Tenes Lilmiyah Desalination Plant

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In December 2008, the 25-year BOT Tenes Lilmiyah seawater 200,000 m3/day desalination plant project reached financial closure. The plant was to be located in the city of Tenes, on the Mediterranean coast some 200 km from Algiers. The project was awarded in April 2008 by the government of Algeria to a Special Purpose Company (SPC) composed by the private sponsor Befesa Agua (Abengoa's subsidiary) (51%) and by the State Owned Enterprise Algerian Energy Company (49%). The award followed a competitive bidding process between five tenders. Befesa Agua was selected for proposing the lowest tariff (US$0.5885/m3). The four other bidders proposed the following tariffs: US$0.6267/m3 (Hyflux), US$0.6649/m3 (Inima/aqualia), US$0.7586/m3 (Acciona Agua) and US$0.8118/m3 (GE Water/Orascom). Under the term of the agreement, the SPC (Befesa Agua/Algerian Energy Company) signed a 25-year "Take or Pay" water purchase and sale contract with Algérienne des eaux, the state-owned national water entity of Algeria and Sonatrach SPA, the national oil company of Algeria. In addition, the SPC awarded to Befesa Agua an EPC contract for the construction of the plant and a 25-year operation and management contract. Investment commitment for the construction of the plant represented US$231 million. Earnings from water sales over this period were expected to be more than US$50 million a year. The project was 80% debt financed by a syndicate of banks headed by Credit Populaire d’Algerie (State owned bank) and the other 20% through equity by the shareholders of the SPC: Befesa Agua and Algerian Energy Company.