SWPC Achieves Financial Close for Makkah Water Reservoir

Saudi Water Partnership Company (SWPC) has achieved financial close for the Juranah Independent Strategic Water Reservoir (ISWR) project in Makkah, a landmark development that will add 2 million cubic meters of strategic storage and 500,000 cubic meters of operational tank capacity to the kingdom’s water infrastructure. Announced via the Saudi Press Agency on May 27, 2024, the project marks the first ISWR in Saudi Arabia to involve private sector participation, a step aligned with the National Water Strategy and Vision 2030’s economic diversification goals.

Context and Background

The Juranah ISWR is part of a broader public-private partnership (PPP) initiative led by the Ministry of Environment, Water and Agriculture. It follows successful independent water projects, transmission pipelines, and wastewater treatment facilities, reflecting a sustained commitment to modernize water utilities and attract private investment. With Makkah’s status as a global pilgrimage hub, ensuring reliable water storage is critical for residents and the millions of visitors who arrive for Hajj and Umrah each year.

The project is structured under the Build, Own, Operate, and Transfer (BOOT) model, with commercial operations slated to begin in the first quarter of 2027. This approach transfers long-term operational responsibilities to the private sector while guaranteeing performance and efficiency, a proven framework that has been successful in other Saudi utility sectors.

Key Details

SWPC CEO Eng. Khaled Al-Qureshi highlighted that the concession will span 30 years and attract direct private investment of SAR 1.5 billion (approximately US$400 million). “The project guarantees 100% stored water availability, reducing operational costs, and enhancing local content by increasing the localization of business and human resources,” he said. The winning consortium comprises Vision International Investment Company, Gulf Investment Corporation, and Taqa Company, each bringing specialized expertise in infrastructure and utilities.

The Juranah ISWR is designed to significantly enhance the water supply chain in Makkah, providing a strategic buffer that ensures uninterrupted supply during peak demand periods, particularly the Hajj season. The 2 million cubic meter capacity represents a substantial addition to the region’s water security, while the operational tank ensures efficient distribution.

Implications and Impact

The project’s financial close signals strong investor confidence in Saudi Arabia’s water sector and its regulatory environment. By leveraging private capital and expertise, the kingdom is optimizing public resources while improving service quality. The involvement of regional and international companies also positions Saudi Arabia as a hub for infrastructure investment, supporting the development of local supply chains and job creation.

For Makkah’s residents and pilgrims, the reservoir will provide greater resilience against supply disruptions and support the city’s growing population and tourism numbers. The project aligns with the broader goals of the National Water Strategy, which aims to ensure sustainable water resources, improve efficiency, and achieve integrated water management across the kingdom.

Vision 2030 Alignment

This milestone is a testament to Saudi Arabia’s commitment to Vision 2030, which emphasizes the role of the private sector in diversifying the economy and enhancing public services. By attracting SAR 1.5 billion in private investment, the Juranah ISWR demonstrates the effectiveness of PPP models in delivering strategic infrastructure. The project also contributes to the Quality of Life Program, a key Vision 2030 pillar, by ensuring reliable essential services for citizens and visitors. As the kingdom continues to expand its water infrastructure, this project sets a precedent for future collaborations, reinforcing Saudi Arabia’s leadership in sustainable development and regional integration.

20 Questions

Q1. What is the Juranah ISWR project?

A1. The Juranah Independent Strategic Water Reservoir is a major infrastructure project in Makkah, Saudi Arabia, designed to store 2 million cubic meters of water strategically and an additional 500,000 cubic meters for operational distribution, ensuring a reliable water supply for the region.

Q2. Who announced the financial close?

A2. The Saudi Water Partnership Company (SWPC) announced the financial close on May 27, 2024, through the Saudi Press Agency, marking the completion of funding arrangements and the formal commencement of project implementation.

Q3. What is the total storage capacity of the project?

