meed-logo

line1 line2 line3
SIGN IN / REGISTER

Water sector braces for likely slowdown

27 December 2024

 

Geopolitical tensions, climate change and higher-than-average population growth have exacerbated the water demand and supply gap across the Middle East and North Africa (Mena) region, home to some of the world’s most water-stressed countries.

For example, Jordan, where available water per capita is equivalent to only 12% of the absolute water scarcity level, hosts over 700,000 refugees fleeing wars and conflicts in neighbouring countries.

Most regional governments have developed and started to implement water strategies aimed at narrowing this gap. Subsidies are being phased out, environmental campaigns are being developed and digital solutions are being deployed in order to manage demand and improve efficiency.

Expanding desalination and treatment capacity, increasing treated sewage effluent (TSE) reuse, boosting reservoir capacity and building more efficient transmission and distribution networks are key levers used to improve supply.

Strong spending 

These efforts have prompted significant capital spending on more energy-efficient water production, distribution and storage facilities, typically in partnership with private investors, particularly among the more affluent states.

According to data from regional projects tracker MEED Projects, the Mena region awarded $17bn of project contracts across the water desalination, treatment, transmission and distribution, storage and district cooling subsectors in the first nine months of 2024.

This figure represents about 72% of the contracts awarded in 2023 and is slightly above the average value of annual contract awards in the preceding five years.

With only a few more packages expected to be awarded before the end of the year, 2024 looks set to be one of the best years so far in terms of water project activity, even if it fails to match the record value of contracts awarded in 2023, which reached almost $24bn.

In 2024, Saudi gigaproject developer Neom set the pace in January by awarding a $4.7bn contract to build dams at the Trojena Mountain Resort in Tabuk to Italian contractor WeBuild. 

The contract covers the construction of three dams that will form a freshwater lake for the Trojena ski resort. The main dam will have a height of 145 metres and will be 475 metres long at its crest. It will be built using 2.7 million cubic metres of roller compact concrete.

While this project does not necessarily belong to the band of solutions that aim to narrow the water supply and demand gap, the overall development is part of Saudi Arabia’s drive to boost tourism and diversify its economy away from oil.

Meanwhile, 2024 also saw the award by UAE northern emirate utility Sharjah Electricity, Water & Gas Authority of the contract to develop its first independent water project (IWP), the 400,000 cubic-metres-a-day facility in Hamriyah, to Saudi utility developer Acwa Power, the contract’s sole bidder.

In May, Saudi Arabia’s National Water Company announced that it had completed the award of 10 contracts under the first phase of its privatisation programme. Each rehabilitate, operate and transfer contract involves the retrofitting or expansion of existing sewage treatment plants and associated network, and their long-term operation and management. The facilities are expected to deliver water at the TSE level for irrigation reuse.

On the greenfield sewage treatment front, Saudi Water Partnership Company (SWPC) awarded a $400m contract to develop the Al-Haer independent sewage treatment plant (ISTP) project to a team comprising the local Miahona Company and Belgium’s Besix. The facility is the largest and first to be tendered under the third round of the water offtaker’s ISTP procurement programme.

In September, Chennai-headquartered VA Tech Wabag confirmed it had won a $317m contract to build the Ras Al-Khair seawater reverse osmosis (SWRO) facility in Saudi Arabia using an engineering, procurement and construction (EPC) model. The project client is Saudi Water Authority (SWA), formerly Saline Water Conversion Corporation.

In Oman, Nama Water Services awarded two water distribution network packages, worth a combined $600m, catering to Al-Dhahirah Governorate.

Jordan also appointed a team comprising Paris-based Meridiam, Suez and Vinci Construction Grands Projets, along with Egypt’s Orascom Construction, for the contract to develop the Aqaba-Amman water conveyance and desalination scheme. It is the country’s largest infrastructure project to date and the first phase is valued at an estimated $2bn-$3bn.

The project is crucial to addressing Jordan’s severe water shortage problem, piping desalinated water over 445 kilometres from the southern Red Sea coast to the country’s northern regions. The consortium is talking to lenders and aims to reach financial close for the project in 2025.

Slower momentum

Despite 2024 being a good year for contract awards, it fell short of the expectation built over the past few years, when the region’s largest economies began to execute their long-term water strategies.

