Jan. 1 (Bloomberg) — Project financing has closed on a
Southern California desalination plant to construct the largest
U.S. facility to make drinking water from the sea, capable of
producing about 50 million gallons of potable water a day.
Financing closed last week for the almost $1 billion
Poseidon desalination and pipeline project in Carlsbad,
California, that includes $734 million in tax-exempt bonds as
well as private equity from Stonepeak Infrastructure Partners,
meaning grading and initial construction may begin this month,
the San Diego County Water Authority said in a statement.
“Closing the financing on an approximately $1 billion
project is no small feat,” said Thomas Wornham, chairman of the
water authority’s board. “This is a major milestone in the
development of this historic project.”
Dickstein Shapiro LLP of Washington D.C. led the debt and
equity financing for the Poseidon project, which is structured
as a public-private partnership and included 60 parties and a
water purchase agreement. Bonds that sold last month at a 4.78
percent interest rate are helping fund the project.
Poseidon Resources Corp., based in Stamford, Connecticut,
is the only company in the U.S. developing large-scale seawater
desalination plants. With rising demand for fresh water sources,
the plant will be a key component of San Diego County water
supplies and pave the way “for future desalination projects in
California and beyond,” Poseidon Chief Executive Officer Carlos
Riva said in a statement.
The San Diego water agency says the average household bill
may rise about $6 a month when the desalination plant near Agua
Hedionda lagoon, which is energy-intensive making water filtered
from the sea, is completed in 2016.
The plant is expected to supply enough water using reverse-
osmosis technology for about 7 percent of the region.
IDE Technologies Ltd. of Israel will design the water-
treatment system and run the facility for Poseidon. The project
include 10 miles of pipeline to the water authority’s aqueduct
in San Marcos, with the plant located adjacent to the NRG Encina
power station.
A Kiewit Infrastructure West Co. and J.F. Shea Construction
venture will design and build the plant and pipeline.
To contact the reporter on this story:
Randall Hackley in London at
rhackley@bloomberg.net
To contact the editor responsible for this story:
Randall Hackley at
rhackley@bloomberg.net
