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Egypt set to tender four desalination plants

23 March 2023

 

The London-based European Bank for Reconstruction & Development (EBRD) and Washington-headquartered International Finance Corporation will support Egyptian authorities in preparing and procuring four seawater desalination plants.

The two banks signed an advisory deal with The Sovereign Fund of Egypt (TSFE) and the Egyptian government, according to EBRD.

They will support structuring and implementing the public-private partnership (PPP) desalination projects to increase water supply in the country, “particularly from sustainable, unconventional sources”.

Egyptian authorities are expected to announce the list of qualified bidders for the contracts to develop renewable energy-powered desalination plants in Egypt soon, as MEED reported.

The agency is understood to have received 28 prequalification applications for the contracts. About 21 of those will likely be qualified, according to Atter Ezzat Hannoura, PPP central unit director at Egypt’s Finance Ministry.

The consortiums formed and the companies that sought to prequalify to bid for the contracts are understood to include:

  • Abengoa (Spain) / Petrojet (local) / Cobra Instalaciones (Spain)
  • Acwa Power (Saudi Arabia)
  • Amea Power (UAE) / PowerChina (China) 
  • Aqualia (Spain) / Samcrete (local) / Globeleq (UK) / Ignis (Spain)
  • Engie (France) / Hassan Allam Holding (local) 
  • Gama Construction (local) / Sogex (local) /  Aljomaih Holding (Saudi Arabia) / Wabag (India)
  • GS Inima (South Korea/Spain) / Infinity Power (local) / China Energy Engineering Corporation (China)
  • Acciona (Spain) / Orascom Construction (local) / Scatec (Norway) / Metito /Toyota Tsusho (Japan)
  • Sojitz (Japan)
  • Sumitomo (Japan)
  • Suez (France) / Meridiam (France) / Elsewedy Electric (local)

Potential developers and contractors will be qualified across four capacity-based categories.

The following maximum capacity has been set for each of the four categories for which companies will be qualified:

  • Up to 200,000 cubic metres a day (cm/d)
  • Up to 400,000 cm/d
  • Up to 600,000 cm/d
  • Up to 1 million cm/d

The companies can then bid for the projects that fit their profile.

TSFE has been mandated to undertake the prequalification process on behalf of the New Urban Communities Authority, the Holding Company for Water & Wastewater and the Suez Canal Authority.

It is understood that the North African country aims to procure up to 3.8 million cm/d of water desalination capacity within 18 to 24 months.

Desalination strategy

Egypt’s long-term water strategy envisages the procurement of up to 100 water desalination plants over 30 years, ending in 2050.     

The first bundle of plants to be procured falls within the programme’s first phase, which ends in 2025. 

A high-level committee has been formed and will recommend the date on which the requests for proposals (RFPs) for the first plants will be issued, Hannoura told MEED in June last year.

The committee will also decide which schemes will be tendered in the initial phase.

MEED reported in February that Egypt plans to begin tendering four or five water desalination plants as soon as land selection, acquisition and negotiations are completed.

The first plants to be procured are located in El-Hamam in Matrouh and Safaga and Marsa Alam on the Red Sea coast, Hannoura said at the time.

It is understood that the newly formed committee will make a final decision on which plants will be procured first.

Hannoura confirmed in February that there are proposals from several international and local organisations to develop desalination plants.

The intended approach is for the government to tender the first few packages as PPP projects before moving to directly negotiated contracts for the rest of the 47 desalination plants that it intends to put in place by 2025.

Hannoura said this will enable price discovery and facilitate negotiations for the planned facilities.

Egypt is among the world’s most water-stressed countries and is susceptible to climate change-induced freshwater scarcity.

Ensuring water security and introducing resilience and sustainability to the water supply system is a top national priority, according to EBRD.

The country aims to transition coastal areas to desalinated water as their primary water source and plans to implement a total desalination capacity of 8.8 million cm/d by 2050.

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Jennifer Aguinaldo

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