Press Releases
15 November 2005
KHAZANAH SIGNS PROJECT AGREEMENT IN RELATION TO THE SHUAIBAH PHASE 3 INDEPENDENT WATER AND POWER PROJECT IN THE KINGDOM OF SAUDI ARABIA
Khazanah Nasional Berhad (“Khazanah”) is pleased to announce that on 15 November 2005, Khazanah and its wholly owned subsidiary, Desaru Investments (Cayman Island) Limited (“Desaru”) as part of a Saudi-Malaysian consortium has signed the Power and Water Purchase Agreement and Land Lease Agreement relating to Shuaibah Phase 3 Independent Water and Power Project (“the Project”) with The Kingdom of Saudi Arabia’s Water and Electricity Company LLC (“WEC”) and Saline Water Conversion Corporation (“SWCC”) respectively.
The consortium, the Saudi-Malaysia Water & Electricity Company Limited (“SAMAWEC”) is jointly owned by a consortium of Malaysian and Saudi companies respectively, with both holding 50% of the equity. The ownership of the Malaysian consortium in turn consists of Khazanah and Malakoff Berhad which holds a 40% stake respectively, while Tenaga Nasional Berhad owns the remaining 20%. SAMAWEC will hold 60% interest in the Project Company with the balance 40% interest in the Project Company to be held by Government of Saudi Arabia related entities. Tenaga Nasional is the technical investor for the project, as designated by the Saudi authorities.
Khazanah’s participation in this historic transaction marks its first direct investment by the state investment arm of Malaysia in Saudi Arabia and the Middle East, and reflects the strong links between the governments of the two countries. Khazanah’s Managing Director, Dato’ Azman Mokhtar says “Khazanah is pleased to be part of this landmark transaction, being the first ever privatisation of a water and power project in Saudi Arabia and views this project as being both highly strategic as well as financially attractive.”
Dato’ Azman further adds, “Khazanah views the Shuaibah 3 project as being a significant win-win transaction for both the consortium members and The Kingdom of Saudi Arabia as it reflects the efficiently managed bid process which resulted in a robust project economics and believes that it will serve as a working template for similar transactions in the future.”
