Saudi Arabia and France sign cooperation MoU in the field of energy

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

It was a watershed second for the consortium of Saudi corporations Tawzea, Tamasuk, and Spanish agency Acciona after 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 mission a primary beneficiary of inexperienced financing was its dedication to the sustainability targets 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.

Saudi Arabia is making headlines by taking measures to make sure a clean transition to inexperienced vitality and combat local weather change. The Kingdom will host the forty fourth Worldwide Affiliation for Power Economics Worldwide Convention from Feb. 4-9 to debate the trail for a sustainable future.

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

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

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

The handled water will exchange 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 remedy capability of 200,000 m³ per day, which will be expanded to 375,000 m³ per day.

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

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

“We’ve a zero-sludge-dispatch coverage, that means that each one the sludge that we produce in these wastewater remedy vegetation is both utilized by farmers to exchange different fertilizers or despatched to cement factories for the manufacturing of cement,” mentioned 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 may partially cowl their each day vitality consumption.

The green-certified mission drew the eye of the bigwigs of the finance world, reminiscent of 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 accordance with the World Financial institution, a inexperienced mortgage is a type of financing that permits debtors to make use of the proceeds to completely fund initiatives 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 comply with completely different however constant rules: The Inexperienced Mortgage Ideas and the Inexperienced Bond Ideas of the Worldwide Capital Market Affiliation.

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

Saudi Arabia, notably, has been going through extreme challenges as a result of 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 state of affairs.

In accordance with figures printed by the Minister of Surroundings, Water and Agriculture, between 1985 and 2020, the water stage 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 you can be environment friendly and contribute to the water technique, achieve advantages as per their sustainability roadmap and accommodate the surroundings, social and governance of their methods,” mentioned Mohammed Al Halawani, CEO of Tawzea.

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

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

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

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

“Over 210,000 sq. m of bushes shall be launched as a part of the mission with the help of the Saudi Inexperienced Initiative, which is equal to roughly sequestering 136 tons of carbon dioxide per 12 months,” mentioned 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 Challenge.

The corporate was launched by Saudi utility developer ACWA Energy and Water & Electrical energy Holding Co., often known as Badeel, each owned partially or complete by the Public Funding Fund.

The mission goals to exchange a thermal desalination plant, the Shuaibah 3 IWPP, powered by fossil fuels. Using reverse osmosis expertise makes the proposed plant extra vitality environment friendly than the earlier thermal desalination plant that may come offline.

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

In accordance 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 number of initiatives worldwide, and for the primary time, extra money was raised within the debt markets in 2022 for climate-friendly initiatives than fossil-fuel corporations.

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

Whereas it could not point out that inexperienced financing is lastly having an higher hand on oil lenders, the well-trodden bazaars of fossil gas funding have turn out to be eerily chilly after the worldwide pushback on loss and harm throughout the UN Local weather Change Convention in Egypt final 12 months.

Saudi Arabia, on its half, lives by the age-old adage: You by no means miss the water until the nicely 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 biggest in a calendar 12 months within the firm’s historical past.

This achievement brings the corporate’s whole water capability beneath administration to six.4 million m³ throughout 16 initiatives 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