2. CONTENTS INTRODUCTION WATER AND POWER DEMAND CHALLENGES WHY PRIVATIZE?
PRIVATIZATION IMPLEMENTATION
SALIENT FEATURES OF RESOLUTION 5/23
PRIVATIZATION
DETAILS OF WEC IWPPs
PROJECT CONTRACTUAL RELATIONSHIPS
PRE-QUALIFIED COMPANIES/CONSORTIUMS FOR SHOAIBA (PHASE 3) IWPP
OPPORTUNITIES
CONCLUSION

3. Domestic Water Resources
INTRODUCTION
Domestic Water Resources
50%
Desalinated Water
50%
Ground Water

4. INTRODUCTION
There is a long history of emphasis on water production by the Government culminating in the establishment of Saline Water Conversion Corporation (SWCC) in 1974.
Today, SWCC produces around 20% of total world production of desalinated water.

5. INTRODUCTION Water Production Increase In SWCC In Last 30 Years:
No. of present Plants
Kingdom : 30 plants at 15 locations
West Coast : 24 plants at 12 locations
East Coast : 6 plants at 3 locations
Water Production Capacity Growth
Year : ,000 m3/d
Year : 3,353,068 m3/d
SWCC also has major water transmission systems (some 3000 km pipelines in length including large pumping stations) and water storage tanks (capacity almost 9 million m3).

6. Desalinated Water Production Since 1968
INTRODUCTION
Desalinated Water Production Since 1968
Millions
3,353,068
Water Capacity (m3/day)

7. WATER AND POWER DEMAND
The phenomenal growth in water and electricity demands is shown below for the year 2003 and year 2024.
Year 2003
Population : 23.4 millions
(increase of 3% on year 2002)
Water : 6 millions m3/day
(demand increasing by 3% annually, 50% being met by desalinated water)
Power : 29,000 MW
(demand increasing by 4% annually)

8. WATER AND POWER DEMAND Year 2024 Population : 40 millions
Water Demand : 10 millions m3/day
(66% to be met by desalinated water)
Power Demand : 59,000 MW

9. WATER AND POWER DEMAND POPULATION
Millions
40 Millions

10. WATER AND POWER DEMAND POWER
Thousand MWs

11. WATER AND POWER DEMAND WATER DEMAND (250 L/P/DAY)

12. WATER AND POWER DEMAND DESAL WATER (250 L/DAY/Person)
Desal Water demand & de-commissioning of existing plants

13. CHALLENGES Increasing Water demand
(By year 2024, total water demand would be
10 million m3/day with a desalination water share of 6.6 million m3/day)
De-commissioning of existing plants in near future
Huge investment requirement
(Saudi Riyal 23,000 million at the initial stage)

14. WHY PRIVATIZE?
Phenomenal water and power demands entail massive investment – a burden on Governmental resources.
Low water and electricity tariff
Stimulate private sector investment and its effective participation in national economy
Expanding the citizens scope of participation in productive assets

15. WHY PRIVATIZE?
Encourage national and foreign capital investment in the Kingdom
Increase job opportunities
To make available the Governmental
re-sources to other services
(health, education, …..)

16. PRIVATIZATION IMPLEMENTATION
The Kingdom has initiated several steps to make investment attractive and a reasonable return for private sector.
There is tremendous opportunity for private sector to participate in the IWPP Projects .
Private investor is assured of Total commitment by the Government and a fair, credible environment.
Enabling rules and regulations have been formulated.

17. PRIVATIZATION IMPLEMENTATION
A separate Ministry of Water created in July 2001 (electricity sector incorporated later for it to become MWE)
MWE Responsibilities include
To establish guidelines for the private sector to invest in water & electricity infrastructure
To develop a general sector master plan
Formulation of enabling rules and regulations

18. PRIVATIZATION IMPLEMENTATION
All Saudi regional electricity companies integrated into a single entity – Saudi Electricity Company (SEC) in the year 2000
The supreme economic council identified 20 sectors for privatization, those include Desalination, Water Distribution, Railways, Airlines……
Establishment of Electricity & Co-generation Regulatory Authority (ECRA).

19. PRIVATIZATION IMPLEMENTATION
The Supreme Economic Council passed Resolution 5/23 to establish a frame work for participation of the private sector in water desalination and power projects.

20. Salient Features of Resolution 5/23
Four projects were initially selected and it contemplates additional projects.
Ownership in the project companies:
Government (PIF) %
Saudi Electricity Company (SEC) %
Developers %

21. Salient Features of Resolution 5/23
Actual distribution for the unit prices of water and electricity without any cross-subsidy
The projects to be implemented on a build, own and operate (BOO) basis
Utilize the Energy Conversion Agreement (ECA) model to provide fuel to the projects companies

22. Salient Features of Resolution 5/23
The Government will provide the offtaker company with the necessary credit support.
The state shall allocate the land sites for these projects.

23. WATER & ELECTRICITY CO. (WEC)
PRIVATIZATION
BRIEF DESCRIPTION OF
WATER & ELECTRICITY CO. (WEC)
WEC is a limited liability company owned on a 50:50 basis by SWCC and SEC.
Single Off taker of power and water capacity and output from the IWPPs.
Supply the Projects with the fuel requirements.
WEC will monitor power, quality of water and efficiency of fuel conversion.
WEC will sell the water to SWCC and power to SEC.