For example, in Saudi Arabia, the years-long restructuring of the domestic water sector took a significant turn in 2024, with Water Transmission Company (WTCO), the kingdom’s licensed desalinated water transmission operator, gaining a broader portfolio of projects. As a result, the mandate to procure upcoming water transmission pipelines has been transferred to WTCO from SWPC.

The slower pace of IWP contract awards in Saudi Arabia was somewhat offset by a slew of tenders from SWA. The authority received bids for the EPC contracts to build four SWRO facilities in 2024, although as of November it had only managed to award one.

Earlier in 2024, Saudi gigaproject developer Neom also shelved a project to develop a zero-liquid discharge (ZLD) SWRO plant.

“The year may not have been as strong as 2023, but it is still a good year,” says Robert Bryniak, CEO of Dubai-based Golden Sands Management (Marketing) Consulting. “Some projects have been delayed or cancelled – for instance a few in Saudi Arabia – but all in all [2024 has been] a good year for the water business.”

Bryniak adds that Neom’s ZLD scheme is one of the year’s shelved projects that he would like to see revived in the future.

Beyond the GCC states, Morocco and Egypt are endeavouring to move their planned SWRO projects into the tendering phase.

In Morocco, Office National de L’Electricite et de L’Eue Potable (Onee) extended the review of its second IWP in Nador while waiting for its first IWP in Casablanca to reach financial close.

The first batch of renewable energy- powered desalination plants in Egypt has yet to reach the proposals stage despite the Sovereign Fund of Egypt having completed the bid prequalification process in 2023.

Potential contract awards

According to data from MEED Projects, an estimated $34bn-worth of water projects are in the tendering stage across the Mena region. A further $40bn-worth is in the prequalification stage and $57bn is in the design and study phases.

The $22bn Dubai Strategic Sewerage Tunnels (DSST) scheme stands out among the upcoming projects due to its scale, as well as for the chosen procurement approach.

The project aims to convert Dubai’s existing sewerage network from a pumped system to a gravity system by decommissioning the existing pump stations and providing a sustainable and reliable service that is fit for the future.

In April, Dubai Municipality launched the procurement process for the DSST project, which is to be developed as a public-private partnership (PPP).

While a dose of pessimism persists over the chosen PPP model – in part due to the project’s scale and strong civil works orientation, and Dubai’s dismal track record in procuring PPP schemes outside the utility sector – the project has managed to attract strong interest from EPC contractors, as well as from potential investors and sponsors.

Some of those that have sought to prequalify as investors, such as Begium’s Besix, Beijing-headquartered China Railway Construction Corporation and South Korea’s Samsung C&T, have previously been prequalified as EPC contractors for the DSST project, which suggests that the preferred approach of prequalifying EPCs ahead of investors could offer advantages.

In Saudi Arabia, WTCO, SWA, SWPC and Neom’s utility subsidiary Enowa are each expected to let several contracts in 2025, while Bahrain and Abu Dhabi could award one IWP contract each.  

However, a robust overall pipeline does not necessarily guarantee that 2025 will resemble the upward trajectory that the sector has seen in the past two years.

“This year could be a turning point for the water industry throughout Mena,” says Bryniak, alluding to the possibility that, come January, the foreign and climate policies of the new occupant of the White House could affect the trend of water production capacity buildout in the Mena region.

Bryniak says that if US President-elect Donald Trump follows through with his promises, then we may be in store for, among other events, lower energy prices as the US drills more oil; a dampening of world trade as the US places tariffs on imports, especially on Chinese goods and services; less focus on the environment; and, generally, a more isolationist America.

“In my view, much depends on how much oil prices fall,” he continues. 

“A significant drop in oil prices could result in cut-backs in a lot of development projects, and this, in turn, will adversely impact water demand and the overall build programme.”  

However, the impact will not be uniform across asset types and procurement models, Bryniak notes. He expects water PPP projects to continue to grow, especially if capital availability is reduced by lower oil prices, as this is one way to preserve capital for use in other areas. 

“I do not see any reason for tariffs to fall further in 2025. Tariffs, in my view, will remain roughly where they are now or increase slightly,” adds Bryniak.  

However, the executive says that EPC contracts will likely have “a higher opportunity cost”, so there might be a reduced focus on this type of procurement model.  

