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Bahrain advances utility reform

7 November 2025

 

In September, Bahrain’s government referred a draft law to parliament to restructure the kingdom’s electricity and water sector.

This proposes dissolving the Electricity & Water Authority (Ewa) and transferring its assets and functions to a newly established National Electricity & Water Company, which will operate under the oversight of the Electricity & Water Regulatory Authority. 

The reform marks the first full structural overhaul of Bahrain’s utilities sector in nearly two decades and signals a shift towards a more commercially driven model. 

Regulatory and operational roles would be separated for the first time, allowing private sector participation under transparent licensing and tariff systems, aligning Bahrain with utility reforms seen in Saudi Arabia, Oman and the UAE.

It comes amid a relatively subdued year for new contracts that broadly falls in line with 2024’s performance. Most significantly, Bahrain continues to move towards its two upcoming utility public-private partnership (PPP) schemes, the Sitra independent water and power project (IWPP) and the Al-Hidd independent water project (IWP).

In August, a developer tender was issued for the main works package for the Sitra IWPP. This followed the prequalification of seven companies and consortiums, reflecting a wide range of international interest.

The planned Sitra IWPP replaces the previously planned Al-Dur 3 and will be the first IWPP project to be awarded since the 1,500MW Al-Dur 2 IWPP was completed in 2021.

The combined-cycle gas turbine (CCGT) plant is expected to have a production capacity of about 1,200MW of electricity, while the project’s seawater reverse osmosis (SWRO) desalination unit will have a production capacity of 30 million imperial gallons a day (MIGD) of potable water. The main contract is expected to be awarded by the end of the year, with commercial operations set for 2029. 

A developer tender was also recently launched for Bahrain’s first independent, standalone SWRO plant following a prequalification process that shortlisted nine companies and consortiums.

The Al-Hidd IWP is expected to have a production capacity of about 60MIGD of potable water and be completed in 2028. It is likely to be the last IWPP for Bahrain, which aims to reach net-zero carbon emissions by 2060.

The imminent launch of the two projects boosts Bahrain’s projects pipeline, which has experienced muted growth in the aftermath of the Covid-19 pandemic, carried by relatively small-scale projects.

Solar PV projects

The creation of the National Electricity & Water Company as Bahrain’s new operational entity could also support the rollout of future renewable energy schemes. 

As a corporatised offtaker, the company will be able to enter long-term power purchase agreements (PPAs) with private developers under a more bankable framework. Currently, these are negotiated by Ewa on a case-by-case basis.

Private sector PPA agreements are gaining traction. The UAE’s Yellow Door Energy signed a PPA with steel producer Foulath Holding in early November to install the world’s largest single site rooftop solar installation at Foulath’s steel production complex in Salman Industrial City.

Bahrain has already set a target to source 20% of its energy from renewables by 2035 and reach net-zero emissions by 2060.

In October, Ewa also issued a tender for the development of the Bilaj Al-Jazayer solar independent power project (IPP). The planned 100MW project will be developed on a build-own-operate basis with a 25-year contract term.

In parallel, Bahrain is broadening its long-term energy strategy beyond solar. In July, the kingdom signed a cooperation agreement with the US on the peaceful use of nuclear energy, aimed at advancing research and potential deployment of small modular reactor (SMR) technology.

For countries like Bahrain, which has limited land availability and high energy demand growth, SMRs could offer a way to produce low-carbon, reliable baseload power without requiring vast areas of land for solar or wind farms. 

Officials have indicated that SMRs, along with floating solar solutions, are being studied as part of a broader push to diversify energy sources and expand renewable generation capacity.

Water and waste

Bids for four Ewa-owned projects are currently being evaluated. This includes the construction of a new SWRO desalination plant on Hawar Island and rehabilitation works for the Ras Abu Jarjur water treatment plant in Askar. Contracts for both projects are expected to be awarded this year.

Bahrain’s Ministry of Works (MoW) is the other client for the island-state’s power and water infrastructure-related projects. It has awarded three smaller sewage-related contracts this year.

It is also preparing to tender the construction of a $130m sewage treatment plant in Khalifa City, which will be developed in two phases. Meanwhile, the construction of MoW’s sewerage scheme phase 2 network in Bahrain remains in the early design stage with no further updates.

As Bahrain moves ahead with these projects, the new electricity and water law could define how future investments are structured, regulated and financed. This could reshape the kingdom’s utilities landscape for decades to come.

MEED's December special report on Bahrain also includes:

> ECONOMY: Bahrain’s cautious economic evolution
> BANKING: Mergers loom over Bahrain’s banking system
> OIL & GAS: Bahrain remains in pursuit of hydrocarbon resources
> CONSTRUCTION: Bahrain construction faces major slowdown
> TRANSPORT: Bahrain signs game-changer aviation deal with Air Asia

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Mark Dowdall

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