteed by Sonatrach, state-owned energy company. The project began construction in July 2005 and was expected to be completed in 24 months. Contract Termination is 2032 since the wpa contract begins once the plant is commisioned in 2 years.

Water and sewerage

Algeria

High

World Bank Group

Project

Commercial, Water Supply and Storage, Government, Power Generation (CCGT), Waste Processing and Treatment