Saudi Arabia allocates $7 billion to spend on water related projects in 2013
Kuwait Financial Centre “Markaz” has published the executive summary of its report on the Saudi Arabian water sector. The report notes that the Saudi Ministry of Water and Electricity has already pointed out that around $133 billion will be invested in the water and electricity sector in the coming decade.
The Saudi Government has set aside around $7 billion to spend on water sector related projects this year, and this is expected to go up as more projects are in pipeline, specially desalination and wastewater treatment projects. Yanbu phase 3 desalination project, which is currently in construction, is estimated to be worth $2 billion, another major desalination project is Ras Al-Khair desalination plant, which is worth $1.5 billion. Similarly billions of worth of wastewater treatment plants are in construction and in planning stage.
The Saudi Government also plans to produce almost 50 per cent of the country’s desalinated water using nuclear and renewable energy. Huge investments in this area are expected to happen in coming years.
Saudi Arabia prefers the private sector in operations and maintenance. In July 2002, the Supreme Economic Council passed a resolution, setting out a framework for private sector involvement in developing Independent Water and Power Projects (IWPPs). Electricity and Co-generation regulatory authority encourages private sector investment in water sector. The Water and Electricity company was created to work as an off-taker for desalinated water produced by privately operated desalination plants.
According to Markaz’s report, the average annual water consumption per capita is around 950 cubic metres in Saudi Arabia, compared with the global average consumption of about 500 cubic metres.
GCC countries, including Saudi Arabia, have been identified as the world’s most water-stressed countries, with very low amount of available water per capita. The groundwater level is continuously receding and water extraction is exceeding the availability of natural renewable water resources.
Desalination is the main source of water in Saudi. Even though this requires high amounts of energy to convert sea water into drinking water, it is still the most viable solution for the country. Saudi Arabia operates 27 desalination plants and produces close to 3 million cubic metres of water per day. The Kingdom is the world's largest desalinated water producer. However, alternatives are being sought to better manage this scarce resource. Some projects for wastewater treatment and recycling are planned.
Electricity prices were raised in 2010, and the Government announced that water prices are also set to rise sharply, from $0.03 per cubic metre to approximately US$1.30 per cubic metre for the lowest slab of consumption, said Markaz.