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Nation’s largest desal project faces financing hurdles

Posted by: Aqua Blog Maven on May 11, 2009 at 5:53 pm

From the New York Times:

Desalination’s transformation into a viable, mainstream water technology has long hinged on nettlesome fights over permits and politics. But with the largest proposed seawater conversion plant in the United States poised to be approved this week in San Diego, there is another problem: money.

The proposed $300 million plant, which would be built next to a coastal power station in Carlsbad, Calif., has long been viewed as a symbol of desalination’s plight in the United States. The project developer, Poseidon Resources Corp., has been winding its way through a maze of state and local agencies for six years, battling community groups, environmental organizations and wary politicians who fear desalinated water will mean added expense and environmental damage.

But that picture could change if the San Diego Regional Water Board votes for final approval. The stakes are high for desalination as many in the industry consider the plant a test case that could trigger a wave of development, especially in thirsty California.

“A lot of people who like desalination are looking to the Carlsbad plant to break the ice,” said Peter Gleick, a leading water resources expert and president of the Pacific Institute.

At Poseidon, officials are optimistic about the vote and have turned their attention to finding the money to build the facility. The shift comes at an inopportune time for the company given a national credit crunch that has made financing for water and energy projects difficult across the board.

But executives at Poseidon, which is partially owned by Citigroup Inc.’s Citi Sustainable Development Investments, insist their financial prospects are solid despite the economic uncertainty. The company recently sent its financial package to a short list of lenders looking to play in the fledgling market, and according to Scott Maloni, a vice president at Poseidon, “a half-dozen proposals” were returned.

Read more from the New York Times by clicking here.

May 11, 2009 · Filed Under Poseidon's Carlsbad Plant

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