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UAE water investment broadens beyond desalination

8 April 2026

 

Desalination investment slowed in the UAE last year as awards in the segment fell to $400m, their lowest annual total since 2021.

Although overall market activity remained strong, reaching $3.4bn in total water sector awards, the only major desalination award in 2025 was the Saadiyat seawater reverse osmosis (SWRO) independent water plant (IWP) being developed by Spain’s Acciona.

This project accounted for 12% of total awards, reflecting a gradual decline in desalination investment over the past few years.

In 2024, the segment accounted for 22% of total water infrastructure awards. That figure was 25% in 2023 and 35% in 2022.

Tasreef programme

Beyond desalination, the market has been driven largely by transmission infrastructure over the past 12 months, most notably Dubai Municipality’s AED30bn ($8.1bn) Tasreef programme, which aims to strengthen stormwater drainage systems across the emirate for the next century.

In February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

These include two contracts awarded to local firm DeTech Contracting and one to China State Construction Engineering Corporation for stormwater drainage infrastructure. In addition, two consultancy contracts were awarded for the study and design of drainage systems in selected areas across the emirate.

Cumulatively valued at AED2.5bn, the new projects will serve 30 vital areas, spanning approximately 430 million square metres and supporting an estimated population of three million residents by 2040.

The latest deals build on an earlier package of projects awarded in April 2025 under phase one of the Tasreef programme. The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

Sewage treatment

While 2025 was a quiet year for sewage treatment contract awards, 2026 began with a key milestone as Ras Al-Khaimah awarded its first sewage treatment project under a public-private partnership (PPP).

The contract was awarded to a consortium of Abu Dhabi National Energy Company (Taqa), Saur (France) and Etihad Water & Electricity (UAE).

The $120m project involves developing a wastewater treatment plant with a capacity of 60,000 cubic metres a day (cm/d), expandable to 150,000 cm/d. 

The deal is seen as significant not just because it adds capacity, but because it establishes a repeatable template for future private sector participation in municipal infrastructure, a segment that has historically been harder to structure than power or desalination.

Cooling

According to MEED Projects, four cooling contracts were awarded last year, with total investment rising from $161m in 2024 to $205m in 2025.

The segment continues to be led by Empower, which holds more than 80% of Dubai’s district cooling market and operates at least 88 plants across the emirate.

Dubai Electricity & Water Authority (Dewa) now owns 80% of the company, having recently increased its stake in a $1.4bn deal.

In February, Empower announced it had begun the design of its fifth district cooling plant in Dubai’s Business Bay, as part of a wider scheme in the area with a total planned capacity of 451,540 refrigeration tonnes (RT).

The wider Business Bay development comprises nine plants, of which four are already operational and two are currently at the design stage.

Separately, last August, Empower signed a contract to design a $200m district cooling plant at Dubai Science Park, with a total capacity of 47,000 RT serving 80 buildings.

Project pipeline

Looking ahead, the tender pipeline points to sustained market activity, particularly in transmission and wastewater infrastructure.

A key near-term project is the Dubai Strategic Sewerage Tunnels (DSST) PPP, one of the emirate’s largest planned infrastructure schemes. Contracts for three packages are expected to be awarded in the coming months.

The masterplan covers the construction of two deep tunnel systems terminating at pump stations serving the Warsan and Jebel Ali sewage treatment plants (STPs). The scheme will convert Dubai’s sewerage network from a pumped system to a gravity-based system, helping the emirate replace ageing pumping stations and meet long-term capacity requirements.

The main contracts for the J and W packages are expected to be awarded first, with three consortiums in the running, while the Phase 2 Links package is currently under tender, with bids due on 30 June.

Transmission continues to dominate procurement, led by the tunnels scheme, accounting for $21.7bn under bid evaluation and $2.5bn at main contract bidding stage.

The wider pipeline also shows growing momentum in treatment, cooling and storage, underlining how investment is increasingly spread across the broader water infrastructure value chain.

This includes a major dam rehabilitation project in Hatta, covering four dams at Hatta, Ghabra, Al-Khattem and Suhaila, as well as the expansion of the Jebel Ali STP, which will add 100,000 cm/d of treatment capacity.

Dubai Municipality is also preparing to tender the main construction package for the Warsan STP later this year. While previously expected to be procured as a PPP, the project is now set to move forward as an engineering, procurement and construction (EPC) contract.

The focus of desalination activity, meanwhile, is on two upcoming projects being procured by Etihad Water & Electricity (EtihadWE). The first of these involves the construction of a $200m SWRO plant in Ras Al-Khaimah, which has already been put out to tender.

The second involves a $200m SWRO plant in Fujairah, estimated to cost $400m. The request for qualification (RFQ) documents were submitted last year, with the project expected to advance through procurement in the coming months.

Several desalination projects are also moving through construction, with the Shuweihat 4 IWP due to come online soon with a capacity of 318,225 cm/d, while at least three more plants are scheduled for commissioning next year.

Large-scale IPPs drive UAE power market

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Mark Dowdall

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