Treated Sewage Effluent &Re-use

Contents
• Introduction.
• TSE Objectives & Strategy.
• TSE Study.
• Potential in Riyadh City.
• Signed Agreements & MoU.
 Introduction

• Definition of Treated Sewage Effluent (TSE)

¾ Treated Sewage Effluent (TSE) is treated wastewater and can be used for
irrigation and other non-potable uses

• Benefits of TSE reuse

¾ Helps meet the increasing demand for water.
¾ Reducing wastewater discharge in the receiving valleys thereby reducing
the pollution load to the environment.
¾ Protection of natural ground water resources (non-renewable water
resources).
¾ Generate additional revenue to NWC.
 NWC preferred Option of Sector
Unbundling
Water distribution and wastewater collection Wastewater treatment and Reuse

Management Contract Concession / BOO JVs for TSE

Reuse / Sales
Water
Treatment
Wells Agriculture
Plants Reservoirs Households
Existing Wastewater
Treatment Plants
District cooling

P Industries

Public Parks

Future WWTP based on Aquifer recharge

Pumping, Treatment and O & M Pumping ,Treatment, BOO basis
Transmission, Storage ,
Distribution and Sewage
Collection Non-potable use
 Objectives of TSE reuse
• Stand by its National Responsibility
• Commercially benefit from TSE
¾ TSE is widely reused globally for industrial,
agriculture, landscaping, public parks, district
cooling purposes
¾ At present in KSA, only around 18 % of the
treated sewage effluent is reused
¾ NWC target is to maximize reuse of TSE up to
100%
¾ To explore partnership options with Strategic
Stakeholders
 Wastewater Treatment Plants in Riyadh
and Jeddah Cities (Targeted to be privatized)
Design 
City Location Plant  Capacity Status
Phase‐1 100,000 In Operation
Al‐Kharj Road Phase‐2 100,000 In Operation
(Package – 1)
Phase‐3 200,000 Under Tendering Process
Riyadh
Phase‐1 400,000 Under Construction
Al‐Hayer     
(Package – 2) Phase‐2 400,000 Planned

Manfouah South C2 & C3 600,000 In Operation.

North & East To be expanded to 800,000 m3/day
Phase‐1 40,000 In Operation
Phase‐2 60,000 In Operation
Al‐Khumrah
Phase‐3 140,000 In Operation
Phase‐4 250,000 Under Construction
Jeddah
Package Plants 99,000 In Operation
Airport Phase‐1 250,000 Under Construction
Phase‐2 250,000 To be tendered / On BOO basis
Wastewater Treatment Plants in Makkah, Madinah
and Greater Dammam Cities

Design Capacity
City Location (M3/day) Status
Madinah 240,000 In Operation
Hadda 125,000 In Operation
Arana 250,000 In Operation
Makkah Hadda-2 125,000 Planned
Arana-2 250,000 Planned
Greater Dammam 193,000 In Operation
Dammam Al-Khobar 290,000 In Operation
Strategic Partners

• The cooperation of authorities like MOMRA,

ADA, MOA, MOWE, Industries, Agriculturists,
Farm owners, Large Housing compounds,
District cooling Companies, Golf course, etc.,
is an important aspect of the success of the
Initiative.
Business Case Study (1)

The Business Case Study consists of four sub-study

areas:
1. Technical Study
¾ assessment of availability of TSE
¾ elaboration of TSE conveyance system
¾ estimation of capital costs
¾ implementation plan and cost allocation over time
2. Customer Study
¾ future demand for TSE
¾ breakdown by customer group
 11

Business Case Study (2)

3. Financial Study
¾ elaboration of cost covering basis and Base Tariffs
¾ determination of tariff requirements
¾ assessment of future financial situation of Reuse Company and
financial projections
4. Commercial and Contractual Study
¾ relationship between Reuse Company and NWC
¾ relationship between Reuse Company and final customers
¾ risk allocation
¾ regulatory framework
 Project Locations
Dammam- Treated
Water and sludge Re- Riyadh-Treated
use water and sludge
Madinah-Treated Re-use
water and sludge Re-
use

Jeddah -Treated water

and sludge Re-use

Makkah-Treated water
and sludge Re-use
 Requirements for TSE in Various Sectors
Agriculture Environ- Residential Industrial Municipal Commercial
mental Areas* Sector Open Spaces* Sector
needs *

