
According to a report by MEED, the total value of water infrastructure projects procured in the Middle East and North Africa (MENA) region in 2024 amounted to approximately $22.5 billion, a decline from the record $24.6 billion in 2023. Despite this decrease, the value of contracts awarded in 2024 still significantly surpassed the ten-year annual average of around $14 billion.
The report highlighted that while the overall outlook for water investments in the Gulf countries and beyond remains positive, trends across different sub-sectors in 2024 were not consistent. The value of transmission and distribution contracts decreased from $13 billion to $6.4 billion, whereas storage and reservoir contracts saw a significant rise, almost tripling to approximately $6.5 billion. This increase was mainly driven by the $4.7 billion Trojena Dam project in Saudi Arabia’s Neom mega-development.
The value of desalination plant contracts remained relatively stable at $4.1 billion, while the value of water treatment plant contracts saw a decline of 20%. Additionally, the value of district cooling plant contracts awarded in 2024 surpassed $1 billion.
Main Engines
Despite the slight slowdown, MEED reported that the main drivers of water infrastructure projects in the region have remained strong, if not further strengthened.
In addition to rapid population growth and economic expansion in some countries, factors like climate change and urbanization are increasing demand for water, despite efforts to curb consumption and decarbonize the sector.
According to Julio de la Rosa, Business Development Director – Middle East at Spanish contractor and investor Acciona, the slowdown in IWPP deals in 2024 for the Gulf countries may be due to a combination of market-specific factors.
Data from regional project tracker MEED Projects reveals that contracts worth $18 billion are under bid evaluation, $13 billion are under tender, and $36 billion are under prequalification. Additionally, $52 billion are in the study or design phases. Transmission and distribution projects make up 46% of the total $121 billion in active projects.
An increasing number of countries are adopting measures to boost water reuse and wastewater treatment as part of their decarbonization goals.
Utilities, developers, and contractors are also exploring key topics such as using renewable energy to power desalination plants and implementing smart or AI-powered water networks.
Entities like the Saudi Water Authority and mega-project developer NEOM are leveraging innovations such as zero-drain technology to enhance water management and sustainability.
While the effectiveness of these solutions may vary across regions, their wider adoption could help reduce implementation barriers, particularly in less affluent or politically unstable areas.
Serious Opportunities
MEED explained that the restructuring process has contributed to slowing the pace of project offerings in Saudi Arabia; however, the Kingdom remains the largest source of opportunities for water projects and investment in the sector.
The main buyers of water infrastructure in Saudi Arabia, the Saudi Water Partnership Company and the Water Transmission Company, procure desalination, wastewater treatment, and water transmission pipelines, using both public-private partnership models and EPC contracts.
The National Water Company in Saudi Arabia is also pursuing a privatization program, which involves contracts for the rehabilitation and maintenance of existing wastewater treatment plants, pumps, and collection networks.
Jordan’s Ministry of Water and Irrigation, alongside a consortium of developers led by French companies Meridian and Suez, has finalized a commercial agreement for a desalination and water transmission project between Aqaba and Amman. This agreement marks a significant development, especially given that only one consortium had submitted a bid for the project a year ago, making its progress uncertain at that time.
The $2 billion desalination and water transmission project between Aqaba and Amman is seen as a crucial boost to Jordan’s public utility infrastructure, which has been struggling due to a decade of underinvestment. Additionally, the country’s limited resources have been further strained by an influx of refugees fleeing conflict in neighboring countries.
In Dubai, the procurement process has begun for the region’s largest public-private partnership water infrastructure project to date: the $22 billion Dubai Strategic Sewerage Tunnels Project.
Dubai Municipality is also considering an $8 billion storm water treatment project, which would be developed using a public-private partnership model.
Less water-scarce countries in North Africa, such as Egypt, Morocco, and Tunisia, continue to offer water project opportunities as they work to serve growing populations, create jobs, establish new industries, and preserve groundwater resources while mitigating environmental impacts.
However, bidding procedures for planned desalination plants, especially those using the public-private partnership model, have generally been slower than in the Gulf States.
Rebuilding Infrastructure
The report notes that reconstruction efforts in conflict-ridden countries like Libya, Iraq, and possibly Syria will inevitably involve rebuilding water and sanitation infrastructure. However, these projects are unlikely to be a priority for most investors and contractors until a period of relative stability is achieved.
Efficiency of Water Treatment Plants
“Climate change is exacerbating the water crisis, highlighting the urgent need to secure water resources in the long term, and expanding industrial activities – especially in energy-intensive sectors – require advanced water management solutions,” says Julio de la Rosa, Business Development Director – Middle East at Spanish contractor and investor Acciona.
Structures such as green bonds, blended finance, or securitization of future water revenues can lower financial barriers for private companies. Additionally, investing in water management systems that incorporate the Internet of Things (IoT), AI-based technologies, and predictive analytics can enhance the efficiency of water and wastewater treatment plants while reducing costs.
Source: Al Qabas