The Kingdom leads the world in the production and consumption of desalinated water, and with an estimated SR91bn ($24.3bn) of expansion plans in the pipeline until 2020, as well as privatisation in the offing, the sector offers opportunities for a range of investors.


The notion of privatising the Saline Water Conversion Corporation (SWCC) has been debated for several years and the state-owned company, which is responsible for almost 60% of desalination in the Kingdom, has been making changes to its structure and operations to facilitate the move for some time. According to a Reuters report in January 2015, the proposal reportedly being studied involves the creation of a joint stock company with capital of SR60bn ($16bn), 30% of which will be floated on the Saudi Stock Exchange (Tadawul).

In its 2013 annual report, the Electricity and Cogeneration Regulatory Authority (ECRA) explained that SWCC’s reorganisation would result in a holding company, which would keep transportation, some production units and research and development in public hands, but allow partial private ownership of subsidiaries including plants serving Yanbu, Al Khobar, Khafji, Ras Al Khair, Jubail, Shuqaiq and Shuaibah. “The private sector share in the ownership of the subsidiary production companies will depend on the investment attractiveness of each plant,” the report states.

ECRA said that in time the transportation aspect of the corporation might also be turned into a company with some private involvement, either in a strategic partnership or through a public share offering. SWCC does not have a monopoly on desalination. In 2009 it produced 84% of the country’s desalinated water, but this share had fallen to just less than 60% by 2013, according to ECRA’s annual report. There are two other big players in the sector, Jubail Water and Power Company and Shuaibah Water and Electricity Company, which account for 13.1% and 14.4%, respectively, of production capacity in the Kingdom, with other suppliers making up the remaining 13.1%. In total there are 11 licensed suppliers in the market, including SWCC.


Saudi Arabia’s desalination plants use a number of different processes. According to figures from ECRA, 64% of desalination capacity relies on the multi-stage flash process (MSF), while 20% uses reverse osmosis (RO) and 16% is produced using multi-effect distillation (MED). The Shuaibah Water and Electricity Company plant uses MSF, while the Jubail Water and Power Company’s desalination centre uses MED. SWCC’s output relies on all three technologies, with 47.8% of its input to national capacity relying on MSF, 2.2% using MED and 9.5% based on RO.

The Marafiq independent water and power project (IWPP) also uses all three technologies, contributing 0.9%, 1.6% and 0.8% of national capacity using MED, MSF and RO, respectively. RO is also used by Shaqaiq Water and Electricity Company, Rabigh Arabian Water and Electricity, Shuaibah Expansion Company and Bouarej International Desalination Company, which collectively produce 9.6% of the Kingdom’s capacity.

SWCC also operates 16 plants with 36.8% of its production at Jubail, 16.7% at Shuaibah, 15.5% at Jeddah and 12.3% at Al Khobar. All the desalination facilities are all less than 35 years old. Approximately 30% of capacity is produced by plants that are more than 25 years old, with 42% of capacity supplied by units constructed in the five years to 2013.


ECRA reports that studies have shown SR300bn ($80bn) will need to be spent on desalination projects in the Kingdom over the next two decades, a scale of investment that will present numerous and attractive opportunities for private sector involvement in the growth and development of the sector.

The authority added that private companies will be able to participate in engineering, procurement and construction (EPC) tenders for SWCC schemes, as well as building independent projects when subsidiaries are privatised. It also sees potential for firms to bid for the construction, operation and maintenance of both pipelines and production plants and for the manufacture and supply of spare parts for desalination plants.

Recent Projects

In April 2014 production began at the new SR27bn ($7.2bn) Ras Al Khair desalination plant for SWCC, around 75 km north-west of Jubail on Saudi Arabia’s east coast. The facility will be able to produce 1.025m cu metres per day, making it the world’s biggest desalination facility when it is running at full production capacity. At that stage it will supply 800,000 cu metres per day to Riyadh, 100,000 to the Al Washm, Sudair, Majma, Al Zulfi and Al Ghat regions and a further 100,000 cu metres per day to regions north of the Eastern Province. The plant is a hybrid model using both the MSF technique and RO technologies. It has eight MSF units, built by Doosan Heavy Industries in Vietnam and South Korea, and 17 RO units. Offshore, 3-km discharge pipes have been built along with two 1.4-km breakwaters and a seawater intake pump house.

