Green-certified utility projects on the rise in Saudi Arabia

RIYADH: When a consortium of water infrastructure firms closed inexperienced loans price $480 million for 3 unbiased sewage therapy vegetation in Saudi Arabia final March, it was a harbinger of the verdant alternative that awaited the Kingdom’s sustainable tasks.

It was a watershed second for the consortium of Saudi firms Tawzea, Tamasuk, and Spanish agency Acciona once they secured the quantity for 3 ISTPs — Madinah 3, Buraidah 2, and Tabuk 2 — in simply six months of expressing their curiosity.

What made the undertaking a chief beneficiary of inexperienced financing was its dedication to the sustainability objectives envisaged by the Saudi Imaginative and prescient 2030 and the endeavors of Saudi Water Partnership Co., the state-run firm which facilitates the commercialization of water and electrical energy within the Kingdom.

“The development and operation of the ISTPs will support in optimizing the usage of water assets in Saudi Arabia by offering handled and renewable water for use for agricultural functions, subsequently lowering the consumption of freshwater,” stated María Ortiz de Mendivil, major analyst, S&P World Rankings, in a second-party opinion be aware certifying the tasks as inexperienced.

As soon as accomplished, Madinah 3 will serve as much as 1.5 million inhabitants of current and future residential areas close to town of Madinah. It’ll have an preliminary therapy capability of 200,000 m³ per day, which could be expanded to 375,000 m³ per day.

Buraidah 2 will serve as much as 600,000 individuals and have a capability of 150,000 m³ per day. Tabuk 2, serving as much as 350,000 individuals, will facilitate 90,000 m³ per day.

The handled water will substitute freshwater assets for farming, saving this scarce useful resource and contributing on to the nation’s water safety. Every day water financial savings are anticipated to quantity to 190,000 m³ per day at Madinah 3, 142,500 at Buraidah 2, and 85,500 at Tabuk 2.


Madinah 3 could have an preliminary therapy capability of 200,000 m³ per day, which could be expanded to 375,000 m³ per day.

Buraidah 2 will serve as much as 600,000 individuals and have a capability of 150,000 m³ per day.

Tabuk 2, serving as much as 350,000 individuals, will facilitate 90,000 m³ per day.

“We now have a zero-sludge-dispatch coverage, which means that each one the sludge that we produce in these wastewater therapy vegetation is both utilized by farmers to switch different fertilizers or despatched to cement factories for the manufacturing of cement,” stated Julio De La Rosa, the Center East enterprise improvement director of Acciona Agua, whereas talking at an Worldwide Desalination Affiliation’s discussion board held two months in the past.

Moreover, the photovoltaic photo voltaic panels put in at every plant will generate renewable energy that can partially cowl their every day power consumption.

The green-certified undertaking drew the eye of the bigwigs of the finance world, corresponding to Abu Dhabi Islamic Financial institution, Mitsubishi UFJ Monetary Group, Alimna Financial institution, Riyad Financial institution, and Siemens Financial institution, which parked their investments at first blush.

Inexperienced loans for a greener planet

So, what precisely is a inexperienced mortgage? In line with the World Financial institution, a inexperienced mortgage is a type of financing that permits debtors to make use of the proceeds to solely fund tasks that make a considerable contribution to an environmental goal.

It’s just like a bond. The one distinction is {that a} mortgage is usually smaller than a bond and executed in personal operations. Additionally, inexperienced loans and inexperienced bonds observe totally different however constant rules: The Inexperienced Mortgage Rules and the Inexperienced Bond Rules of the Worldwide Capital Market Affiliation.

This inexperienced financing assumes significance as buyers worldwide are earmarking their funds into sustainable funding tasks that neutralize greenhouse gases and run on renewable power, making them enticing propositions in an environmentally aware world.

Saudi Arabia, notably, has been dealing with extreme challenges because of the unsustainable use of water assets, and it has restricted reserves of nonrenewable groundwater, that are depleting quickly. As well as, excessive water demand within the agriculture sector has additionally exacerbated the water shortage scenario.

