How PPP is helping MENA meet its water challenges

Water is perhaps the region’s most scarce commodity, but creating potable water for rising populations also raises environmental concerns

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The UAE will host the world’s most influential climate change event, COP28, next week. It is a fitting location for discussions about environmental degradation – the region is home to 15 out of 20 of the world’s most water-scarce nations, while some of its countries face existential threats due to high temperatures.

The Middle East and North Africa (MENA) is the world’s most water-scarce region according to UNICEF, while factors such as rapid population growth, unsustainable water management, and ongoing conflicts are set to worsen local water challenges.

Desalination – the process of removing salt from seawater – is increasingly being used to tackle water resource challenges. The Gulf countries account for 60% of global water desalination capacity, producing around 40% of the total desalinated water in the world, through over 400 desalination plants across the region.

By 2030, desalination capacity in Gulf countries is expected to almost double, supported by a public sector push to foster resilience and diversify economies.

Saudi Arabia’s desalination capacity, for example, is set to increase from 5.6 million cubic metres per day in 2022 to 8.5 million cubic metres per day in 2025, accounting for more than 90% of the country’s water consumption, according to figures from French research body Ifri. The same holds true for the UAE, Kuwait, Bahrain and Israel, where the production of desalinated water will more than double by 2030.

PPP funding for water resilience 

The PPP model has historically been the prominent method of procurement for desalination capacity in the region, and continues to demonstrate its effectiveness in assuring competitive, efficient implementation of independent water projects (IWPs).


Angela Croker, partner at law firm Norton Rose Fulbright in Dubai, notes: “Given the growing demand for water and the real need for a significant increase in fresh water supply, governments in the region are turning to the PPP model to finance desalination projects and we expect to continue to see an increasing number of PPP desalination deals coming through in the next year.”

Saudi Arabia continues to lead the charge on developing desalination projects, having recently announced 12 major desalination projects valued at over $1.3bn across strategic areas in the kingdom.  


Phil Hanson, partner at law firm Herbert Smith Freehills, says he expects a continuation of IWP announcements in the next year in Saudi Arabia. Additionally, he expects the kingdom’s $6.7bn new water transmission programme to accelerate in the next 12 months as part of plans to improve potable water delivery to meet future demand.

The kingdom is already home to a raft of major desalination plants, while the soon-to-be-built Rabigh 4 Desalination Plant reached financial close in October this year. Set to be operational by Q1 2026, Rabigh 4 will process 600,000 cubic metres per day and utilise seawater reverse osmosis technology.

In the UAE, a request for proposals (RFP) was issued in July 2023 for Abu Dhabi Islands Reverse Osmosis Plants, after 41 developers and consortiums submitted expressions of interest. Responses to the RFP are due by the end of Q4 2023.

The Dubai Electricity & Water Authority recently appointed a consortium of companies to provide consultancy services on its reverse osmosis seawater desalination plant in Hassyan. Private partners will operate and maintain the plant. The authority has a goal of producing 100% of Dubai’s desalinated water production from a mix that combines renewable energy sources and waste heat by 2030. The Hassyan project will become operational in phases in 2025 and 2026.

Further afield in the region, Egypt plans to increase desalinated water supply by 8.8 million cubic metres of water daily by 2050. The European Bank for Reconstruction and Development and the International Finance Corporation are working with the Egyptian government to support the PPP financing of four seawater desalination plants.

Croker says that she sees “significant growth potential” in Egypt, which is among the world’s most water-stressed countries. However, she adds that while desalination is a solution for the region’s water needs, it can also cause a problem from an environmental point of view.

“Most forms of desalination are energy intensive,” Croker continues. “In reverse osmosis plants, applying the required pressure to get the seawater through the membranes takes significant energy… its high energy consumption remains an issue."

Another significant challenge is the disposal of the waste product of the desalination process (the brine). This is typically returned to the sea, which causes unnaturally high salinity and is detrimental to sea life and the underwater environment.

Croker points to the fact that technologies continue to develop rapidly in this space, with solutions being developed to harvest these critical elements from the brine. Saudi Arabia’s Neom smart city is leading developments in this field, with plans to build a state-of-the-art processing and harvesting facility integrated with a desalination plant.

Such developments will help carve the way for more desalination plants – under the PPP model and otherwise – that fall in line with growing global emissions reductions and energy efficiency guidelines.

Hanson agrees there are a number of technical idiosyncrasies that distinguish desalination projects from standard energy projects.

“Seawater conditions and quality, outtake and intake pipeline requirements, and the need to source power either from the grid, or as seen more recently, from self-generation via solar panels, all present their own challenges and opportunities”, he explains.

Looking ahead, the regional outlook for the desalination PPP sector is robust, underpinned by strong government commitment, regional desalination experience and, most critically, severe water resource challenges. Private sector expertise - as well as finance - will be important in the sector’s development, as new solutions and ideas are needed to deliver projects that provide the potable water required, while at the same time reducing wider environmental impacts.