Qingdao, China

What is it?

A 25-year BOT contract to supply a 100,000m³/d seawater reverse osmosis project serving a municipality in Shandong Province, China.

Who is responsible?

Befesa is the developer, with Qingdao Soda Ash putting up 27% of the equity. A consortium of Agricultural Bank of China, China Exim Bank, China Construction Bank and China Merchants Bank put up an RMB880 million (€94.5 million) 18-year loan to fund 70% of the €135 million financing cost.

What makes it special?

• Qingdao is the first privately financed desalination facility in China where the debt was provided entirely by local banks.

• The deal was a trailblazer in an environment where project finance is still largely untested as a concept.

• Financial close was reached only three months after the mandate had been awarded - a testament to Befesa’s infectious enthusiasm and broad-based experience of risk allocation.