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
  • Nakheel awards $143m Dubai Islands infrastructure deal

    20 April 2026

    Register for MEED’s 14-day trial access 

    Dubai-based developer Nakheel, now part of Dubai Holding, has awarded a AED527m ($143m) contract for the construction of the primary infrastructure and utilities works on Island B at the Dubai Islands development.

    The contract was awarded to local firm Al-Nasr Contracting Company.

    The scope covers the construction of roads, water networks, electrical and telecommunications networks, drainage and sewerage systems, and integration with the district cooling plant network at Island A.

    In October last year, Nakheel awarded Al-Nasr Contracting Company a AED169m ($46m) contract for the construction of the internal roads and utilities for the Bay Villas development at Dubai Islands.

    In August, MEED reported that Nakheel had awarded a AED2.6bn ($708m) contract to Abu Dhabi-based Fibrex Contracting to build the Bay Villas project at Dubai Islands. The contract includes the construction of 636 villas.

    The Dubai Islands development consists of five islands spanning 18.6 square kilometres. It features more than 59 kilometres (km) of waterfront and 20km of beaches, as well as parks, golf courses, promenades and cycling paths.

    The offshore island project gained renewed momentum in 2022, when Nakheel unveiled a new masterplan and rebranded it as Dubai Islands.

    The reclaimed islands were originally part of the Palm Deira project, which was partially completed before being put on hold in 2008.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16476987/main.jpg
    Yasir Iqbal
  • Borouge International appoints chief financial officer

    20 April 2026

    Newly formed chemicals giant Borouge Group International AG (Borouge International) has appointed Patrick Jany as chief financial officer (CFO). He will take office from 1 May, until which time Daniel Turnheim will continue to serve as interim CFO.

    Jany joins Borouge International with more than three decades of international finance leadership across industrial, logistics and chemical businesses. “With 20 years’ CFO experience in publicly listed companies, he brings deep financial expertise and a disciplined approach to capital management,” Borouge International said in a statement.

    Most recently, Jany served as executive vice-president and CFO of Danish shipping company A P Moller-Maersk, where he joined the executive board in 2020 and played a central role in strengthening financial discipline, portfolio management and value creation during a period of major strategic transformation.

    Prior to Maersk, he spent 25 years at Swiss specialty chemicals company Clariant AG, holding a range of senior finance, general management and corporate development roles across Europe, Asia and the Americas, eventually becoming group CFO. Earlier in his career, he held finance leadership roles at Sandoz AG, Clariant’s predecessor.

    Jany holds a Master of Business Administration degree from ESCP Business School.

    “As CFO, he will be part of a strong management team, leading and shaping Borouge International into a global industrial leader with scale, reach and financial discipline, supporting its long-term growth ambitions,” the company said in its statement.

    Chemicals giant

    Abu Dhabi National Oil Company’s (Adnoc Group) overseas investment arm XRG and Austrian energy major OMV completed the creation of Borouge International, a global chemicals giant with the fourth-largest polyolefins production capacity in the world, on 31 March.

    The new entity was formed by the merger of Adnoc Group and OMV’s respective shareholdings in Abu Dhabi chemicals producer Borouge and Austria-based Borealis, as well as the acquisition of Canada-based Nova Chemicals.

    Adnoc and OMV started the transaction to merge their interests in Borouge and Borealis, as well as acquire Nova Chemicals, in March last year. In July, Adnoc announced it would transfer its stake in Borouge International to XRG upon completion of the transaction.

    Borouge International is headquartered and tax-domiciled in Austria, with regional headquarters in Abu Dhabi, UAE. The new company will operate corporate hubs across North America, Europe and Asia, with innovation centres in the UAE, Austria, Canada, Finland and Sweden.

    Financial prospects

    Borouge International will benefit from a superior resilient margin profile and well over $500m in identified earnings before interest, taxes, depreciation, and amortisation (ebitda) run-rate synergies per annum, with 75% expected to be realised within the first three years, XRG said at the time of creation of the entity.

    “The company’s global reach, combined with long-term shareholders and a robust capital structure, will deliver resilience throughout the business cycle and an enhanced ability to drive consistent performance and sustainable value for shareholders,” XRG said in its statement.

    The new company has also secured credit ratings of A (Negative) / Baa1 (Stable) / A- (Stable) ratings from S&P, Moody’s and Fitch, respectively, “confirming its robust financial position and capital structure and ability to access a range of long-term financing options”.

    “XRG and OMV are committed to maintaining investment-grade credit ratings for Borouge International,” they said.

    Additionally, Adnoc and OMV plan to tender an offer to convert Borouge Plc shares to Borouge International AG shares, thereby “creating a simplified structure that will enable value creation from the new global growth platform”.

    The tender offer is expected to take place in 2027, subject to market conditions and approval by the UAE Capital Market Authority, with its timing “aligning with the new company’s future equity raise, to maximise value for all shareholders”.

