Focus: Water

Splashing the Cash

Oct. 3, 2017

The government is working with the private sector to ensure the population is well hydrated through Vision 2030.

Water accessibility is a serious challenge in Saudi Arabia. Not only is the Kingdom considered one of the hottest, driest countries on the face of the Earth, but it is also the largest country without a single river running through its arid land. Moreover, with the local population set to increase by 25%, to 39 million, by the landmark year 2030, quenching Saudi's thirst is increasingly becoming a question of national security.

“But where there's a challenge, there's an opportunity," said the Minister of Environment, Water and Agriculture, Abdul Rahman Al-Fadli, on the sidelines of the Water Investment Forum. The minister inaugurated the two-day event, held in Riyadh in November 2016, with one strong message: Saudi's water industry would be opening its doors to private investors, and foreign capital is more than invited. Specifically, the newly merged ministry has set a target to double the volume of desalinated water produced in the Kingdom over the next 15 years. The desalination method accounts for the vast majority of water consumed in Saudi, with 29 operational plants pumping 4.6 million cubic meters daily. Yet, according to sources within the Ministry, in order to double production capacity, the industry is looking to attract up to USD53 billion in the coming years.
A major beneficiary to these reforms will be the Saline Water Conversion Corporation (SWCC), the government's entity responsible for desalinating seawater; also, incidentally, the biggest of its kind in the world. Speaking exclusively to The Business Year, SWCC Acting-Governor Ali Al-Hazmi highlighted the pace of these reforms by explaining that the Kingdom is aiming for 52% of desalinated water to be produced through strategic partners by 2020. For Al Hazmi, the former Sasref president brought in weeks before the investment forum to kickstart and oversee the privatization process, the challenge starts immediately. First, he argues, the organization must clean up its own act before it presents itself to investors, “As one would his own car before putting it on sale." Thus, throughout 2017 “we expect to continue improving the efficiency of SWCC plants, meeting the needs of our customers, and planning for future water demand. SWCC will continue to accelerate plans to prepare for its commercial role." Specifically, this will include “improving mechanical ability by 11% and the utilization of our facilities from 82-93% over the next 12 months."
By the end of March 2017, Al Hazmi expects to present a business plan to the minister, which will detail SWCC's future expansion and will be the private sector's cue to enter. “Many firms are interested, and we want to see a multinational consortium investing in the project. It would be good for the Kingdom because these firms would bring competition and high technical knowledge and standards. By working with others we can do better."