Farms Dry Household Industrial Parks/Garden Irrigation for

weather gardening process s various
flow in water, Regional consumers
No
Wadi irrigation (Golf
distinction City
Hanifa (and possibly courses;
between Istrahas Districts
district sports clubs;
productive Neighbour-
and cooling in riding
industry) hood stables; etc.)*
recreation
al farms Others
Playgrounds District
Roads cooling for
commercial
Separate calculation of buildings
demand * Demand calculated with ADA’s Geo-Database
Summary of Future TSE Requirements in Riyadh
City

Sector Short-term (2014) Long-term (2030)

Requirements (m3/d) Requirements
(m3/d)
Environment / Wadi Hanifa 200,000 200,000
Agriculture 600,000 600,000
Residential Sector 236,000 384,000
Municipal Parks & Gardens 98,000 247,000
Municipal Road Strips 75,000 137,000
Commercial Irrigation 239,000 252,000
Industry and District Cooling 169,000 339,000
TOTAL 1,617,000 2,159,000

Requirements exceed available TSE substantially

Which requirements will be transferred into demand and
be supplied by Reuse Joint Venture Company?
Total Requirements
• Total requirements substantially exceed available TSE
quantities

Total TSE vs Total requirements
3000

2500

2000
(1000) m /d
3

1500

1000

500

0
2012 2015 2020 2025 2030

Industry Commercial Other public

ADA (environmental needs) Municipality / open spaces Agriculture, existing
Residential Agriculture, expansion Available TSE, main scenario
Available TSE, low scenario Available TSE, high scenario
 Total Demand for TSE
Total demand for TSE in Riyadh City consists of the aggregation of
demand in the various sectors, taking into account restrictions for
the agricultural sector due to limited availability of TSE

1,600,000

1,400,000

1,200,000

1,000,000
m 3/d

800,000

600,000 Industry
Commercial sector
Other public sector
400,000
Municipality
ADA
200,000 Agriculture

0
2012 2015 2020 2025 2030
Year
Total TSE Quantities in Riyadh City

Total TSE / WWTP
2,000

1,800

1,600

1,400

1,200
(1000) m3/d

1,000

800

600

400

200

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Manfouha WWTP Year Al Hayer WWTP ‐ Phase 1

Al Hayer WWTP ‐ Phase 2
Al Kharj WWTP ‐ Phase 2
Banban WWTP ‐ Phase 2
Nazeem WWTP ‐ Phase 2
TSE Generation low scenario
Al Kharj WWTP ‐ Phase 1
Banban WWTP ‐ Phase 1
Nazeem WWTP ‐ Phase 1
TSE Generation, main scenario
TSE Generation high scenario
Recommended TSE Conveyance System
150

120
120

70
270 Storage

310
60 200
230
King Abdullah 200
Garden 20
+ Drainage 80
280 (50-100) 310
68
110 0

Current supply

New/future supply 680

New/future supply city (> 2020)
 Committed Customers

Various customers have been identifed in different cities

No. Customer Quantities (m3/day) Remarks
1 King Abdullah Fin. District 22,000 Agreement has been signed
2 ITCC 6,500 Agreement has been signed
3 Knowledge Economic City 110,000 Agreement has been signed
4 Khomrah RO Plant 30,000 Agreement has been signed
5 SEC PP-11 10,000 Agreement has been signed
6 Bareq Al-Madden 5,000 MoU has been Signed
7 Mowah 50,000 MoU has been Signed
8 Marafiq Taibah 5,000 MoU has been Signed
9 Madden 10,000 MoU has been Signed

Total 248,500
Interested Potential Customers

No. Customer Quantities (m3/day) Remarks

1 Al-Haram Expansion 30,000 Under Discussion
2 Saudi Aramco 20,000/60,000 Under Discussion
3 King Saud University 4,000 Under Discussion
4 Al-Rashed Paper Comp. 10,000 Under Discussion
5 Alobikan Group 8,000 Under Discussion
6 Industrial Gate 10,000 Under Discussion
7 Al-Bawaba Project 70,000 Under Discussion
8 Al-Shameah Project 70,000 Under Discussion
Total 262,000
 To capture the TSE opportunity, BUs will be
created initially paving the way for JV’s to be
formed
Phase 1: BU incubation
in Business Dev. Department
Treated ƒ TSE BUs formed under BDD
Sewage
ƒ TSE BUs operate as profit centers
Effluent
ƒ Initial TSE BU focus is on Riyadh
ƒ TSE BUs may potentially expand to
other cities in KSA
ƒ Depending on current capabilities, NWC
will provide selected shared services to
the BU
Phase 2:
JV spin-off
ƒ TSE BU will be spun off into JVs
ƒ JV will run entire business cycle from
receipt of raw sewage to the sale of TSE
(construction, financing, customer
management)
ƒ JV will purchase existing assets from NWC
ƒ JVs revenue stream will be generated from
final customers
ƒ JV will not obtain off-take guarantees
and/or Government guarantees
ƒ JV could be offered under an IPO or
similar scheme in the capital market after
showing financial sustainability
ƒ Depending on capabilities, NWC will
provide selected shared services to the JVs
 TSE model has evolved into an improved “combined
case” where building & selling are done by a single entity
From… …To
Standalone model Combined model

