Financing Complete for Nation's Largest Desalination Facility
Carlsbad Desalination Project Raises $734 Million in Financing
Financing for the Carlsbad Seawater Desalination Project has closed with $734 million in tax-free bond financing, enabling the San Diego County Water Authority to move forward with developing the largest domestic seawater desalination facility and a connected 10-mile pipeline. The Water Authority made the announcement this Monday.
Early work on the project is expected to begin shortly, with final completion projected for some time in 2016.
From the Carlsbad Patch:
“This is a major milestone in the development of this historic project,” said Thomas V. Wornham, Chairman of the Water Authority’s Board of Directors, and a retired banker. “Closing the financing on an approximately $1 billion project is no small feat, and to do so just three-and-a-half weeks after the Water Purchase Agreement was approved required a monumental effort by all involved.”
Both Water Authority and the private developer involved, Poseidon Resources, sold bonds back on December 13 to fund the project at a 4.78 interest rate. In late November, the Water Authority’s board had signed off on a 30-year purchase deal with Poseidon, giving the go-ahead for a buy-up of 56,000 acre-feet of water per year.
Overall, cost of water generated from the desalination project should be lowered by about $125 per acre-foot, meaning price of water from the plant will come down to somewhere between $1,917 and $2,165 per acre-foot.
By 2016, the facility will be producing around 50 million gallons daily, with 7 percent of the local region’s demand being met by the Carlsbad plant alone by 2020.
The facility and pipeline will be developed jointly by Kiewit Infrastructure West Co. and J. F. Shea Construction. The water treatment system design comes from Israel’s IDE Technologies. The pipeline will connect the plant to the Water Authority’s aqueduct, located in San Marcos.