24. PRIVATIZATION Shoaiba Phase 3 Shuqaiq Phase 2 Raz Azzour
Under this initiative, the First Group of Four IWPP projects were selected:
Shoaiba Phase 3
Shuqaiq Phase 2
Raz Azzour
Jubail Phase 3
With an investment potential of about Saudi Riyals 23,000 millions

25. DETAILS OF WEC IWPPs LOCATIONS Shoaiba Raz Azzour Jubail Shuqaiq ° N W
MW 2500
800,000 m³/d
MW 1100
340,000 m³/d MW
880,000 m³/d
Shuqaiq
MW 700
212,000 m³/d

26. DETAILS OF WEC IWPPs 1. Shoaiba Phase 3 IWPP Water : 880,000 m³/day
Power : 650 – 900 MW
Fuel : Liquid Fuel (Crude Oil)
Estimated
Capital Cost : SR 6,000 Million
(total SR 23,000 Millions for 4 initial projects)
RFP Issued : 31-Jul-2004
Bid Submission : 08-Jan-2005

27. DETAILS OF WEC IWPPs Shuqaiq Phase 2 IWPP
Water : 212,000 m³/day
Power : 700 MW
Fuel : Liquid Fuel (Crude Oil)
Estimated
Capital Cost : SR 3,800 Million
(total SR 23,000 Millions for 4 initial projects)

28. DETAILS OF WEC IWPPs 3. Raz Azzour IWPP
Water : 800,000 m³/day
Power : 2,500 MW
Fuel : Natural Gas
Estimated
Capital Cost : SR 9,000 Million
(total SR 23,000 Millions for 4 initial projects)

29. DETAILS OF WEC IWPPs 4. Jubail Phase 3 IWPP Water : 340,000 m³/day
Power : 1,100 MW
Fuel : Natural Gas
Estimated
Capital Cost : SR 4,200 Million (total SR 23,000 Millions for 4 initial projects)

30. DETAILS OF WEC IWPPs IMPLEMENTATION PROGRAM
No.
Plant
Location
RFP Issue
1st Unit Production 1
Shoaiba
(Phase 3)
31-July-2004
1st Quarter 2008 2
Shuqaiq
(Phase 2)
1st Quarter 2005
3rd Quarter 2008 3
Raz Azzour
3rd Quarter 2005
4th Quarter 2008 4
Jubail
1st Quarter 2006
3rd Quarter 2009

31. PROJECT CONTRACTUAL RELATIONSHIPS
Government
MOF
SEC
SWCC
Aramco
Project
Company
WEC
Fuel (ECA)
EPC
Contractor
O&M
WPA
PPA
FSA
PWPA
Contract
LLA
Agreement
Credit Support
Shareholders’
Developers
60%
PIF
32% 8%

32. PRE-QUALIFIED COMPANIES/CONSORTIUMS FOR SHOAIBA (PHASE 3) IWPP

33. OPPORTUNITIES
There are unprecedented and enormous opportunities in water desalination (and power generation) fields for:
Developer
Financing / investment
Consulting
Design & Engineering
Construction including Civil Works

34. OPPORTUNITIES Operation and Maintenance Maintenance Services
Material & Equipment Supply

35. OPPORTUNITIES
We consider that there is a further unique and very significant incentive for the developers in these IWPPs. The developers are not bound by the precise and detailed Tender Specification of the client.
These IWPPs have performance based functional specification and the developer is free to adopt technological innovation / improvement (i.e. improvement in Performance Ratio, amalgamation of different technologies etc.)

36. OPPORTUNITIES
We believe that this approach offered to developers will yield substantial improvement in plant’s capital cost, performance and efficiency to yield very competitive prices.

37. OPPORTUNITIES
SWCC shall build water transmission systems with a total pipelines length of 1,560 km for transmission of the four IWPPs as follows:
Shoaiba – Jeddah, Makkah and Taif
Shuqaiq – Abha and Jizan
Raz Azzour – Riyadh
Jubail – Dammam
with an approximate total cost of 12.8 Billion Saudi Riyals

38. OPPORTUNITIES
SWCC has already tendered the water transmission system for Shoaiba Phase 3, on 15-Sep The bid submission date is 31-Jan This water transmission system consists of:
Interconnection between Shoaiba 2 and Shoaiba 3
Water transmission system to Jeddah
Water transmission system to Mina
2nd Water transmission system to Jeddah
Water transmission to Makkah and Taif

39. CONCLUSION
These 4 IWPPs will bring unprecedented opportunities for Developers, Financing / Investment, Construction / Civil Works and Supply of Equipment & Materials and Services.

40. CONTACT DETAILS Omar A. M. Al-Ghamdi
For further information please contact:
Omar A. M. Al-Ghamdi
President
Water & Electricity Co.
P.O. Box ,
Kingdom Center
Riyadh – , Saudi Arabia
Tel : / 63 Fax : ;
Website :

41. THANK YOU