Ionics Inc., recently announced that on Jan. 27, the board of directors of the Overseas Private Investment Corporation (OPIC) approved up to $200 million in financing for the company's 25-year build-own-operate (BOO) seawater desalination project in Algeria, subject to satisfactory completion of the final project and loan documents.
OPIC will provide the loan to Hamma Water Desalination SpA (HWD), a project company owned 70% by Ionics and 30% by the Algerian Energy Company (AEC). HWD will produce and sell water to Algerienne des Eaux (ADE), the national water service of Algeria, under a 25-year take-or-pay water supply contract that will be guaranteed by Sonatrach, the Algerian national energy company.
The limited-recourse debt from OPIC, in conjunction with equity from Ionics and AEC, will be used by HWD for the construction and commissioning of a reverse osmosis (RO) desalination plant near Algiers. The RO plant will produce 200,000 cubic meters per day of potable water to be supplied to the population of the capital city. Construction will take approximately two years. Ionics will design and supply the desalination system, and operate the facility over the 25-year water supply contract period. The HWD plant will be the first private RO potable water desalination facility in Algeria, the largest membrane desalination facility in Africa, and one of the largest in the world.
Commenting on the financing news, Edward Cichon, Ionics vice president, stated, "This loan approval by OPIC reaffirms Ionics' leadership position in membrane desalination, and is testimony to the strong desalination program being undertaken by our partner, AEC, and the Algerian government. Our employees are excited about this project and are proud to be part of the solution to bring a reliable supply of high quality drinking water to the citizens of Algeria."
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