MIDDLE EAST DEALS
- From: Vol 5, Issue 10 (October 2004)
- Category: Need to know
- Region: Middle East
- Country: Algeria, Israel, Lebanon and Oman
- Related Companies: Bayerische Landesbank, Black & Veatch, BNP Paribas, EBD Group, Fortis, Gulf International Bank, KBC Bank NV, Mitsui & Co., Oman Arab Bank, Sogex Oman and Sumitomo
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The Beirut operation of EBD Group was awarded a $100 million contract by Sudan’s Ministry of Planning & Development to build three wastewater treatment plants and expand the existing sewerage network to serve the growing needs of the capital Khartoum. EBD will form a project company with the Sudanese government, with EBD taking a 60% share.
The Lebanese firm will also supply the technology for the new plants. The turnkey project will be carried out on a BOOT basis. The duration of the contract is 25 years. EBD recently completed the works of Phase 1 of the City of Port Sudan Desalination Project. The first phase included the inauguration of two large plants serving the south and east parts of the city.
The parties involved in Algeria’s Arzew IWPP are hoping that the project will reach financial close by the end of the year. Germany’s HypoVereinsbank (HVB) is thought to have joined the principal lenders’ group, which includes French export credit agency Coface. The developer consortium, known as Kahrama, also appears to be taking shape following Black & Veatch’s decision to scale back its involvement earlier this year (see GWI, May 2004, p13). GWI understands that several South African investors and a number of local banks are close to joining Kahrama. Oman’s Sogex, which is the O&M contractor for the project, is expected to take a 5% stake in the special purpose company. The other shareholder is the Algerian Energy Company (AEC). Black & Veatch’s role is somewhat unclear. It might still take a small stake in Kahrama but is more likely to be involved in the project in an advisory capacity.
Oman announced two new private water projects, at Barka and Sur (see story pp19-20). Barka will have a capacity of 450MW and 20MIGD while Sur will be a smaller 10- 15MIGD facility. The Barka project also involves the purchase of a brownfield power station at Rusail. Meanwhile, the Sohar IWPP continues to make good progress. Coordinating bookrunner BNP Paribas reports that retail syndication has successfully closed. Financial close of the $550 million deal is expected to take place at the end of the month. The final construction and term loan is $415 million. The financing also includes a $135 million equity bridge provided by BNP Paribas, Fortis Bank, Bayerische Landesbank, Gulf International Bank, KBC, Sumitomo-Mitsui Banking Corporation and Oman Arab Bank (see Tracker p28).
Israel’s desalination programme looks set to grind into action once more, with movement expected this month on the Ashdod, Hadera, Palmahim and Shomrat proposals, after finance-related delays (see p18). In a related development, the Mekorot National Water Company will hold another financing round on the capital market: the company plans to raise NIS1.5 billion (US$333.33 million) in a series of bond issues through the end of 2005. Mekorot posted an operating profit in 2003 of NIS316 million (US$70.2 million), 16% of sales; and NIS143 million (US$31.7 million) – 14% of sales – in the first half of 2004. Its net profit was NIS9.3 million (US$2.06 million) in the first half of 2004, compared with NIS25.5 million (US$5.66 million) in the corresponding period last year, and a net loss of NIS102 million ($22.66 million) for 2003 as a whole.