Project Details

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Results Chart for Delivery Method and Financing

Delivery Method

DBFOM All Private Finance
# of Projects: 1
100% of the Results

Background informationProject Created: April 13, 2011

Project Name: Victorian Desalination Plant
Year in Operation:
Sector: Water & Waste
Subsector: Water
Status: Design / Construction
Type: New Facility
Description: The project is the largest seawater desalination plant currently being developed in Australia. It will supply 150 gigaliters of water per year to Melbourne, Geelong, Gippsland, and Western Port towns with the capacity to upgrade and expand to 200 GL in the future. The plant will use reverse osmosis technology. In 2009, the project was the world’s largest PPP project.
Delivery Method as described in the country where it's located: Public Private Partnership
Is the project still active: Yes
Comments: Design, Build, Finance, Operate, Maintain Contract with a 30-year term.

Project Locations

Address: LOT 21B Mouth Of Powlett Rd
City: Dalyston
State: Victoria
Country: Australia, Commonwealth of

Souces of Project Support (Non-monetary)

Checkbox Checked Land: The State has acquired all the necessary land grants, leases, and licenses to support the project. This includes the parcels of land necessary to support the plant, and licenses for the necessary project pipeline and power easements.
Checkbox Checked Access to Land: The State leases the project land to the concessionaire for the entire project term.
Checkbox Checked Revenue Stream (Cash Flow) Created Through Initial Commitment of Public Sponsor(s): The state will make monthly service payments to the concessionaire after Preliminary Commercial Acceptance is reached and then will ramp up as Commercial acceptance is reached. Payments will continue on through the 30-year O&M term. The state only pays for water it receives, up to the amount of water ordered by the State. The monthly service payments are made of two key elements: 1) a security element paid to the extent the plant delivers water that is ordered or is capable of delivery 150 G per year of desalinated water at the required quality, and 2) a usage payment related to the specific volume of water delivered to the State each month. The payments are contingent on performance standards—this provides an incentive for the concessionaire to remedy any poor performance issues or defects as soon as possible.
Checkbox Checked Environmental Clearance: The concessionaire must complete an Environment Effects Statement (EES) and obtain an Environmental Project Authority (EPA) approval before the plant can begin operations. The environmental objectives for the project included: minimizing the environmental impact of the project through design and risk management. Specifically, goals were set to minimize adverse impacts on the coastal and marine environment from construction activity, visual intrusion, noise and waste discharge and disposal. Additionally, energy efficiency was a priority—to optimize efficiency, 100% of the electricity used in operating the plant and associated facilities will be offset by the purchase of renewable energy credits.

Souces of Project Support (Monetary)

Checkbox Checked

From Private Capital Markets Directly to Producers as Debt: The PPP concessionaire has arranged for commercial debt to be provided by a large group of banks. The debt funding package included: 1) senior commercial debt in the form of nominal bank debt, 2) mezzanine debt in the form of nominal bank debt, and 3) state supported debt in the form of the State Syndication Guaranteed under which the State would act as a lender of last resort if the debt to be syndicated (slightly under half the senior debt) was not completely sold down. The syndication process is now complete and the guarantee was not called upon.

Checkbox Checked

From Producers as Equity: Equity for the project is sourced from both domestic and international equity providers. It is a mix of sponsor and third party equity investments.

Project Delivery & Finance Method

Project Delivery:
All Public Finance. Public Sponsor contracts for initial design, and separately contracts for initial construction. Public Owner operates and maintains the resulting facility.
Is there an independent checking engineer? Yes
Project Finance Method: All By Private Sponsor

Procurement Approach

Project Component
Qualifications
Based Selection
Request for
Qualifications
Request for
Proposals
Invitation
for Bids
Unsolicited
Proposals

Term for Key Components & Forms of Contract

Project Component
Years
Quarters
Combined Term: Initial Design, Construction, O&M Period
32
2
Forms
Description
Other
Custom, Lawyer developed agreement 

Project Value (If and As Known)

Date of Estimated Project Value: April 13, 2011
Project Value
Hard Cost
Hard & Soft Costs
Construction
$1-5 Billion US
(none)
Total
$2-10 Billion US
(none)

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