On Saudi Arabia’s Red Sea coast, work on the SR16bn ($4.3bn) Yanbu 3 desalination plant for SWCC is also under way. This will provide an additional 550,000 cu metres per day to 1.8m residents in the industrial city of Yanbu and to people in the Medina area. Doosan Heavy Industries and Construction of South Korea won the contract to build Yanbu 3. The plant will use six huge evaporators, each weighing almost 6000 tonnes. Four are being made in Vietnam and two in Saudi Arabia by Bilfal Heavy Industries. The $3bn EPC contract was awarded to a consortium including Shanghai Electric, Samsung Engineering and Al Toukhi Company. Construction work is due to be completed by March 2016.

In January 2015 a joint venture involving Riyadh’s ACWA Holding and Japanese engineering firms Itochu Corporation and Sasakura Engineering was awarded a $120m contract for the expansion of the Shuaibah 2 desalination plant. The 91,200-cu-metre-per-day plant will use MED with thermal vapour compression technology. Shuaibah 2 was first opened in 2003 and has the capacity to produce 880,000 cu metre per day.

In February 2015 global engineering consultancy Black and Veatch announced it had been chosen as the engineering and design consultant for SWCC’s Jeddah 4 desalination project, a 400,000-cu-metre-per-day RO plant designed to augment drinking water supplies to the city of Jeddah. Black and Veatch will be responsible for preparing studies of the site and sea conditions, and drawing up conceptual and engineering briefs for the scheme, as well as supporting SWCC.

In the Pipeline

Global Water Intelligence lists eight future projects for Saudi Arabia, which will increase total desalination capacity by 2.74m cu metres per day. Ranked according to capacity, and measured in cu metres per day, the projects are: Shuaibah 4 (650,000); Rabigh 4 (600,000); Jubail 4 (320,000); Al Khafji (300,000); Yanbu 4 (300,000); Khobar 4 (250,000); Khobar 5 (220,000); and Yanbu 5 (100,000).

Solar Desalination

As the number of new desalination projects in Saudi Arabia grows the Kingdom is also looking to try new technologies. In January 2015 Advanced Water Technology (AWT), a newly formed company based in Riyadh announced it would be working with Abengoa, a Spanish global technology firm, to develop the world’s first large desalination plant powered by solar energy. AWT, a subsidiary of Taqnia, which is a technology development and investment company owned by the Public Investment Fund, also draws on links with the King Abdulaziz City for Science and Technology (KACST) and the King Abdullah University of Science and Technology.

The new $130m plant is designed to deliver 60,000 cu metres per day to the city of Al Khafji in north-eastern Saudi Arabia and is due to come on-line in 2017. The desalination plant will use the RO technique and an associated 15-MW photovoltaic (PV) plant will provide all the facility’s power needs. The use of renewable energy will also reduce the plant’s operating costs. KACST predicts that this pilot project will pave the way for a future where desalination powered by renewable energy will replace fossil-fuel-powered desalination in the Kingdom from the late 2020s onwards. Both the desalination facility and the PV plant at Al Khafji are on sites owned by KACST, which will own the facilities when they have been completed. The intention is to build a 300,000-cu-metre-per-day solar-powered plant, possibly on the Red Sea coast, at a later date.


New ideas that could potentially revolutionise the use of renewable energy in desalination of water were also the focus of an international competition sponsored by Saudi Arabian Oil Company ( Saudi Aramco) and General Electric (GE). Four winning teams representing five countries were selected from 108 entries and received cash prizes at the Saudi Water and Power Forum in January 2015. The winners – from Italy, the US, Saudi Arabia, Singapore and the Netherlands – were offered the opportunity to develop their ideas with GE, Aramco Entrepreneurship and a range of Saudi organisations, IWPPs and businesses. According to Abdullah Al Bunaian, president and CEO of Marafiq, more is needed to support innovation in this space. “Saudi Arabia is producing 18% of the world’s total desalinated water,” he told OBG. “We should be investing in research and development so that we can become leading innovators of this technology, not just users.”