Government

Financial guarantee

Partner BOOT
Equity NWC Equity agreement
(dev- Partner
eloper)
WW supply
agreement NWC Equity
Partner

BOO TSE Sales Asset

contractor SPV WW supply sale
agreement

O&M
agreement
TSE BU/ JV
TSE
supply O&M
Off-take Agreement (sales) agreement
agreement for to supply contract TSE supply (sales)
100% of TSE contract
O&M production at equivalent to
guaranteed End O&M End
provider price
Sales
provider
customer customer

Source: NWC, A.T. Kearney analysis

 The “combined” model limits NWC risks while
providing the same benefits
Model evaluation
“Standalone” model “Combined” model
• NWC sets up and is a partner in a BOO
• NWC sets up a TSE BU in Riyadh (later
contractor to build/ refurbish, own and
spun off into a JV) that is charged with 2
operate WWTP(s), TSE pipelines in Riyadh
activities: selling TSE and building/
• BOO contractor commits to deliver certain
refurbishing WWTPs and TSE pipelines
requirements on Capex, refurbishment
• NWC “sells” WWTPs and TSE pipelines
• NWC commits to purchase over long period
Description (on a case-by-case basis) to TSE BU/ JV as
full capacity of TSE produced in WWTP(s)
part of a BOOT model
from BOO contractor at predetermined
• TSE BU/ JV contracts with end customers
price
to supply TSE at agreed prices
• NWC sets up a TSE Sales SPV for Riyadh
• TSE BU/ JV contracts with 3rd party
• NWC agrees to supply TSE SPV with TSE to
provider(s) to operate and maintain
cover quantity sold to end customers (up to
WWTP(s) and pipelines
the quantity produced)
• Burden of WWTP build and refurbishment
is shouldered by others
• Burden of WWTP build and refurbishment
• NWC receives revenue from sales of TSE
is shouldered partly by NWC
Benefits through its share in TSE BU/ JV
• NWC receives revenue from sales of TSE
• NWC does not carry volume, pricing or
through its share in TSE Sales SPV
quality risks
• Alignment between producer & distributor
• NWC carries risk of demand and supply
imbalance (unsold TSE/ volume risk)
• NWC carries pricing risk (spread between
• A bigger challenge towards arranging
Risks/ costs the buying and selling prices)
financing of the projects to the JV
• NWC carries TSE quality risk
• Government guarantees required
• No performance drivers for BOO contractor
Source: NWC, A.T. Kearney analysis
The Operating Model for TSE has
been
TSE developed
operating model and cash flows
Capital and funding
Capital and funding JV profit share NWC

TSE Revenue: Sale of assets(1)

JV profit share TSE
JV
JV(s)
Partner(s) Support Services fees

Sale of raw sewage

TSE Revenues
• International and / Fees
or local O&M and
EPC companies
• International and /
or local utilities National Water JV profit share
O&M
End customers Training Center
• Customers of JV(s)
TSE etc. JV
NWC is a partner in
BU/JV phase
NWTC
JV phase only

(1) Assets include WWTPs and/ or WW networks/ facilities; ownership will be transferred for a concession period to the TSE JV
 TSE BU aims to deliver produced treated
sewage effluent from WWTPs to end users
TSE value chain Description
ƒ Sewage is collected by the wastewater network to enter the treatment process

ƒ Treated Sewage Effluent (TSE) is the end product of the wastewater secondary
or tertiary treatment process in a Wastewater Treatment Plant (WWTP)
ƒ All or part of the produced TSE is pumped from the WWTP to pipelines specially
designated to transfer the fluid

ƒ Large transmission lines transport the fluid to storage facilities, tanks, lakes or
reservoirs for further distribution into consumption areas

ƒ TSE is then collected in large volumes and high rates in storage facilities, tanks,
lakes or reservoirs before being pumped out to the larger distribution network
ƒ TSE is distributed from the collection points to the end users through a distribution
network. The network can have sequential pumping stations (boosters)

