Saudi Arabia: Yanbu Water Project to meet growing demand of water in kingdom
Saudi Arabia, with no permanent
rivers and limited groundwater, faces some of the world’s most pressing water
security challenges. As the population grows and urbanization accelerates,
demand for water is projected to approach 18 million cubic metres per day by
2030. To meet this demand, the Kingdom is transforming its water infrastructure
through public-private partnerships (PPPs), localization policies, and
sustainable technologies — all central to its Vision 2030 agenda.
A new benchmark: The Yanbu 4 Independent Water Project
A flagship initiative under this
strategy is the Yanbu 4 Independent Water Project (IWP). Located on the Red Sea
coast near the industrial city of Yanbu, the plant has a desalination capacity of
450,000 cubic metres per day, with 900,000 cubic metres of potable water
storage. It is designed to serve critical areas, including the holy cities of
Mecca and Medina.
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Delivered under a build-own-operate
(BOO) model, Yanbu 4 integrates advanced infrastructure, including:
- A 42 km transmission pipeline
- Operational storage facilities
- A dedicated energy network, featuring a 380/110 kV
substation and 110 transmission towers over 40 km
The project is operated by Yanbu International Water Company, a joint venture between Engie (40%), Mowah (30%), and Nesma (30%), with a 25-year concession. Commercial operations began on schedule in 2024, with a total investment of nearly SAR 3.3 billion.
Partnership and performance: A new PPP model
Unlike traditional state-funded
models, Yanbu 4 was delivered via a public-private partnership, with the Saudi Water Partnership Company (SWPC)
acting as the offtaker. This model offers private investors contractual
certainty and long-term returns, while allowing the government to expand
capacity without burdening public finances.
Local content requirements were
embedded from the outset:
- 40% during construction
- 50% in the first five years of operation
- Rising to 70% from year six onward
This strategy aligns with Vision
2030 goals by supporting local industry, creating jobs, and developing
technical expertise. Additionally, Yanbu 4 incorporates renewable energy
components to reduce the carbon footprint of desalination, contributing to the Saudi
Green Initiative (SGI).
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On
time, On budget, On vision
In a global environment where major
infrastructure projects frequently face delays and cost overruns, Yanbu 4
stands out for its on-time, on-budget delivery. This success was driven by a
clear PPP framework, effective risk allocation, and SWPC’s transparent
procurement process—reflecting international best practices.
A
model for the future
Yanbu 4 is more than a water plant —
it’s a blueprint for future infrastructure delivery in Saudi Arabia. It
demonstrates how carefully structured PPPs can deliver national priorities
efficiently while fostering local economic development and sustainability.
As demand continues to rise,
replicating this model across the Kingdom will be critical to ensuring water
resilience in both inland cities and key religious sites. For investors, it
signals strong, bankable opportunities in a sector of growing strategic
importance. For Saudi Arabia, it marks another step towards a diversified,
sustainable, and resilient future.
Source: Meed
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