Tlemcen Hounaine Desalination Plant

active

In October 2005, the Algerian Energy Company (AEC) awarded the Geida consortium of Abengoa, ACS and Sacyr Vallehermoso a greenfield contract to build and operate a 200,000 cubic meters per day (cu m/day) desalination plant on the outskirts of the city of Oran for 25 years. The plant was part of a government effort to have 12 new desalination plants with a combined capacity of 2.2 million cu m per day by the year 2010. The Geida consortium won the tender and offered a tariff of US$0.76/cu meter to AEC. The Geida consortium was owned by Abengoa 33.3%, ACS 33.3% and Sacyr Vallehermoso 33.3%, but the project company was 49% owned by AEC. Therefore, the shares of the project company were as follows: AEC 49%, Abengoa 17%, ACS 17% and Sacyr 17%. Further information on bidding criteria or other bidders was not available. The project reached financial closure on December 30, 2007 after a project finance loan was arranged by Credit Populaire d’Algerie (CPA) for US $230 million. The loans were to have 3.75% interest over 17 years, including a two-year grace period, according to a statement issued by AEC’s chairman Amennallah Sari in 2005. Algerienne des Eaux and Sonatrach, shareholders of the Algerian Energy Company, were to be the off-takers of the water. Total investment commitments reached US $230. This figure was higher than initial investment estimates that were based on a plant capacity of 150,000 cu m/day. Missing bid criteria, although evidence indicates that it was based on the tariff.