He concludes: “To the extent that development projects get trimmed down due to less capital being available as a result of significantly lower oil prices, then water procurers and other developers will likely scale back their projects.”

https://image.digitalinsightresearch.in/uploads/NewsArticle/13146291/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Neom’s industrial pivot gathers pace

    1 October 2026

    Commentary
    Colin Foreman
    Editor

    Reprioritisation has been the buzzword in Saudi Arabia over the past two years and nowhere has that been more evident than at Neom. 

    The slowdown of development at The Line and the postponement of the 2029 Asian Winter Games at Trojena have dominated international headlines. As these projects scale back, Oxagon’s industrial and logistics base has become the $500bn gigaproject’s flagship development. There are tangible results: in August, the $8.5bn Neom Green Hydrogen project was commissioned, marking Neom’s most significant completion to date. 

    Construction activity elsewhere at Oxagon supports this trend. The AI data-centre campus being developed by Humain and DataVolt has broken ground on its first 100MW phase, backed by $5bn of investment and targeted for service in 2028. Neom has issued an expression of interest for a rail line linking the Port of Neom to Saudi Arabia Railways’ North-South network, tenders are out for an industrial wastewater plant and the upgrade of Highway 55, and the port itself is advancing towards a 2030 capacity target of 1.5 million TEUs. 

    The regional conflict that began in February has strengthened the business case by giving Oxagon’s Red Sea port added strategic weight as a second maritime gateway outside the Strait of Hormuz, at a time when Riyadh has committed to directing about 80% of the Public Investment Fund’s portfolio into domestic investment.

    These developments reflect a kingdom recalibrating rather than retreating

    Elsewhere, Saudi Arabia’s wider projects market is holding steady despite conflict-related disruption, with contract awards reaching $68bn so far this year. The regional power market is also diversifying, with Aljomaih, EDF and Kepco all more than tripling net capacity in recent years as Acwa retains its lead.

    These developments reflect a kingdom recalibrating rather than retreating, with priority given to projects capable of delivering commercial returns.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20178338/main.gif
    Colin Foreman
  • Contractor wins Dammam airport water infrastructure deal

    1 October 2026

    Saudi Arabia-based Alkhorayef Water & Power Technologies has won an SR80m ($21.3m) contract to rehabilitate water and wastewater infrastructure at King Fahd International airport in Dammam in the kingdom’s Eastern Province.

    The contract was awarded by Dammam Airports Company (DACO), and work is scheduled to be completed within 18 months, the firm said in a disclosure to the Saudi Exchange (Tadawul) on 29 September.

    The scope covers the design, construction, supply, installation, replacement, rehabilitation and integration of water and wastewater infrastructure.

    It includes pumps, storage tanks and reservoirs, reverse osmosis facilities, piping and tie-ins, as well as electrical and instrumentation works.

    The award comes as DACO advances a wider programme of investment at King Fahd International airport.

    DACO signed more than SR1.2bn ($320m) in agreements in June covering airport infrastructure, including a new power station, a medium-voltage distribution network and upgrades to the existing electrical grid. 

    In September, it also appointed WSP Middle East, the regional arm of Canadian engineering firm WSP, to develop the airport’s expansion under its masterplan.

    The expansion is intended to increase annual passenger capacity to more than 19.3 million by 2030, with a longer-term target of 32 million passengers. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20169118/main.jpg
    Mark Dowdall
  • Kuwait tenders LNG project

    1 October 2026

     

    State-owned Kuwait Integrated Petroleum Industries Company (Kipic) has tendered a project to develop a reliquefaction unit at the Al-Zour liquefied natural gas (LNG) import terminal.

    The project focuses on developing a boil-off gas (BOG) unit at the terminal, with bids due on 22 December.

    A meeting for contractors to discuss the project is scheduled for 18 October.

    The project scope includes engineering, procurement and construction works, along with pre-commissioning, commissioning and performance testing services.

    The list of prequalified companies is:

    • Fluor (US)
    • GS Engineering & Construction (South Korea)
    • Tecnicas Reunidas (Spain)
    • Larsen & Toubro (India)
    • Hyundai Engineering (South Korea)
    • CTCI Corporation (Taiwan)
    • Daewoo Engineering & Construction (South Korea)
    • Hyundai Engineering & Construction (South Korea)
    • Saipem (Italy)
    • Samsung Engineering (South Korea)
    • Sinopec Engineering (China)
    • JGC Holdings (Japan)
    • KBR (US)
    • China National Petroleum Corporation (China)
    • Technip (France)

    A BOG unit at an LNG facility captures, compresses and processes natural gas vapours that evaporate from cryogenic storage tanks, enabling the gas to be recycled back into the system rather than flared.