In line with figures printed by the Minister of Surroundings, Water and Agriculture, between 1985 and 2020, the water degree within the Kingdom nearly dropped by 90 meters. That led to the Nationwide Water Technique, impressed by the Imaginative and prescient 2030 blueprint, which recognized levers and enablers to repair the issue.

“The Nationwide Water Technique reshaped the personal sector, which has began to consider how one can be environment friendly and contribute to the water technique, acquire advantages as per their sustainability roadmap and accommodate the atmosphere, social and governance of their methods,” stated Mohammed Al Halawani, CEO of Tawzea.

This public-private partnership has spawned many environment friendly unbiased water and energy tasks and desalination vegetation which can be quick changing into textbook case research for sustainable tasks worldwide.

A superb case research of the PPP is the Taif Unbiased Sewage Remedy Plant, which was developed by Cobra & Tawzea and had a therapy capability of 1,00,000 m³ per day.

It’s the first ISTP that reached industrial operation in Saudi Arabia from the personal sector underneath the build-operate-transfer mannequin.

The plant has lower than 0.35 kilowatt-hour per m³ electrical energy consumption. About 30 p.c of the electrical energy was recovered by biogas cogeneration. Even the residual output was 90 p.c dry solids and helpful class-A sludge.

“Over 210,000 sq. m of bushes will likely be launched as a part of the undertaking with the help of the Saudi Inexperienced Initiative, which is equal to roughly sequestering 136 tons of carbon dioxide per yr,” stated Al Halawani.

Sustainable to the core

One other instance is the Shuaibah 3 Water Desalination Co., a special-purpose automobile created to finance and develop the Shuaibah 3 Unbiased Water Venture.

The corporate was launched by Saudi utility developer ACWA Energy and Water & Electrical energy Holding Co., also referred to as Badeel, each owned partly or entire by the Public Funding Fund.

The undertaking goals to switch a thermal desalination plant, the Shuaibah 3 IWPP, powered by fossil fuels. Using reverse osmosis expertise makes the proposed plant extra power environment friendly than the earlier thermal desalination plant that can come offline.

The traditional thermal desalination course of, multi-stage flash distillation, and multiple-effect distillation produced practically 20 kg of carbon dioxide equal per m³. Nonetheless, the carbon footprint for the RO course of might be anyplace from 0.4 to six.7 kg of carbon dioxide equal per m³.

In line with ACWA Energy, this expertise shift may accrue financial savings of about 45 million tons of carbon dioxide yearly.

That’s not all. Inexperienced financing is greenlighting a bunch of tasks worldwide, and for the primary time, extra money was raised within the debt markets in 2022 for climate-friendly tasks than fossil-fuel firms.

In line with a Bloomberg report, roughly $580 billion was organized in 2022 for renewable power and different environmentally accountable ventures, whereas the oil, gasoline, and coal industries turned to lenders and underwriters for nearer to $530 billion. 

Whereas it might not point out that inexperienced financing is lastly having an higher hand on oil lenders, the well-trodden bazaars of fossil gasoline funding have turn into eerily chilly after the worldwide pushback on loss and injury through the UN Local weather Change Convention in Egypt final yr.

Saudi Arabia, on its half, lives by the age-old adage: You by no means miss the water until the properly runs dry. Whereas going to press, Saudi energy juggernaut ACWA Energy introduced that it added 2.4 million m³ day of water desalination capability throughout 4 reverse osmosis megaprojects in 2022, the most important in a calendar yr within the firm’s historical past.

This achievement brings the corporate’s complete water capability underneath administration to six.4 million m³ throughout 16 tasks in 4 international locations, producing water at lower than $0.50 per m³, which is as much as three-quarters decrease than the tariff of $2 per m³ just some years in the past.

Ergo, the message is loud and clear: The way forward for infrastructure financing is inexperienced, or there’s no future in any respect.

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By Samy