Magtaa Desalination Plant

active

In March 2009, the 25-year BOT Magtaa seawater 500,000 m3/day desalination plant project reached financial closure. The project represented US$468 million investment commitment and was to be located close to Oran, on the Mediterranean coast. The project was awarded in July 2008 by the government of Algeria to Tahliyat Miyah Magtaaa, Special Purpose Company (SPC) composed by the private consortium MenaSpring Utility (47%) and by the State Owned Enterprise Algerian Energy Company (53%). MenaSpring Utility was a wholly owned subsidiary of Singaporean company Hyflux. The award followed a competitive bidding process between six tenders. Hyflux was selected for proposing the lowest tariff (US$0.5577/m3). The tariff was over US$0.07 lower than that offered by its nearest competitor. The five other bidders were Acciona Agua, Befesa/Sadyt/Somague, Inima/aqualia, GE Water/Orascom and Biwater/Toray/Arcofina. Under the term of the agreement, the SPC Tahliyat Miyah Magtaaa signed a 25-year water purchase agreement with Algérienne des Eaux, the state-owned national water entity of Algeria. In addition, the SPC awarded to Hyflux an EPC contract for the construction of the plant and a 25-year operation and management contract. The project was financed with a debt-equity split of 70:30, with Banque Nationale d’Algérie (BNA) providing 100% of the debt through a US$350 million loan bearing a fixed interest rate of 3.75%. The term of the loan was 17 years and four months, including a 28-month construction period. In September 2011, as a result of a recent fire that destroyed a warehouse as well as critical equipment and other supplies meant to be installed at the facility, the completion date for the project was delayed from August 2011 to May 2012. The warehouse that caught fire was sited a few hundred meters away from the construction site for the project and the cause of the incident was yet to be established. Hyflux estimated the damage and related costs at $50 million. Construction delayed (see entire description above) until May 2012. No evidence of 'operation' in 2012.