KHALID BIN ZWAID ALQURESHI

Saudi Arabia 2020 | GREEN ECONOMY | INTERVIEW

Khalid bin Zwaid AlQureshi is CEO of Saudi Water Partnership Company.

Khalid bin Zwaid Al Qureshi
BIOGRAPHY
Khalid bin Zwaid Al Qureshi joined Saudi Water Partnership Company as CEO in June 2017. He holds degrees in chemical engineering and a master’s degree in water treatment from universities in Saudi Arabia and the UK.

Can you give us a brief overview of 2018's major highlights in the offtake segment of the water and electricity sector in Saudi Arabia?

2018 was a great and challenging year. It started with four calls for proposals being sent to the market with new mandates to cap energy usage and the addition of a local content requirement, according to which 40-50% of one's spending during the construction phase has to be done in Saudi Arabia. That bracket jumps to 50-70% during the operations and maintenance phases. Our first project was Rabigh 3 IWP, a 600,000cbm per day desalination plant to supply the Mecca region. After receiving 55 proposals, five consortiums eventually submitted firm bids. Big international names, such as ACWA Power, Marubeni, and Veolia, most of them in partnership with Saudi players, submitted strong, competitive bids with a winning price of SAR1.99 per cbm. At the time, it was the lowest price ever recorded worldwide for desalinated water. In the broader context of the Saudi market, where energy is subsidized, this process highlights a breakthrough that will change the industry, lowering prices by 30%.

What is your strategy for 2019 and beyond?

We are currently giving an opportunity to new bidders that want to enter the market. By mid-2019, we plan to have three more independent water projects (IWP). Moreover, we have received submissions in response to our request for qualifications with respect to the development of a new independent sewage treatment plant (ISTP) in Taif. Our market analysis of long-term capacity planning based on demand and supply gaps clearly identifies a growing need for desalination plants, and we have listed more than 10 plants that need to come online before 2025. At the same time, we have another 10 sewage treatment plants and strategic tanks that need to be launched into the market. We will announce these new projects in 2019 and 2020. We are also assessing the feasibility of the PPP model for small STPs and water transmission pipelines.

What opportunities does the market offer in the water management and power generation sectors?

We have a huge pipeline of projects that continues to grow, which means the market offers many opportunities for different types of investors. The market is bound to become more competitive, given the recent 30-40% price reduction, which will also lead to greater efficiency in the equity versus debt financing structure. Moreover, the National Center of Privatization has developed manuals and guidelines for private-sector participation, which will make the process faster and attract more foreign players. The current focus on transparency gives the Saudi environment greater credibility, and we expect this to attract an even higher number of players in the future.

What technological progress has been made in the water and energy nexus?

From an energy standpoint, sewage plant energy consumption is limited, and the impact of energy on the price of treated water is less than 10%. For seawater, however, the energy needed for reverse osmosis makes up more than 35-40% of the operating costs, which is fairly substantial. As a result, people are starting to look toward mixing water and renewable energy. The competitive nature of the market will force developers to consider new ways to reduce the cost of energy. What we will be considering in future projects is encouraging the developer to include renewable energy options at the plant; this will have the effect of reducing overall production costs even further.

What are your priorities moving forward?

Our overall priority is to meet the Kingdom's demand for water while working in partnership with the private sector. We are now at an implementation phase whereby all stakeholders need to be aligned. Privatization is crucial to our success, and it will be based on our long-term supply plans that we develop with direction from the Ministry of Environment, Water, and Agriculture.