1st August 2005. Spanish groups Abengoa, ACS and Sacyr signed a contract with the Banque Nationalle d’Algérie (BNA) in Algiers yesterday Sunday for the financing of the project to execute the first of the two seawater desalination plants to be built and operated in Algeria. When finished, they will be the largest desalination facilities in Algeria, with a reverse osmosis based production capacity among the highest in the world

110 million dollars are to be invested in the building of the Skikda plant in the city of the same name in the east of the country near the border with Tunisia. This is the first “project finance” to be carried out in Algeria with a local bank. Construction work will finish in the fourth quarter of 2007.

The GEIDA Consortium made up of the Abengoa subsidiaries Befesa and Codesa, together with Cobra-Tedagua, belonging to ACS and Sadyt, from Sacyr-Vallehermoso, was awarded the contract to build and operate the Skikda plant as a 25 year concession in April 2004. The desalination facility will employ the reverse osmosis system to produce 100,000 cubic metres of drinking water per day, and will supply a population of 500,000.

A month later, in May 2004, the same consortium, in which each of the constituent companies holds a 25 per cent stake, was awarded the contract to build and operate another desalination plant in Oran. The financing process for this second plant, which will have a production capacity of 150,000 cubic metres of drinking water per day and will supply water for 750,000 people, is already under way. Expansión Exterior, a company in which both ICEX and BBVA are shareholders, is acting as GEIDA’s financial consultant in both operations.

Between them, the two desalination plants represent an investment of 280 million dollars, and when they become operational the Spanish consortium will have an installed capacity in Algeria to produce 250,000 cubic metres per day, providing drinking water for a population of 1,250,000.

The Skikda plant is expected to earn over 540 million dollars in water sales during its 25 year operational life, while the Oran plant is expected to make around 800 million dollars. The Algerian Goverment has developed an ambitious desalación plan in order to relieve the water lack in the country. Its aim in the short term is to reach to the million cubic meters of drinking water water a day.