UDC Venture in $377m Kuwait Sewage Plant Loan
The borrowing firm, Utilities Development Company (UDC), told Reuters on Sunday the 114.25 million dinar, 25-year loan will carry an interest of two percent above Kibor, the oil-rich state's interbank borrowing rate.
The loan deal is equally shared by Kuwait's largest Commercial Bank, National Bank of Kuwait, Bank of Kuwait and the Middle East and Commercial Bank, a senior UDC official told Reuters.
"The project is run at about (an) 85 to 15 debt-to-equity ratio. We plan to break ground on July 7 and complete it within 30 months," said the executive who asked not to be identified.
UDC, 75 percent owned by Kuwait's Kharafi Group, a family- owned empire which is one the largest in the Middle East, put forecast total revenue from the BOT over 27.5 years of operations at around $2.2 billion.
Ionics of the United States holds the remaining 25 percent of UDC. a fully-owned Ionics Italian subsidiary has the sub-contract to supply the ultra filtration reverse osmosis portion of the major project.
The Kharafi-led consortium last year won the tender for the Sulaibiya wastewater treatment and reclamation plant after a heated contest among some of the world's leading firms in the field for the first international BOT project in Kuwait.
The consortium will build the plant and operate it to produce potable quality treated water for non-potable use, a key project for Kuwait to eventually end the diversion of treated and raw sewage into the Persian Gulf waterway.
Some 2,300 tons of dead fish washed ashore in Kuwait last year in a month-long phenomenon which some experts partly blamed on the dumping of sewage into the sea, killing a four-year consumption of fish.
UDC said the new project, the largest wastewater reclamation plant in the world, will handle the some 375,000 cubic meters per day of sewage which currently ends up in the Persian Gulf.
A joint venture between Kharafi and an International Division of Germany's collapsed Philipp Holzman will build the actual plant while Kharafi and Britain's united utilities will operate it over the life of the project.
It is part of another 170 million-dinar project to build huge gravity tunnels below Kuwait city to deliver sewage from 60 percent of the 2.2 million population to the new plant.
Sewage from south Kuwait is treated in an existing plant.
Kharafi earlier won a separate deal worth 60 million dinars for a portion of the sewage gravity tunnels project while United Gulf Construction Co. secured a 40 million dinar phase.
Smaller feeder projects were also awarded, executives said.
The tunnels -- to reach a maximum depth of 35 meters (115 feet) with pipes as big as 3.5 meters (11.5 feet) in diameter -- are due for completion within 30 months, they added.