ƒ Flow meters act as a gateway to monitor the flow of TSE to the end user and
measure individual consumption
ƒ End users consume TSE in a variety of industrial and commercial applications/
processes
ƒ Manage customer billing process
ƒ Resolve all complaints (e.g., billing, delivery and quality issues)
Wastewater Treatment Plants totalling 4.3m m3/day of
TSE - 1
City Location Plant  Design  Status
Capacity
Phase‐1 100,000 In Operation
Al‐Kharj Road Phase‐2 100,000 In Operation
(Package – 1)
Phase‐3 200,000 Under Tendering Process
Riyadh
Phase‐1 400,000 Under Construction
Al‐Hayer     
(Package – 2) Phase‐2 400,000 Planned

Manfouah South C2 & C3 600,000 In Operation.

North & East To be expanded to 800,000 m3/day
Subtotal 1,800,000
Phase‐1 40,000 In Operation
Phase‐2 60,000 In Operation
Al‐Khumrah
Phase‐3 140,000 In Operation
Phase‐4 250,000 Under Construction
Jeddah
Package Plants 99,000 In Operation
Airport Phase‐1 250,000 Under Construction
Phase‐2 250,000 To be tendered / On BOO basis
Subtotal 1,089,000
Wastewater Treatment Plants totalling 4.3m m3/day of TSE - 2

Design Capacity 
City Location (m3/day) Status 

Madinah 240,000 In Operation

Subtotal 240,000
Hadda 125,000 In Operation
Arana 250,000 In Operation
Makkah
Hadda‐2 125,000 Planned
Arana‐2 250,000 Planned
Subtotal 750,000
Greater Dammam  Dammam 193,000 In Operation
Al‐Khobar 290,000 In Operation
Subtotal 483,000
Total 4,362,000
 The setup and roll-out of NWC’s TSE Services
will undergo two main phases: incubation and
spin-off Dependent on JV
TSE BU rollout roadmap agreement

Phase 2: JV spin-off and

Phase 1: Organizational development and BU incubation
operational expansion

Identify and
qualify potential
JV Partners
Initiate TSE
infrastructure
development in rest
Determine of KSA
RfP and Tender
TSE business
process
model and
organization
Expand operations
of the TSE BUs to
Expand Riyadh rest of the KSA
Setup TSE BU infrastructure
(within BDD)

Negotiate JV(s) Negotiate / sign JV(s)

Continuously identify Rollout TSE BU shareholder and asset
new customers and in Riyadh transfer agreements
sign agreements with JV Partner(1)

09/2010 12/2010 06/2011 12/2011 06/2012 12/2012

BU = Business Unit; JV = Joint Venture 1) Negotiations of JV contracts may take 6-15 months
 29

Thank You
 30

Nasser Al-Aamry
naamry@nwc.com.sa
Tel: +966 1 4409511
Fax: +966 1 440 9595
Framework for Combined Structure

National Water TSE Sales Tariff

Company Raw
Sewage
Sewerage System Sewage
Services Company
House Connection TSE
STP Plants
TSE Customers
TSE Sales
Raw Sewage
Delivery Agmt. C
C
CC
Boundary of C
Combined Business
TWSA
Interface

Sewage Flows Payment Flows Contractual Relations

 TSE BU has already commenced acquiring TSE
contracts and is in the process of negotiating new
contracts
Signed TSE contracts As of Feb 2011
Period of 
CUSTOMER NAME City Qty in m3/day
Contract
1 Knowledge Economic city Madinah 110,000 20 YEARS
2 Al‐Khomrah RO plant Jeddah 30,000 20 YEARS
3 King Abdullah Financial District Riyadh 21,700 20 YEARS
4 SEC PP‐11 Riyadh 10,000 21 YEARS
5 ITCC Riyadh 5,500 20 YEARS
TOTAL 177,200

Signed TSE MOUs

Period of 
CUSTOMER NAME City Qty in m3/day
Contract
1 Mowah Riyadh 50,000 20 YEARS
2 SEC  Riyadh Plants Riyadh 30,000 20 YEARS
3 Saudi Tabreed (Makkah) Makkah 20,000 20 YEARS
4 Madden Taif 10,000 20 YEARS
5 Marafiq Tabreed Madinah 5,000 20 YEARS
6 Bareq Al‐Madden Madinah 5,000 20 YEARS
TOTAL 120,000

Source: NWC BDD department, TSE initiative