    Until then, Borouge International will be privately held, and Borouge Plc shares will remain listed on the Abu Dhabi Securities Exchange (ADX). The recently received credit ratings factor in the impact and flexibility on timing of both the future equity raise and the planned acquisition of Borouge 4 at cost by Borouge International.

    Borouge International also recently announced a dividend payment of $1.32bn for 2025, “reflecting the company’s strong operational performance and record sales”.

    The final shareholder-approved dividend payment for 2025 amounts to $658m (8.1 fils per share), bringing the total 2025 dividend to approximately $1.32bn (16.2 fils per share). The dividend will be paid on or around 7 May to all shareholders of record as of 17 April.

    Including this dividend, Borouge Plc will have distributed $4.89bn in dividends since listing, one of the largest payout levels on the ADX over this period.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16476909/main.gif
    Indrajit Sen
  • Dubai’s RTA opens Hessa Street upgrade

    20 April 2026

    Dubai’s Roads & Transport Authority (RTA) has opened Hessa Street for public traffic after announcing that the construction of the road’s expansion has been completed.

    The scope of the project included expanding Hessa Street from two to four lanes in each direction and developing four intersections with Sheikh Zayed Road, First Al-Khail Street, Al-Asayel Street and Al-Khail Road. 

    The project increases the road’s capacity from 8,000 to 16,000 vehicles an hour in both directions.

    It will reduce the travel time from Sheikh Zayed Road to Hessa Street from 15 minutes to just four minutes.

    The Sheikh Zayed Road intersection will have a two-lane road heading from Sheikh Zayed Road to Hessa Street, eastwards to Emirates Road.

    The upgrade of the First Al-Khail intersection includes increasing the number of lanes from three to four in each direction on the existing Hessa Street Bridge.

    The third improvement covers upgrading the Hessa Street and Al-Asayel Street intersection by increasing the number of lanes from two to four in each direction.

    The Hessa Street and Al-Khail Road intersection upgrade includes the construction of a two-lane road to serve traffic travelling northwards to Al-Khail Road in the direction of Sharjah.

    The project mainly serves residential areas, including Al-Sufouh 2, Al-Barsha and Jumeirah Village Circle.

    In February 2024, MEED exclusively reported that the RTA had awarded a AED689m ($187.5m) contract to Turkiye’s Gunal Construction for the first phase of the Hessa Street improvement project.

    The RTA recently started the construction works on the second phase of the project.

    The scope covers upgrade works on three intersections, including the construction of bridges totalling 8.8 kilometres (km), a 480-metre tunnel, and enhancements to access points on surrounding roads to improve entry and exit flow on a 3km stretch between Al-Khail Road and Sheikh Mohammed Bin Zayed Road.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16475593/main.jpg
    Yasir Iqbal
  • Kuwait LNG project expected to be worth about $200m

    20 April 2026

     

    The planned Kuwaiti project to develop a reliquefaction unit at the Al-Zour LNG import terminal is expected to be worth about $200m, according to industry sources.

    The client on the project is state-owned Kuwait Integrated Petroleum Industries Company (Kipic).

    The project is focused on the development of a boil-off-gas unit at the import terminal, according to a report in Kuwait’s Al-Anba newspaper.

    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)

    Kuwait’s LNG import terminal is currently not operating due to disruption caused by the US and Israel’s war with Iran.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

    Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16445370/main1228.jpg
    Wil Crisp
  • Saudi Arabia’s Misk tenders residential package

    17 April 2026

     

    Saudi Arabia’s Mohammed Bin Salman Foundation (Misk Foundation) has floated two tenders for the construction of a residential community in District 5 of Prince Mohammed Bin Salman Nonprofit City in Riyadh.

    The first tender is split into two packages, one that covers the construction of 237 villas and the other covering 223.

    The second tender covers the construction of a community centre, swimming pool, mosque and school.

    The bid submission deadline for both tenders is 27 April.

    Misk Foundation is jointly developing the project in collaboration with local real estate developer Kinan.

    The estimated SR900m ($240m) project will span an area of about 121,692 square metres.

    In March 2022, the Misk Foundation released the masterplan for Prince Mohammed Bin Salman Nonprofit City.

    Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud said in November 2021 that the Misk Foundation development in Riyadh will be the world’s first non-profit city.

    “Prince Mohammed Bin Salman Nonprofit City, which implements the digital twin model, will host academies; colleges; Misk schools; a conference centre; a science museum; and a creative centre offering a space to support the ambitions of innovators in sciences and new-generation technology, such as AI [artificial intelligence], IoT [Internet of Things] and robotics,” he said.  

    “It will also feature an arts academy and art gallery, a performing arts theatre, a play area, a cooking academy and an integrated residential complex.

    “In addition, the city will host venture capital firms and investors to support and incubate innovative enterprises to drive community contributions from around the world.”

    The consultants working on the project include Germany’s Albert Speer + Partner as master planner and architect, and UK-based Buro Happold as the engineer. The project manager for the first phase of construction is UK-based Mace.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16440697/main.png
    Yasir Iqbal