Egypt outlines $15 billion desalination programme

Cairo has unveiled a staggeringly ambitious desalination programme to try to tackle its water woes. The hefty price tag will only be met with the support of private investors.

Egypt’s water starts to run short

Egypt’s booming population is putting its stretched water resources under increasing strain. With the population set to grow by 50% or more over the next 30 years, seawater desalination is seen as a priority.

Source: Shutterstock

Egypt’s water authorities have outlined a 30-year, $15 billion investment programme for desalination to meet the needs of the country’s rapidly growing population.

Speaking at a GWI projects event this month, the country’s central water utility body said that the significant use of private finance would be the only way to meet the full cost of the programme.

Egypt’s Holding Company for Water and Wastewater (HCWW), alongside the country’s Urban Communities Authority and Urban Planning Authority, has outlined a four-stage plan to address the country’s water deficit, which will involve a series of five-year building blocks between now and 2050.

How does Egypt’s $15bn desalination programme break down?

The country’s main infrastructure authorities have broken the desalination programme down into four major phases. Each phase will see desalination capacity-building split up into five-year blocks. The majority of funding will be used for smaller plants, which will replace surface water supplies around the Nile Delta and Suez Canal.

Phase	Description	Capacity built in five-year period (thousand m3/d)							Cost ($m)
		2025	2030	2035	2040	2045	2050	Total
1	Immediate potable water needs, organic population increase	312	1,355	220	212	189	-	2,288	3,120
2	Reduction of water transported to coastal regions	335	-	-	-	-	-	335	427
3	Alternative to surface water supplies	1,297	700	1,510	1,170	935	1,265	6,877	10,466
4	Water for new urban developments	50	171	162	303	190	90	966	1,230
	Total	1,994	2,226	1,892	1,685	1,314	1,355	10,466	15,243

Source: HCWW

Egypt’s water supply has already fallen below the 1,000m³/capita/year level that indicates water scarcity, and with a growing population and increasing international pressure on supplies from the Nile, the picture is set to worsen without action.

Dr Ahmed Moawed, vice chairman of the HCWW, said: “We are already within this water scarcity area, and with the population now expected to reach 150 or 180 million by the year 2050, that’s forced us to have an intensive programme to try to overcome this deficit and find other sources to compensate for fresh water from the Nile.”

With the total cost of the desalination programme expected to reach more than EGP240 billion ($15 billion), finding access to finance will be a key issue. While desalination awards to date have been made using publicly financed EPC contracts, Moawad said that private finance was considered to be a key point of the plan. Although he said the exact model for procuring privately financed contracts had not yet been decided – with direct awards from the government not ruled out – he said the New Cairo wastewater treatment plant contract awarded in 2010 was still a model, as the sole competitive privately financed contract to be awarded in Egypt’s water sector to date.

This would see a more traditional structure employed, with the appointment of external consultants and a transparent competitive bidding process that could take advantage of the record-low water tariffs that have become the norm in the regional desalination sector.

Speaking at the GWI seminar, Moawed said: “It’s not 100% sure yet, but some will be tendered, some will be directly awarded, for sure. We will be encouraging international companies to be involved. But whether it’s direct awards or tenders in all cases, the sovereign guarantee will be given by the ministry of finance, that’s for sure. The key thing will be the tariff, and who will be responsible for it.”

Companies are already beginning to position themselves to take advantage of investment opportunities in the market. This month, the joint venture between Hassan Allam Utilities and Abdul Latif Jameel water investment wing Almar Water announced that it had acquired the desalination portfolio of desal specialist Ridgewood Egypt. And earlier this month, UK-based emerging markets infrastructure fund Actis signed a memorandum of understanding with Egypt’s sovereign investment fund to back future projects, with water identified as a key outlet.<

Planned sites for Egypt’s 30-year desalination plan

Over the next 30 years, dozens of desalination plants will be built in coastal governorates of Egypt as the country looks to rebalance its water deficit.

Source: HCWW

The HCWW presented its plans for Egypt as part of GWI’s series of free regional project webinars. To find out more on the next sessions, visit https://bit.ly/2IHEJLu