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SAUDI ARABIA - Green Economy

Rami Moussilli

CEO, Alkhorayef Water and Power Technologies

Bio

Rami Moussilli is an accomplished executive with over 24 years’ executive experience in leading major international companies and consortiums, achieving record performance and executing high-profile megaprojects in the US and Saudi Arabia, including airport expansions, infrastructure upgrade and rehabilitation programs, power generation projects, and privatized transportation and utility concession projects. joining AWPT in 2014, he has been instrumental in transforming the company into a successful, publicly listed company on Tadawul.

"AWPT is a unique lead developer in the kingdom with full spectrum O&M and EPC capabilities to fully manage and execute works in house. Such a competitive advantage further catalyzes AWPT's exponential growth in the water privatization sector to be a leading global developer in the future.”
Rami Moussilli, CEO of Alkhorayef Water and Power Technologies, talks to TBY about major milestones, recent financial performance, and medium-term objectives.

What are the recent major milestones achieved by the company?
The company achieved several major milestones in its journey of growth. First, Alkhorayef Water and Power Technologies (AWPT) was one of the top-performing public companies in the water sector worldwide for 2022, and the company witnessed its share price more than double in the span of two years since the company went public. AWPT’s leadership in the sector was further recognized by being ranked the 74th largest private water operator globally by the Global Water Intelligence (GWI) in terms of the number of served people exceeding 26 million. We solidified our leadership in the kingdom by further growing our market in the sector to include close to SAR72 billion (USD3.2 billion) in awards of new high-profile water and wastewater privatization projects, including a ground-breaking privately financed transmission pipeline (Rais-Rabigh IWTP-2), which is a break-through for the Kingdom, marking the first time a long-distance water transmission pipeline in the Middle East will be delivered entirely by the private sector. AWPT’s consortium will build, own, operate, and transfer the Rayis-Rabigh independent water transmission pipeline (IWTP-2) with a transmission capacity of 500,000 m3/day to provide the Mecca and Medina regions with drinking water for 35 years. This positions AWPT as the unique lead developer in the kingdom with full spectrum operation and maintenance (O&M) and engineering, procurement, and construction (EPC) capabilities to fully manage and execute the works in house. Such competitive advantage catalyzes AWPTS’ exponential growth in the water privatization sector with large­ investment plans by government offtakers to continue. We further expanded our portfolio in the privatization sector by winning two Long Term Operation and Maintenance (LTOM) projects in Riyadh with the National Water Company (NWC) at a combined value of SAR3.8 billion (USDl.0 billion) with 75 years’ duration. The projects , ” LTOM-5″ and “LTOM-6,” entail the operation, rehabilitation, upgrade, and expansion of three wastewater treatment plants in Manfouha with a combined capacity of 700,000m3/d and four plants in Heet and Al-Hayer with a combined capacity of 870,000m3/d.

Building on the recent major wins in the PPP arena, can you elaborate on how will the government’s privatization initiatives impact the company’s future strategic direction and expansion?
The Saudi National Water Strategy 2030 set a clear roadmap that included several strategic programs , namely the privatization of water treatment and distribution, wastewater treatment , and reuse of treated sewage effluent. The instrumental role of water and wastewater infrastructure and service as a bedrock for the development of the nation and one of the pillars in Saudi Vision 2030 has propelled the water sector into a top priority sector in Saudi Arabia. AWPT’s deep matter expertise offering integrated services along the entire water and wastewater value chain, through all relevant delivery models including engineering, procurement construction (EPC), operation and maintenance (O&M), public-private partnerships (PPP), and valued-added services such as city management contracts, gives the company tremendous growth market potential in a sector driven by the national water strategy and Vision 2030 mandates. Alkhorayef Water and Power possesses unmatched capacity to further drive the exponential growth we enjoyed for the past years, further enabled by the planned USD200 billion in investment and spending in the sector for the foreseeable future.

Can you elaborate on Alkhorayef Water and Power Technologies’ financial performance for 2023 and backlog?

On the financial side as of the third quarter of 2023 company revenue grew by 779% compared to same period previous year, gross profit grew by 42% at a margin of 75.7%, with net income before zakat growth of 38% with a double digit net margin. We achieved a return on equity at 33% and return on asset at 77%. Moreover, we maintained good sector diversification, growth, and profitability, with each of the company’s sectors registering remarkable growth. The integrated water solutions sector, which is an indicator of the company’s strength in performing broad spectrum integrated water solutions, grew at 20%, water segment revenue grew at 247%, and wastewater segment grew at 52%. All segments achieved double-digit gross profit margin. The value of remaining revenue from the company’s contracts to be recognized as a ” backlog ” grew by 777% in the third quarter of 2023 compared to year-end 2022 and a staggering 360% from year-end 2027. The backlog stands at SAR7.550B (USD2 billion) as of 9M2023.

With the increasing focus on sustainability and environmental conservation, how does AWPT contribute to sustainable water management practices in Saudi Arabia?
AWPT’s strategy is guided by the principles of securing, optimizing, and ensuring water and wastewater services. The company strives to implement sustainable water practices that guarantee access to water and wastewater services for its customers, manage them efficiently and effectively, and maintain their quality and reliability. The commitment to the environment is at the heart of everything we do; this is evident from the company’s lead in the kingdom by serving over 26 million inhabitants with water and wastewater services. We are further applying the sustainable water management practices to include prevention, remediation, and efficiencies via visible and underground leak detection and repairs of water lines, saving tremendous volumes of water annually from waste and therefore preventing energy and resources losses resulting from such leaks. Repairing breakages in sewage lines prevents spills, underground water contamination, and preserves public health. Building, rehabilitating, operating, and maintaining sewage treatment plants alleviates damage to the environment, while the advanced sludge treatment results in solid waste that can be reused further down the line, and the same goes for the treated sewage effluent, which can re-used for irrigation purposes. We will continue to expand the implementation of ecological solutions and environmental conservation practices in the future with the objective of improving the environment and being a major contributor in the decarbonization of our sector.

What are your strategic goals for AWPT?
In addition to the continuous growth in the current operation and maintenance business in which the company occupies the leading market share in the Kingdom and project services contracts in the water and wastewater sector, we are actively working to further expand our client base and win additional long-term operation and maintenance contracts with contractual duration extending to 75 years for sewage treatment plants in various regions of the country. We are also actively participating in privatization proposals such as the Independent Water Transmission Pipeline and the Independent Sewage Treatment Plants projects offered by Saudi Water Partnerships Company, where we are positioned as one of the most qualified local companies to implement these projects thanks to our long successful track record, deep experience, and leadership in the sector. Drawing on the company’s wealth of expertise, resources, and leadership, we are in prime position to leverage the privatization efforts and foresee our company to be one of the leading global developers in in the future.

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