meed-logo

line1 line2 line3
SIGN IN / REGISTER

Saudi water projects momentum holds steady

12 September 2023

This package on Saudi Arabia’s water sector also includes: 

> Riyadh holds water pipeline bid clarifications
> Red Sea awards Amaala utility package
> Five banks agree $545m Rabigh 4 financing
> Saudi Arabia extends desalination bid deadline
> Albawani joins Jafurah water developer team
> Saudi Arabia evaluates Al-Haer wastewater bids

 

The Saudi water market remains the region’s largest, with $30bn-worth of projects in varying planning and procurement stages.

The sector is expected to expand further with multibillion-dollar capital expenditures allocated by the potable water and wastewater collection and treatment firm, the National Water Company (NWC), and Saline Water Conversion Corporation (SWCC), the world’s largest producer of desalinated water.

This offers great opportunities for water asset developers and engineering, procurement and construction (EPC) contractors aiming to capture a share of the kingdom’s burgeoning water projects market.

SWCC, NWC and the principal buyer of water, Saudi Water Partnership Company (SWPC), awarded over $32bn of water infrastructure and utility projects between 2013 and 2022, according to MEED Projects data.

Driving investment within the sector is the need to improve water security, a key component of Saudi Vision 2030, along with rising demand due to population and economic expansion.

Reducing the carbon footprint of the kingdom's existing seawater desalination fleet, dominated by plants running on older technologies, is also contributing to the urgency to build more energy-efficient water infrastructure.

This is matched by moves to make potable and wastewater water transmission and distribution more efficient and to minimise leakage and non-revenue water. The kingdom also needs to expand its overall water storage capacity to improve its emergency response.

Simultaneously, like most of its groundwater-scarce neighbours, there is growing pressure to adopt treated sewage effluent for agricultural and industrial applications to reduce demand for seawater desalination and comply with the kingdom’s circular carbon economy approach.

“It is an interesting time for the Saudi water sector,” says a Dubai-based water expert.

“There are many projects in the tendering phase, but there is also some degree of uncertainty in terms of how the roles of the key stakeholders could shift [in the future].”

This stems from the years-long restructuring of the sector and last year's cabinet resolution approving the transfer of water production, transportation and storage assets owned directly or indirectly by SWCC to Water Solutions Company, a wholly-owned subsidiary of the Saudi sovereign vehicle, the Public Investment Fund (PIF).

There is widespread expectation that SWCC will focus on research and development following the transfer of its assets to the PIF subsidiary, although this has not been formally announced. 

Diversified clients

The lengthy restructuring of the kingdom’s water sector and rapid advance of so-called gigaprojects have diversified the profile of clients in the kingdom.

Neom and its subsidiary Enowa, SWCC transmission arm Water Transmission & Technologies Company (WTTCo) and other gigaproject developers, such as the royal commissions for Riyadh City and Al-Ula, have joined the mainstream water utility companies and municipalities in tendering new water infrastructure contracts over the past year.

In terms of projects in the pre-execution phase, SWPC is the top client, with a pipeline of projects worth at least $7bn.

SWPC is mandated to procure all water infrastructure projects in the kingdom on a public-private partnership (PPP) basis, including water desalination, wastewater treatment, transmission and reservoirs.

Its latest Seven-Year Planning Statement covering 2022-28 stipulates the procurement of about 50 independent water infrastructure projects, including several in the bid stage.

SWPC’s future projects pipeline outperforms that of NWC and SWCC. Neom, Enowa, WTTCo and the Royal Commission for Al-Ula round out the top seven clients.

Riyadh rides power projects surge

Independent projects

Following consecutive awards of independent water producer (IWP) and independent sewage treatment plant (ISTP) contracts between 2019 and 2021, SWPC has recently paced out the award of new contracts.

It has only awarded one contract, directly negotiated with Saudi utility developer Acwa Power for the Shuaiba 3 seawater reverse osmosis (SWRO) project in 2022. This year, it awarded another contract for the Rabigh 4 IWP scheme, in addition to the contract to develop the kingdom’s first independent water transmission pipeline, which connects Rayis and Rabigh.

SWPC is evaluating the bids it received for the contract to develop the Al-Haer independent sewage treatment plant (ISTP), the first of the round-three projects under its ISTP programme, and expects to receive bids in October for the 300,000 cubic-metre-a-day (cm/d) Ras Mohaisen IWP.

The contract to develop the kingdom’s first independent strategic water reservoir (ISWR) project is expected to be awarded this year. The Juranah ISWR has a capacity to store 2.5 million cubic metres of water. The project is anticipated to significantly boost water security, particularly in Mecca and Medina, which host several million pilgrims annually.

