Firms vie for $3bn Egyptian desalination deals By Andy Sambidge May 9, 2023 Reuters/Nir Elias Egypt plans to add a further 14 desalination plants to add to its existing 82 to improve water availability A 2021 Unicef report said Egypt could run out of water by 2025 Saudi’s ACWA Power among companies bidding for $3bn deals Plans to increase water capacity by up to 15% this year International companies are vying for lucrative contracts in Egypt as the country embarks on a multi-billion dollar plan to develop desalination plants to help offset a looming water crisis. The Sovereign Fund of Egypt has pre-qualified 17 consortia – comprising a mix of local and global firms – to be invited to tender for developing the plants, which will be powered by renewable energy sources across the country. The first phase of the water desalination programme, estimated to cost $3 billion, will include several projects covering a capacity of 3.35 million cubic metres (m3) per day by 2025. Total capacity of 8.85 million m3/day is planned by 2050. How Egypt can address its water challenges Desalination spend on the rise in race against water crisis Renewable energy desalination is the way forward for GCC states Saudi-based ACWA Power is one of the pre-qualified companies. In 2022 it added 2.4 million m3/day of water desalination capacity across four reverse osmosis projects, the largest in a calendar year in the company’s history. This year it expects to add at least three more projects to increase its capacity by up to 15 percent. Investment across the Middle East and North Africa currently accounts for 48 percent of global desalination projects. Egypt’s 2037 National Water Resources Plan foresees about $50 billion in investment to improve water availability. A further 14 desalination plants will be built to add to the existing 82. Experts expect further investment this year and beyond, although the country’s economic struggles may impact project financing. Walid Rassi, managing director at Dubai-based consultancy Elements 2H2 and member of the Mena Clean Energy Business Council, said that country specific macro-risks will remain the biggest challenge to investors. “A double-edged sword is the devaluation of local currency that could become an opportunity or a threat to project financing and revenues,” he said. He added: “Geopolitical landscapes dictate the need of desalination plants such as the initiatives in Egypt, the most populous country in the Mena region. This is mainly driven by the new water security and supply constraints that are being imposed by the massive upstream Nile dam project in Ethiopia.” Fitch Solutions analysts agreed, saying: “Alongside GCC markets, continued water uncertainty in Egypt will ensure continued desalination project efforts in the market.” Egypt, which hosted Cop27 and is trying to boost lagging investment in renewables, depends almost entirely on the Nile for fresh water and faces rising water scarcity for its population of over 100 million. A 2021 Unicef report said the country could run out of water by 2025.