Water is one of the most valuable resources on the planet – essential for human health, food production, social and economic development and more. However, fresh water is also finite, and factors such as a growing global population, increasing urbanization and pollution are placing strain on its availability. This is particularly true in more arid regions like the Middle East.
To meet the growing demand in water, a new approach to wastewater management is needed. Rather than discarding it, wastewater can instead be collected, treated and re-used, unlocking great potential not just as an alternative water source, but also as a source of energy and nutrients as well as a means of protecting ecosystems.
It was with this in mind that Siemens Financial Services through Siemens Bank, alongside a group of international and local lenders, provided financing for three wastewater treatment plants in Saudi Arabia: Madinah 3, Buraydah 2 and Tabuk 2. The treated water from these three plants will replace the use of fresh water resources for farming, saving this scarce resource and contributing directly to Saudi Arabia’s water security.
All three plants were planned with the projected residential growth of their respective regions in mind. For example, the largest plant, Madinah 3, will have an initial treatment capacity of 200,000 cubic meters a day, with the potential to expand to 375,000 cubic meters day, and will serve up to 1.5 million people. It is expected to save 190,000 cubic meters of water every day. Roughly 95% of the wastewater treated at these plants will be made available for agricultural use, with 5% being used at the treatment facilities themselves and a small amount being lost during the sludge drying process.
At an early stage in the development of these projects, SFS was one of a small number of lenders approached by lead sponsor Acciona – a Siemens key account that has a strong track record with SFS. SFS offered to support the Acciona consortium with significant amounts during the financing and bidding process, in order to demonstrate to the procurer that the bidder was able to arrange the financing.
With the financial close of these three projects at the same time, in less than six months, ACCIONA takes a further step in its commitment to sustainability and innovation. With its constant support and cooperation during the whole process, Siemens Bank has not only added the anticipated value to the projects,but has been a key element in this great achievement.Laura Andres Marruedo, Structured Finance, Acciona Agua
During the documentation phase of the projects, technical and environmental aspects were analyzed in detail at all stages from design to implementation, and it was possible to comply with the very ambitious timing schedules set by the procurer during the credit and documentation phase, which did not leave any room for maneuver.
The transactions for these three projects are important to Siemens Financial Services’ strategic imperative of diversification and are within Siemens’ and SFS’s key markets in the Middle East and water sector. They clearly demonstrate Siemens Bank’s role of lead structuring mandated lead arranger, enabling real and transformative sales results for Siemens and Siemens Energy.
The facilities that these loans finance will make a significant contribution to Saudi Arabia’s efforts to conserve and reuse water in line with its Vision 2030. This blueprint for sustainable development and economic diversification places a particular focus on optimizing the use of renewable water resources for agriculture purposes, as well as improving the efficiency of municipal and agricultural water consumption. Because of this direct contribution to sustainability, the loans have been classified as green in accordance with the Green Loan Principles 2021 of the Loan Market Association, the Asia Pacific Loan Market Association, and the Loan Syndications & Trading Associations, as well as S&P Global Ratings.
Financing is playing a vital role in enabling capital-intensive water projects. Siemens Financial Services has successfully closed the financing of three key water projects in KSA with ACCIONA. Siemens Bank is a trusted financing partner to Siemens Middle East key customers. We always count on SFS’s future support when we reach the final negotiation stage with ACCIONA. We look forward to further supporting sustainable infrastructure projects in the region.Mohammed Khalifa, Head of LC AE Digital Industry, Siemens Middle East