EPC works

Despite moves to transfer its assets to the PIF subsidiary, SWCC cemented its reputation as the world’s largest producer of desalinated water when its fleet of 30 desalination plants reached a total combined capacity of 6.6 million cm/d in 2022.

The company is not resting on its past success, having issued successive tenders for SWRO plants using an EPC model over the past 12-18 months.

In July this year, it invited bids for the contract to build a 200,000 cm/d SWRO facility in Ras al-Khair.

This came three months after it received two bids for the contract to build the second phase of the Shuaibah water desalination plant, which has an even higher capacity of 545,000 cm/d.

Around the same time in March, SWCC tendered a contract to construct a greenfield SWRO plant in Yanbu with a design capacity of 500,000 cm/d.

SWPC last awarded a major SWRO contract in mid-2021. The giant 1 million cm/d Jubail SWRO plant is being built by a team of Metito and local firm Saudi Services for Electromechanic Works.

Before this, in late 2019, it awarded a contract to construct a 400,000 cm/d SWRO plant in Shuqaiq to a team of Spain’s Acciona and Al-Rashid Trading & Contracting Company.

SWCC, though WTTCo, has also tendered multiple water transmission projects, including pipelines around Riyadh and connecting Riyadh and Ras al-Khair, Shuqaiq and Jizan and Al-Duwadimi and Atif.

In its 2022 annual report, SWCC stated that it had achieved exceptional results in supporting the Saudi Green Initiative, reducing carbon emissions, increasing operational efficiency to above 99 per cent and saving SR1.6bn ($427m) in operational costs.

The company also “increased local content in its operational efficiency by 61 per cent and demonstrated noteworthy patent accomplishments, innovations, studies and scientific publications”.

Innovation

New tourism-related developments, the expansion of industrial complexes and the need to limit carbon emissions are driving capacity-building and innovation.

The Red Sea development is completing the kingdom’s first private sector multi-utility project, which includes developing and operating a solar photovoltaic power plant, battery energy storage system, water desalination and treatment and waste recycling plants in one contract.

In addition to tendering major water transmission and distribution networks, Neom is also finalising the design for a zero-liquid discharge SWRO plant catering to the development. Enowa, Japan’s Itochu and France’s Veolia are expected to tender the project's EPC package soon.

The proposed state-of-the-art desalination plant will be powered 100 per cent by renewable energy and use advanced membrane technology to produce separate brine streams.

This will enable the production of brine-derived products, which will be developed and monetised downstream. The bigger plan includes establishing a brine processing complex in Oxagon, which could require an investment of between $15bn and $20bn.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11132882/main.gif
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Abu Dhabi extends battery storage bid deadline

    14 March 2025

    Prequalified bidders were given a three-week extension to submit their proposals for a contract to develop and operate a battery energy storage system (bess) plant project in Abu Dhabi.

    The project client, Abu Dhabi-based utility offtaker Emirates Water & Electricity Company (Ewec), expects to receive bids by 24 March, three weeks from the previous tender closing date, according to a source familiar with the project.

    Called Bess 1, the 400MW project will closely follow the model of Abu Dhabi’s independent power project (IPP) programme, in which developers enter into a long-term energy storage agreement (ESA) with Ewec as the sole procurer.

    The first plant will be in Al-Bihouth, about 45 kilometres (km) southwest of Abu Dhabi, and the second plant will be in Madinat Zayed, about 160km southwest of the city.

    Ewec issued the request for proposals to prequalified companies in July last year and initially set 30 November 2024 as the last day to submit proposals. 

    MEED previously reported that up to four consortiums comprising infrastructure investors, developers and contractors have been formed and are preparing to submit their proposals for the contract.

    Ewec prequalified 11 managing partners that can bid either individually or as part of a consortium with other prequalified bidders. These are:

    • Acwa Power (Saudi Arabia)
    • China Electrical Equipment International (China)
    • EDF (France)
    • International Power (Engie)
    • Jera (Japan)
    • Jinko Power (China)
    • Korea Electric Power Corporation (Kepco, South Korea)
    • Marubeni (Japan)
    • Sembcorp Utilities (Singapore)
    • SPIC Huanghe Hydropower Development Company (China) 
    • Sumitomo Corporation (Japan)

    Ewec prequalified 18 other companies that can bid as part of a consortium. These are:

    • Abrdn Investcorp Infrastructure Investments Manager (UK)
    • AGP Capital (US)
    • Al-Masaood (UAE)
    • Al-Fanar Company (Saudi Arabia)
    • Alghanim International (Kuwait)
    • Aljomaih Energy & Water Company (Jenwa, Saudi Arabia)
    • Amplex-Emirates (local)
    • ATGC Transport & General Trading (local)
    • Amea Power (local)
    • China Electric Power Equipment & Technology (China)
    • China Machinery Engineering Corporation (China)
    • GE Capital EFS Financing (US)
    • Itochu (Japan)
    • Korea Western Power Company (Kowepo, South Korea)
    • Pacific Green (US)
    • Samsung C&T (South Korea)
    • Swift Energy (Malaysia)
    • X-Noor Energy Equipment Trading  (UAE)

    The planned facility is expected to provide up to 800 megawatt-hours (MWh) of storage capacity.

