Egypt Seeks Support For $2.5bn Desalination Plan to Tackle Looming Water Scarcity

Egypt is trying its best to combact a looming water scarcity. The country is seeking partners to invest in a $2.5 billion initiative to build more than a dozen renewable energy-powered desalination plants by 2025.

The 17 new plants planned would run on solar and other green sources, with each built, owned and operated by Egypt’s sovereign wealth fund in partnership with a group of local and foreign investors.

According to the fund’s chief executive officer, Ayman Soliman, Egypt is keen to build a sustainable technology base to control its destiny when it comes to water security.

The wealth fund targets taking a minority stake in all the plants alongside the winning bidders”.

The Arab world’s most populous nation relies on the Nile River for almost all its fresh water and is confronting a yawning supply deficit that officials fear will be worsened by a giant hydropower dam Ethiopia is filling on the main tributary.

Population growth and climate change have also made Egypt vulnerable to water scarcity. The world needs to spend $6.7 trillion on water infrastructure by 2030, according to the United Nations, which says that around 1.2 billion people already live in areas of physical shortages.

Egypt, which needs about 114 billion cubic meters of water each year to cater for its more than 100 million people, receives only about half that from natural sources, according to the Irrigation Ministry. It addresses the shortfall by steps including recycling agricultural wastewater and groundwater and importing extra food instead of irrigating more crops.

The 17 plants, which are targeted to produce a combined 2.8 million cubic meters of desalinated water per day, are part of a broader plan to add 6.4 million cubic meters of daily capacity by 2050, Soliman said.

The ministries of housing, planning, finance and electricity are all involved, and the government will be the off-taker for the desalinated water at “competitive tariffs.”

Egypt was operating 76 desalination plants able to produce nearly 832,000 cubic meters per day as of May, according to the state-run Ahram Online news website.

Egypt’s first-ever sovereign fund, which was established in 2018, is modeled after initiatives in Malaysia and India. The fund aims to partner with the private sector and generate additional wealth from under-utilized state assets that it plans to manage.