Emerging markets sit at the frontline of global water stress – and at the forefront of innovative solutions.
Bahar Sezer-LongworthSenior Investment Specialist - Sustainability and Stewardship, Pictet Asset Management.
An hour’s drive south of Jeddah through the Saudi Arabian desert sits a massive industrial complex of countless concrete buildings, clusters of white dome-shaped storage tanks and pipes extending hundreds of metres into the blue-green waters of the Red Sea.
To anyone familiar with the region, it may look like just another oil refinery. But it turns out that within this huge facility sits the world’s most advanced water desalination operation, a high-efficiency, solar-powered plant that converts 600,000 cubic metres of seawater into drinking water every day. That is enough to meet as much as 40% of Jeddah's - and the surrounding region’s - freshwater needs.
What is distinctive about this Rabigh 3 complex, owned by Riyadh-based ACWA Power, is the technology it uses. Instead of deploying oil-fired thermal processing, it relies on reverse osmosis (RO), a purification method which squeezes seawater at high pressure through fine membranes, cutting energy use by 80% compared with traditional desalination methods used in the Gulf.
What’s more, the Rabigh 4, which will become operational later this year, will run on solar power during the day, drawing on the grid only at night. A dedicated photovoltaic facility – itself among the world’s biggest – helps reduce grid electricity consumption by roughly 45% and lower the carbon intensity of every litre of water produced.
ACWA Power develops and operates desalination plants across at least 14 countries in the Middle East, Africa and Central and Southeast Asia. The company aims to use seawater RO technology across all its desalination plants, up from roughly two thirds today. One of the flagship projects is the Taweelah plant in Abu Dhabi, which is over 40% bigger than the previous largest, which has capacity to produce nearly 1 million cubic metres of water a day.
Tapping into private capital
For all its remarkable achievements, however, ACWA Power is not an isolated success story. It is just one of a growing number of world-leading water technology companies based in emerging markets.
In developing markets, water services have traditionally been the responsibility of municipalities. But the scale of capital investment needed for new connections, network expansions and infrastructure upgrades at a time of stretched local budgets, presents private-sector companies based there with attractive opportunities to help finance, build and operate water infrastructure, drawing on their specialist expertise and technology.
What is happening in the Middle East is also unfolding in Latin America. There, the percentage of the population served by public-private partnerships is projected to grow to 35% by 2030 from the current 30%, putting the region above the global average.