    The ESA will be for 15 years, commencing on the project’s commercial operation date, which falls in the third quarter of 2026. 

    According to Ewec, the bess project will provide additional flexibility to the system and ancillary services such as frequency response and voltage regulation.

    Global bess market

    The overall capacity of deployed bess globally is expected to reach 127GW by 2027, up from an estimated cumulative deployment of 36.7GW at the end of 2023, according to a recent GlobalData report.

    The report named Chinese companies BYD and CATL and South Korean companies LG Energy Solutions and Samsung SDI among the top battery technology providers globally.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13484751/main.gif
    Jennifer Aguinaldo
  • Indian and Spanish team wins Ras Mohaisen EPC package

    13 March 2025

    A team of India's Larsen & Toubro (L&T) and Madrid-headquartered Lantania has won the engineering, procurement and construction (EPC) contract for the Ras Mohaisen independent water project (IWP) in Saudi Arabia.

    State utility offtaker Saudi Water Partnership Company (SWPC) signed the water-purchase agreement contract for the project with a consortium comprising Riyadh-headquartered utility developer Acwa Power, Hajj Abdullah Ali Reza & Partners and Al-Kifah Holding Company in February. 

    According to L&T,  its Water and Effluent Treatment business division will execute the EPC contract for the desalination facility.

    The state water offtaker received two bids for the contract in April last year. The other bidder was Spain’s Acciona.

    The Ras Mohaisen IWP will be able to treat 300,000 cubic metres of seawater a day (cm/d) using reverse osmosis technology.

    It will also include storage tanks with a capacity of 600,000 cubic metres, equivalent to two operating days, intake and outfall facilities, process units and pumping stations.

    The build, own and operate project will also include electrical, automation and instrumentation systems and a solar photovoltaic plant. 

    The project is expected to reach commercial operation by the second quarter of 2028.

    The plant will be located in Al-Qunfudhah Governorate, about 300 kilometres south of Mecca, on the Red Sea coast in Saudi Arabia’s Western Region.

    The project is expected to enhance water supply chains and is intended to serve the Mecca and Al-Baha regions.

    Netherlands-headquartered KPMG acted as SWPC’s financial adviser, with UK-based Eversheds Sutherland acting as the legal adviser for the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13485233/main.gif
    Jennifer Aguinaldo
  • Egypt faces complex economic reality

    13 March 2025

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13483136/main.gif
    MEED Editorial
  • LIVE WEBINAR: GCC Projects Market 2025

    13 March 2025

    Register now

    Topic: GCC Projects Market 2025

    Date & time: 11:00 AM GST, 20 March 2025

    Agenda:

    • Introduction and overview of the GCC projects market
    • Data-driven historical and current performance
    • Top clients and contractors
    • Assessment of main market drivers
    • Summary of the Saudi gigaprojects programme
    • Market overview by country and sector
    • Market pipeline and outlook for 2025 and beyond
    • Key trends, opportunities and challenges
    • Selected major projects to watch
    • Q&A session

    Hosted by: Edward James, head of content and analysis at MEED

    A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemicals market. He is considered one of the world’s foremost experts on the Mena projects market. He is a regular guest commentator on Middle East issues for news channels such as the BBC, CNN and ABC News and is a regular speaker at events in the region. 

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13483162/main.gif
    MEED Editorial
  • Dubai property market rebounds in February

    13 March 2025

    Property prices in Dubai rebounded in February following a decline in January. Average property prices hit a record high of AED1,505 ($410) per square foot, reflecting a month-on-month increase of 1.41% or a rise of AED20.94 compared to January 2025, according to a statement from property agent Better Homes.

    The report also said there was a 17% increase in sales volume, reaching AED41bn across 14,929 transactions, marking a 15% month-on-month rise. This resurgence underscores Dubai's resilience and enduring appeal as a global property investment hub.

    The rebound comes just a month after a slight decline in property prices, which had marked the first decrease in over two years.

    In January, average prices fell by 0.57% to AED1,484 per square foot, raising concerns about market stabilisation. The February figures indicate that the market has quickly regained its momentum, driven primarily by a surge in off-plan properties, which accounted for 59% of all sales.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13483150/main.jpg
    Colin Foreman