STAMFORD, Conn. -- Poseidon Resources Corporation and its affiliate, the Atlantis Water Fund, L.P. have completed two critical steps in their Mexico investment program. The Stamford-based development companies, teamed with Grupo Cydsa, have successfully closed financing for the Tula wastewater treatment facility and were officially notified that they won the concession to build and operate PEMEX's Minatitlan wastewater treatment facility.
The 5 MGD Tula treatment plant is located near PEMEX's refinery in the state of Hidalgo, Mexico. Under the terms of the service agreement signed between Aguas Tratadas de Tula, S. de R.L. de C.V. (ATT, the special purpose company which owns the Tula treatment facility) and Pemex Refinacion (a subsidiary of Mexico's national oil company), ATT will design, build, own and operate a facility that will treat effluent from the Tula refinery and will allow the refinery to recycle process water. Atlatec, S.A. de C.V., the environmental services subsidiary of Grupo Cydsa, will provide engineering, procurement, and construction services as well as operations and maintenance services for ATT.
Bayerische Hypo-Und Vereinsbank AG (HVB) will lend US $13.55 million to ATT under a 12-year construction and term-debt facility. The remaining capital for the project will be financed through equity investment from Atlantis Water Fund, Grupo Cydsa and Seghers Better Technology Group of Belgium, the equipment supplier for the project. Tula represents a rare example of a successful non-recourse project financing with attractive financing terms following difficult times for emerging markets borrowers in the post-Asia and post-Brazil crises.
The Minatitlan project, which will treat refinery effluent as well as wastewater from a nearby municipality, represents the fifth and final privatization of wastewater treatment facilities associated with PEMEX's refining operations. Poseidon, Atlantis, and Grupo Cydsa will act as co-developers and equity investors in the $41 million Minatitlan project. The project concession was narrowly won just weeks ago, using an innovative debt structure involving a Japanese Yen facility. Together with the Cadereyta and Madero wastewater projects, Poseidon and its affiliates hold equity interests in four of the PEMEX projects. The Cadereyta facility is in the eighth month of operations, while construction completion for the Madero facility is expected in August 1999.
Poseidon is recognized as a leading developer of, and investor in, desalination and wastewater public-private projects in the U.S. and international markets. Poseidon's management has successfully financed and has under mandate development projects exceeding $300 million. Notable projects include the nation's first large-scale wastewater public-private partnership with the City of Cranston, Rhode Island, and the nation's largest desalination plant, to be built in Tampa, Florida.
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