Bahrain’s first waste water PPP project | US$250m | ||
Synopsis: Bahrain’s ministry of finance has commissioned the design, construction, finance and operation of Bahrain’s first waste water treatment plant and conveyance system | |||
Firm | Client | Role | |
Norton Rose [lead lawyers: Jonathan Brufal, Joanne Emerson-Taqi] | Bahrain government/ HSBC | International counsel to issuer | |
Hassan Radhi & Associates | Bahrain government/ HSBC | Local counsel to issuer | |
Ashurst | Sponsors | Counsel to underwriters | |
Shearman & Sterling | Lenders | Counsel to lenders | |
Bahrain’s first-ever wastewater treatment plant – also one of the first wastewater PPP deals in the Gulf Cooperation Council (GCC) – heralds the start of the government’s drive to develop infrastructure in a number of sectors, using PPPs as the key procurement model.
“The project is well placed to provide a solid benchmark for future PPP procurement of wastewater plant and network projects in the region and represents future opportunity for private investors to see the benefits of long-term investment in Bahrain infrastructure,” said Norton Rose counsel Joamme Emerson-Taqi, who project managed the Norton Rose team.
The project which has now reached commercial close has a projected capital expenditure of US$250m and includes the operation for a plant for a 27 year period. Financial close is targeted for Q2 2011 and construction is due to complete in 2013.
Complex aspects of the transaction include environmental issues that required the project to have a certain level of ‘optionality’ during the concession term so as to fully enable future privatisation of the wastewater sector in Bahrain, Norton Rose lead partner and head of infrastructure Middle East Jonathan Brufal told ALB.
The project could also serve to change opinion on the PPP model. In most countries the Gulf region, the PP model has not enjoyed the regulatory support it has received elsewhere in the Asia Pacific.
Norton Rose, together with its consortium members HSBC (lead and financial adviser) and Fitchner technical adviser were selected through a competitive tender process.
“Bahrain is well placed to take advantage of the easing credit conditions in the region,” Brufal said.
Norton Rose has advised on every wastewater PPP deal in the Middle East. Recent PPP deals include the UAE and the Queen Alia Airport PPP project in Jordan, the Mafraq to Ghweifat PPP road project and the Bahrain Social Housing PPP project.
Other interesting work it has in the pipeline include the Tubli wastewater PPP project in Bahrain that the firm is currently working on with the same consortium for the government of Bahrain. Projects in other sectors include waste to energy, social housing and transport that also represent opportunities for implementation of the PPP model in the Middle East.
