Saudi Arabia’s Red Sea project raises $3.77bn green loan

Saudi Arabia’s Red Sea project raises $3.77bn green loan

29 Apr 2021

Saudi Arabia’s The Red Sea Development Company (TRSDC) has raised a AED14.2bn ($3.77bn) green loan from four Saudi banks for 16 new hotels at the development

Saudi Arabia’s The Red Sea Development Company (TRSDC) has raised a AED14.2bn ($3.77bn) green loan from four Saudi banks for 16 new hotels at the development.

The Red Sea project will contain a high-end tourism development, housing, commercial areas and leisure facilities. The development will be powered by 100 per cent renewable energy.

“It’s a green finance, which is the first of its kind in a Saudi riyal-denominated loan facility, so we’re very proud of that fact. It also helps the banks with their own ESG (environmental, social and governance) credentials,” John Pagano, TRSDC CEO John Pagano, told Reuters.

The 15-year term loan and revolving credit facility was signed with Banque Saudi Fransi, Saudi British Bank (SABB), Riyad Bank and Saudi National Bank (SNB).

The loan will finance the first phase of the development. The 16 hotels are due to be completed by the end of 2023. The first three hotels at the Red Sea project are due to open by the end of 2022, with the airport also due to start operating by then.

Energy & Utilities reported in November that a consortium led by Saudi Arabia’s Acwa Power has been awarded the public-private partnership (PPP) contract by TRSDC to develop the utilities and related infrastructure for the project.

 Acwa Power, in consortium with Energy China, submitted a best and final offer (BAFO) on 31 August along with the other bidding consortium, led by UAE’s Masdar and France’s Engie. Both groups had submitted original proposals on 10 May.

The PPP contract will include the provision of power and water production, sewage treatment and solid waste treatment. The Red Sea Development Company is owned by sovereign wealth vehicle Public Investment Fund (PIF), and the PIF will provide the guarantee for the 25-year offtake agreement.

Under the first phase of the Red Sea development, which is due to be commissioned in 2022, power generation capacity will be required to service a peak demand of 210MW. Power is planned to be generated for the first phase from photovoltaic (PV) solar and wind energy, with 1GWh of battery storage included.

The 1GWh is expected to allow the resort to remain completely off-grid and powered by renewables day and night.

Under the second phase, which is due to be commissioned by 2030, power generation capacity will be required to meet peak demand of 360MW. The client is planning for geothermal and concentrated solar power (CSP) to add additional capacity by 2030.

For water production, two seawater reverse osmosis (SWRO) plants will be developed with a capacity of 30,000 cubic metres a day (cm/d) under the first phase. The demand will be split between potable water, 21,000 cm/d, and irrigation top-up, 9,000 cm/d.

Under the second phase, an additional SWRO plant will be developed in addition to brine squeezer and chlor-alkali technologies to meet expected demand of up to 50,000 cm/d, split 39,000cm/d and 11,000cm/d between potable water and irrigation top-up respectively.

The selected developer will also be required to provide a sewage treatment plant (STP) with a capacity to treat up to 18,000 cm/d of sewage under the first phase of the project through a constructed wetlands scheme. The peak sewage flow of the development is expected to reach 34,000 cm/d by 2030.

For the waste treatment development, the PPP contract will cover collection, automatic recovery and waste-to-energy production for up to 30 tonnes per day (t/d) under the first day. This will rise to 55 t/d by 2030,

TRSDC was established in line with the kingdom’s Vision 2030 economic reform plan to diversify the country’s economy and increase the kingdom’s tourism sector.

Under the first phase development, TRSDC is planning to develop five islands, two inland sites and deliver 3,000 hotel keys to accommodate 300,000 visitors a year by 2022. By 2030, the client hopes to have developed 22 islands, six inland sites and have delivered 8,000 hotel rooms to service up to 1 million visitors a year.

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