Egypt to expand PPP scheme to desalination

The economic arguments for desalination on Egypt's eastern seaboard have proved decisive. Feasibility studies are set to kick off in early 2010.

Egypt's Ministry of Housing, Utilities and Urban Development has announced a pipeline of desalination projects to be tendered by the country's PPP Central Unit from 2010 onwards.

Three projects have so far been announced, with a total capacity of 130,000m3/d (see table). Although the procurement strategy has yet to be finalised, the PPP Central Unit has indicated to GWI that a build-own-operate-transfer model - consistent with that adopted for MHUUD's greenfield wastewater treatment projects - is a strong possibility.

National Société Générale Bank is currently working on the syndicated loan to fund the first of those wastewater projects - the 100% privately owned New Cairo facility.

The strategic decision to prioritise seawater desalination over increased supply from the River Nile to targeted coastal areas is due to the comparatively greater cost of conveying the Nile water. Hurghada, for example, is located at the mouth of the Gulf of Suez, around 250km from the Nile.

The PPP Central Unit is expected to launch due diligence procedures for the respective desalination projects in the first quarter of 2010.

The delay is due to the fact that the procurement team will be launching tenders for two major wastewater treatment projects in late Q3 and early Q4 of this year (see PPP Tracker p56).

Moreover, the need to expand wastewater treatment in Egypt is more pressing than the drive to expand the potable water supply.

Nevertheless, many companies will be watching with interest now that MHUUD has signalled its long-term intentions.

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PPP: Public-Private Partnerships