A3. The project will have a strategic storage capacity of 2,000,000 cubic meters and an operational tank capacity of 500,000 cubic meters, combining to provide a robust buffer for Makkah’s water supply system.

Q4. How much private investment is involved?

A4. The private sector will invest SAR 1.5 billion (approximately US$400 million) directly into the project, reflecting strong investor confidence in Saudi Arabia’s water infrastructure and its regulatory framework.

Q5. What is the BOOT model?

A5. BOOT stands for Build, Own, Operate, and Transfer, a project delivery model where the private sector builds and operates the facility for a set period, typically transferring ownership to the government at the end of the concession.

Q6. When will commercial operations begin?

A6. Commercial operations for the Juranah ISWR are scheduled to commence in the first quarter of 2027, following the construction and commissioning phases, as announced by SWPC.

Q7. Who are the consortium members?

A7. The consortium awarded the project includes Vision International Investment Company, Gulf Investment Corporation, and Taqa Company, each bringing specialized expertise in infrastructure, utilities, and investment management.

Q8. What is the duration of the concession?

A8. The concession period for the Juranah ISWR will span 30 years, during which the private consortium will operate and maintain the facility, ensuring its performance and reliability.

Q9. How will this project benefit Makkah’s residents?

A9. The reservoir will significantly enhance the water supply chain, providing a strategic reserve that reduces the risk of shortages, particularly during peak demand periods and emergencies, thereby improving the quality of life for residents.

Q10. What is the significance of private sector participation?

A10. This is the first ISWR in Saudi Arabia to involve private sector participation, marking a milestone in the kingdom’s efforts to leverage private capital and expertise for public infrastructure, in line with the National Water Strategy.

Q11. How does the project support Hajj and Umrah pilgrims?

A11. The reservoir ensures a reliable water supply for the millions of pilgrims who visit Makkah each year, helping to maintain essential services and reduce the risk of water shortages during peak religious seasons.

Q12. What is the role of the Ministry of Environment, Water and Agriculture?

A12. The ministry oversees the public-private partnership initiative in the water sector, providing strategic direction and regulatory oversight for projects like the Juranah ISWR, ensuring alignment with national water policies.

Q13. How does this project align with Vision 2030?

A13. The project supports Vision 2030 by promoting private sector involvement, diversifying the economy, improving infrastructure, and enhancing the quality of life for citizens and visitors, all key goals of the national transformation plan.

Q14. What is the National Water Strategy?

A14. The National Water Strategy is a comprehensive plan by the Saudi government to ensure sustainable water resources, improve efficiency, and achieve integrated water management across the kingdom, supporting environmental and economic sustainability.

Q15. What are the expected operational benefits?

A15. The project guarantees 100% stored water availability, reduces operational costs through efficient management, and enhances local content by increasing the localization of business and human resources, as stated by SWPC CEO Eng. Khaled Al-Qureshi.

Q16. How will local content be enhanced?

A16. The project will increase local content by prioritizing Saudi businesses and workforce in construction and operation, thereby creating jobs, developing skills, and stimulating economic growth in the region.

Q17. What previous projects have been executed under this PPP initiative?

A17. The PPP initiative has successfully delivered independent water projects, independent water transmission pipelines, and wastewater treatment projects, setting a precedent for collaborative infrastructure development in the water sector.

Q18. What is the impact on water supply chain resilience?

A18. The strategic storage capacity will act as a buffer against supply disruptions, ensuring a continuous and reliable water supply even during emergencies or high demand, thereby increasing the overall resilience of the water network.

Q19. How does this project contribute to economic diversification?

A19. By attracting SAR 1.5 billion in private investment, the project demonstrates the viability of public-private partnerships, encouraging further investment in other sectors and supporting the broader economic diversification goals of Vision 2030.

Q20. What does the future hold for Saudi Arabia’s water infrastructure?

A20. The success of the Juranah ISWR sets a precedent for future water projects, likely leading to more PPP initiatives, increased private sector participation, and the adoption of advanced technologies to meet growing water demands sustainably.

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