The California Debt Limitation Allocation Committee (CDLAC) voted on 27 January 2010 to allocated US$ 530 million in private activity bonds (PABs) to the Carlsbad Desalination Project.
CDLAC administers and allocates the state’s annual allocation of federal tax-exempt PABs for the financing of certain private development projects that benefit the public.
These bonds will lower the project’s debt-service costs, allowing public water-agency clients to purchase water at a lower rate from project owner Poseidon Resources. Unlike municipal bonds that also carry a tax-exempt status, Poseidon will solely be at risk to pay the principal and interest on the PABs.
Poseidon Resources’ senior vice president Peter MacLaggan said, “The allocation of PABs clears the way for Poseidon to close project financing and move forward with full-scale construction of the plant.”
Agencies involved the project are the City of Carlsbad, Valley Center Municipal Water District, Sweetwater Authority, Santa Fe Irrigation District, City of Oceanside, Rincon del Diablo Municipal Water District, Olivenhain Municipal Water District, Rainbow Municipal Water District and the Vallecitos Water District.
Construction of phase 1 of the 50 MGD (189,000 m³/d) desalination plant started in November 2009. The facility is scheduled to be operational in 2012.