Taqa consortium wins bid to develop $408m reservoir project in Makkah

The project will help meet peak demand in Makkah and Madinah during the Hajj season

Pilgrims circle the Kaaba and pray at the Grand Mosque in Makkah. Reuters

A consortium made up of the Abu Dhabi National Energy Company, better known as Taqa, Vision Invest and the Gulf Investment Corporation (GIC) has won a bid to develop a Dh1.5 billion ($408 million) water reservoir project in Saudi Arabia’s Makkah region.

The companies will be responsible for building, owning and operating the Juranah Independent Strategic Water Reservoir Project (ISWR-1) for 30 years before transferring the ownership to the Saudi Water Partnership Company (SWPC), Taqa said in a statement on Tuesday.

The project will respond to emergency municipal water demand for all the kingdom's regions, while also handling peak demand in Makkah and Madinah during the Hajj season.

Taqa will be the lead member for the operations and maintenance activities through a standalone company, which will be co-owned by Vision Invest.

The Abu Dhabi-based utility will take a 35 per cent share in the project company and a 50 per cent stake in the operations and maintenance entity, it said.

Debt funding is expected to account for about 80 per cent of the total project cost.

“The project is the first of its kind in Saudi Arabia with the participation of the private sector,” said Khalid Al Qureshi, chief executive of SWPC.

It is expected to contribute to reduced levels of electricity consumption, as the project includes solar energy units, Mr Al Qureshi said.

Saudi Arabia, the Arab world’s largest economy, has allocated more than $80 billion for hundreds of projects to achieve the objectives of the National Water Strategy 2030.

The country, which has been looking to diversify away from oil exports, aims to restructure its water sector by making it more sustainable and efficient.

The water reservoir project aligns with Taqa's commitment to “sustainable development and innovation, and we look forward to delivering a robust and reliable water supply system for the community”, its group chief executive and managing director Jasim Thabet said.

In November, the company revised its growth targets to boost the size of its assets base as it committed Dh75 billion in infrastructure investments.

Taqa, which reported an almost 32 per cent jump in its third-quarter net profit, is aiming for 150 gigawatts of gross power generation by 2030 and plans a larger share of renewables within its portfolio by 2030.

“Winning the Juranah ISWR-1 project reinforces GIC’s role in supporting private sector participation in the development of the GCC economies,” said Meshary Al Judaimi, group head – principal investment at GIC.

“GIC is a leading investor in the infrastructure projects and intends to continue to play a major role in utilities projects in the GCC.”

Kuwait-based GIC, which is equally owned by the six-member states of the GCC, reported a net profit of $131 million in 2022.