Industrial Diversification Drives Saudi Power and Water Mega Investment

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Looking past the current economic troubles of Southern Europe, the slowdown in the growth of China and India, and the resulting confused ragbag of short-term forecasts, Saudi Arabia and some of its regional neighbors in the Middle East are driving on with exponential growth plans in the water and power sectors, knowing that it is a now-or-never opportunity to diversify from hydrocarbon income streams and create a viable industrial development base for the future.

Saudi Arabia's water affairs ministry reports that the country is set to invest $133 billion in the two related sectors over the next 10 years. At the opening of the 8th Water, Electricity and Power Generation forum, the ministry said that water project investments would total $53 billion by 2022, and power projects would total $80 billion.

The annual demand for water is estimated to grow at a rate of 7-8%, which is one of the highest rates globally. Parallel to new project growth, the Saudis continue to pursue a program to reduce water wastage loss to 5% annually. Currently, wastage represents 20% of public water consumption.

With some of the lowest water tariffs in the world, the total consumption is estimated to be 7 million cubic meters daily, with 3.3 million cubic meters coming from desalination plants on the Red Sea and Arabian Gulf coasts.

Three macro desalination plants, scheduled for operation in 2015, are currently under construction, requiring a total investment of $18 billion. These will be followed by new plants worth $5 billion. The project build is driven by an expected growth in water demand of 300% annually in the near future.

At the forum, discussions took place highlighting evolving opportunities in the water and power sectors, along with sessions on maximizing cooperation between all stakeholders and the promising potential of nuclear-powered desalination projects.

For related information, see May 10, 2012, article - Saudis Plan 41,000 Megawatts of Solar for 121,000-Megawatt Demand Through 2032.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.