Santa Paula Water Recycling Plant

What is it? A 12,870m3/d water recycling facility in California, funded by the private sector.

Who is responsible? The City of Santa Paula is the client. Pacific Environmental Resources Corp. (PERC) is the operations contractor. Private equity firm Alinda Capital Partners is the financial partner. Koch Membrane Systems supplied the membrane bioreactor (MBR) system.

Why is it shortlisted?

• The decision by the Californian city of Santa Paula to bring in private sector funding to support its new water reclamation plant shows a bold new direction in the financing of US water infrastructure.

• The collapse of the municipal bond market in 2008 made it difficult for US municipalities to raise money. The elegant solution put forward by the PERC/Alinda consortium beat off a cheaper offer from a rival bidder which involved tax-exempt finance. The higher cost is balanced by a lower risk profile for the municipality, as the construction and operational risk is borne by the private sector.

• With US municipalities scrambling to cover budget gaps in the light of declining tax revenues, bringing in private sector funding is suddenly looking like a very attractive option. The Santa Paula deal is a ground-breaking transaction which can be emulated across the United States.