Water-scarce Egypt aims to more than quadruple desalination capacity by granting private companies concessions from its sovereign wealth fund to build 17 plants over the next five years with sustainable solar energy.
The government of Egypt is planning to avoid future water stress by spending some $2.5bn on new desalination capacity over the next five years.
The plan is to use the country’s sovereign wealth fund to attract private investment in the plants, which will be built and operated over 25 years by private sector concessionaires
The plan fits into Egypt's push to diversify its sources of fresh water for a fast-growing population as it faces competition for Nile river water from the giant hydropower dam that Ethiopia is building upstream.
Investment in new desalination plants would be kick-started with the government guaranteeing to buy the water and re-sell it to domestic and industrial consumers at a steep discount that would entail a large subsidy, according to fund chief executive Ayman Soliman. He declined to estimate the size of the subsidy.
The new plants would produce a combined 2.8 million cubic metres a day, an amount that would be doubled longer term. Egypt now has installed a desalination capacity of around 800,000 cubic metres a day and the government is targeting 6.4 million cubic metres by 2050, according to figures from the fund.
Ayman Soliman, the chief executive of the Sovereign Fund of Egypt, told the Reuters news agency that the government would agree to buy the water produced and distribute it to users at a discounted price.
He said the procurement process had already begun. “We’ve already solicited offers. What’s happening is a combination between a competitive process and a limited negotiation process.”
He added that investors had been eager to participate in the plan.
“We’ve received offers to build whatever capacity we need. There is investor appetite to build three times as much,” he said.
Local solar energy producer and utility company KarmSolar was one of the first to say publicly it plans to bid for a portion of the project.
It says it can cut costs by vertically integrating electricity, water and other utilities using renewables rather than acting as a single-service seller.
With solar plants scattered around sun-drenched Egypt, KarmSolar has begun building a 200-cubic-metre-per-day pilot desalination plant at Marsa Shagra on the southern Red Sea coast, where for five years it has used solar and diesel sources to supply electricity to local resorts.
"The machines for digging the wells are there, and we've put the orders for the procurement," said Ibrahim Metawe, manager of the new plant, which is to begin pumping to clients by the first quarter of 2022.