    In April, MEED revealed that contractors expected the project to be worth about $200m.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20168625/main2005.jpg
    Wil Crisp
  • Riyadh approaches contractors for 2km tower

    1 October 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Public Investment Fund (PIF) has reached out to contractors as part of a market-sounding exercise for the construction of the proposed 2-kilometre megatall tower project.

    MEED understands that a PIF subsidiary, the Tower District Real Estate Development Company, is undertaking the process.

    It is understood that several experienced international contractors, as well as some prominent local contractors, have been approached.

    The latest development follows PIF receiving offers in June last year from firms seeking a contract to provide project management consultancy (PMC) services for a new central business district (CBD) on the outskirts of Riyadh, which includes the proposed 2km tower.

    The PMC role covers both the tower and the surrounding district.

    Firms understood to have been invited to bid include US-based Aecom, Jacobs, Parsons and Turner, as well as the UK’s Mace.

    UK-based Foster & Partners is working as the architect for the tower after winning a design competition launched in late 2022.

    Record breaker

    The proposed tower would be more than double the height of the world’s tallest building, Dubai’s Burj Khalifa, which stands 828 metres tall. It is expected to be at least several hundred metres taller than the 1,000-metre-plus tower under construction in Jeddah.

    Contractors that have priced megatall towers in the region say a 2km-tall structure could cost about $5bn to construct, depending on the final design.

    The 2km tower and the surrounding CBD – known as Project Rise – sit within a larger masterplanned development to the north of Riyadh called the North Pole.

    MEED’s October 2026 report on Saudi Arabia includes:

    > COMMENT: Saudi projects hold steady
    > GOVERNMENT: Riyadh looks to reset its regional defence outlook
    > ECONOMY: Conflict bolsters case for Saudi economic diversification
    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
    > POWER: Saudi Arabia’s power award activity slows
    > WATER: Saudi water sector hits sharp slowdown
    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
    > DATABANK: Saudi data indicates project spending shift

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20156496/main.jpg
    Yasir Iqbal
  • Singapore’s Temasek plans Middle East expansion

    1 October 2026

    Singapore’s Temasek plans to open offices in Riyadh and Abu Dhabi early next year as it targets investment and partnership opportunities in Saudi Arabia, the UAE, Qatar and the wider region.

    The state-owned investor had a net portfolio value of S$518bn ($401bn) as of 31 March 2026.

    It said the new offices will serve as regional hubs for Temasek and its portfolio companies, with some businesses expected to co-locate to work more closely with partners and pursue deals alongside the group. The openings are subject to regulatory approvals.

    Temasek said it will also step up engagement with institutions in Qatar, although it has not announced plans to establish an office there.

    The company said the expansion reflects its confidence in the region’s long-term fundamentals and the economic transformation being driven by national diversification programmes.

    It added that a presence in Riyadh and Abu Dhabi will also support investment activity beyond the region by improving access to opportunities across the wider Middle East, Central Asia and Africa.

    Several Temasek-owned or Temasek-backed companies are already active in the GCC, providing a platform for the group’s planned expansion.

    These include Singapore-headquartered engineering and consultancy firm Surbana Jurong, which has been involved in masterplanning and advisory work on major regional developments, alongside other portfolio companies with interests spanning infrastructure, logistics, financial services and technology.

    According to data from regional project tracker MEED Projects, Surbana Jurong is involved in several major projects in Saudi Arabia, including King Abdulaziz International airport (KAIA) in Jeddah, Jeddah Islamic Port, Red Sea Global’s Amaala masterplan, the Trojena dams scheme, Oxagon, King Salman International airport and Saudi Arabia Railway’s North-South Phosphate Railway 3.

    The firm has also worked on projects in the wider region, including the West Link project, Urban Loop, Musaffah Innovation District masterplan, Etihad Rail’s high-speed rail programme and Abu Dhabi airport’s Midfield Terminal.

    Surbana Jurong has also secured masterplanning contracts from Abu Dhabi’s Department of Municipalities & Transport and Abu Dhabi Ports.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20157511/main.jpg
    Yasir Iqbal