Saudi Arabia’s National Water Strategy 2030 continues to drive investments in the kingdom’s water desalination, treatment and distribution sector.

The strategy aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90 per cent of the national urban supply to reduce reliance on non-renewable ground sources.

The need to boost the security of supply amid rising demand, volatile costs and increased compliance with sustainability goals is also driving project activity – particularly in terms of using more energy-efficient technologies to convert seawater into potable water – as well as improving storage capacity.

As of March, an estimated 2.66 million cubic metres a day (cm/d) of water desalination capacity is under construction by the main water utility provider Saline Water Conversion Corporation (SWCC) and state water offtaker Saudi Water Partnership Company (SWPC). 

At least a further 2.4 million cm/d of capacity is under procurement using both the independent water producer (IWP) model, mainly through SWPC, and the engineering, procurement and construction (EPC) model, primarily via SWCC. 

Following the award of successive IWP contracts in 2019-20, SWPC paced the award of new contracts and also tendered new jobs in 2021-22.

As in most sectors and geographies, the Covid-19 pandemic and war in Ukraine impacted project finance costs and inflation in Saudi Arabia, both particularly relevant to IWP projects.

New developments in the latter part of last year and the first few months of 2023, including the imminent award of the contract to develop the Rabigh 4 IWP, indicate that SWPC is reestablishing its projects momentum.

Similarly, there has been increased activity in water desalination EPC projects being procured by SWCC, such as the proposed seawater reverse osmosis (SWRO) facilities in Shuaibah and Yanbu, which have a combined capacity of over 1 million cm/d.

These are in addition to the under-construction Jubail 2 SWRO plant, with a capacity of 1 million cm/d, and the 400,000 cm/d Shuqaiq 1 SWRO facility, whose main contracts were awarded in 2021 and 2020, respectively.

Along with meeting rising demand, these projects address the decarbonisation requirements of Saudi Arabia’s water sector, which the kingdom’s pledge last year to reach net-zero carbon emissions by 2060 has made more urgent.

This drive is highlighted by the Shuaibah 3 IWP project, for which a team led by Riyadh-headquartered utility developer Acwa Power won the directly-negotiated contract in 2022.

The 600,000 cm/d SWRO plant will replace the existing multi-stage flash (MSF)-based desalination unit that is being decommissioned in 2025 at the existing Shuaibah 3 independent water and power project (IWPP).

The Shuaibah 3 project was the lone IWP contract awarded by SWPC last year.

The same carbon emissions reduction incentive is driving the Yanbu 2 SWRO project. According to SWCC, the project aligns with improving the environmental impact of the desalination water unit of Yanbu phase 2.

Power & Water Utility Company for Jubail & Yanbu (Marafiq) owns the Yanbu 2 integrated water and power desalination plant, which came onstream in 2015. Like the Shuaibah 3 IWPP, the facility’s desalination unit utilises the older, energy-intensive MSF technology.

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Other water PPP projects 

The procurement processes are proceeding simultaneously for several independent sewage treatment plants (ISTP), water transmission pipelines and water reservoir facilities being overseen by SWPC across Saudi Arabia.

SWPC tendered the first scheme under the third round of its ISTP programme in November. The Al-Haer ISTP will have a design capacity of 200,000 cm/d.

The tender is also expected in the first half of the year for the two other schemes under batch three, the Riyadh East and Khamis Mushait ISTP schemes.

At least five other ISTP projects are in the planning stage. 

In November, the Taif ISTP scheme, one of the first-round ISTP projects awarded in 2019, entered commercial operation. 

SWPC has received three bids for its first water transmission pipeline public-private partnership (PPP) project, which links Rayis in Medina to Rabigh in Mecca, with prequalification under way for three similar schemes.

Bids are due in April for the contract to develop the kingdom’s first independent strategic water reservoir (ISWR) project. The Juranah ISWR project will be implemented in Mecca, using a build, own, operate and transfer model. The project includes a water reservoir and associated infrastructure and facilities.

It supports Saudi Arabia’s goal to increase municipal water storage capacity to an average of seven days by 2030. In addition, the government aims to increase water storage capacity to an equivalent of 20 days of Hajj demand in Mecca and 40 days of Hajj demand in Medina by 2022. 

Two other IWTP schemes are planned for Mecca under SWPC’s 2020 seven-year planning statement.

Wastewater treatment

Over the past year, the kingdom’s chief wastewater collection and treatment firm, National Water Company (NWC), has tendered a series of contracts across governorates and provinces.

They include contracts for the construction of networks and pumping stations in Aziziyah in Mecca and other areas in Al-Khobar; three lifting stations and ejection lines with diameters of up to 700mm serving different areas in Jubail; and a sewage project in the King Fahd suburb in the Eastern Province and adjacent schemes west of Abu Hadriya Road in Dammam.

Requests for proposals (RFPs) have also been issued to complete sewage facilities in Al-Khafji governorate, West Safwa and Fayhaa.

These projects are part of NWC’s five-year, SR108bn ($29bn) investment plan for the kingdom’s water infrastructure. The latest five-year plan allocates an estimated SR39bn to Mecca, SR16bn to the Eastern Province and SR14.2bn to Riyadh.

The privatisation of NWC’s sewage treatment plant network is also being undertaken in parallel with improving its underlying infrastructure.

Under long-term operation and management (LTOM) agreements, private sector companies can bid to operate and upgrade water treatment plants.

The first package, for Mecca, was awarded in September 2022 to a team of the local Miahona and Thabat Construction Company. The rehabilitate-operate-transfer scheme is for 10 years and is valued at SR392m. Eight other packages are expected to be tendered under the LTOM programme.   

MEED's April 2023 special report on Saudi Arabia also includes:

> CONSTRUCTION: Saudi construction project ramp-up accelerates

> UPSTREAM: Aramco slated to escalate upstream spending

> DOWNSTREAM: Petchems ambitions define Saudi downstream

> POWER: Saudi Arabia reinvigorates power sector

> BANKING: Saudi banks bid to keep ahead of the pack