Doing Business in Saudi Arabia - International Franchise Association

Water Resources Equipment – WRE
Overview Return to top
2008 2009 2010
(estimated)
Total Market Size 496 521.0 547
Total Local Production 88 92.0 97
Total Exports 22 23.5 25
Total Imports 408 429.0 450
Imports from the U.S. 163 171.0 180
Saudi Arabia lies in an arid area of the world with severe climate conditions, and an absence of
permanent natural surface water resources such as rivers and lakes. In addition, Saudi
Arabia’s high population growth, rapid urbanization, industrialization and agricultural
development make water one of the most precious resources in the Kingdom. In order to meet
expected demand growth for water, the Kingdom will have to invest $5 billion a year in
infrastructure development over the next 20 years.
Saudi Arabia has established 30 desalination plants on the Red Sea and Arabian Gulf coasts at
a total cost of $20.2 billion. The country is rapidly depleting its 2.2 billion cubic meters of proven
groundwater. 23% of water comes from aquifers, 70% from desalination and 7% from
wastewater reclamation. 80% of water has been used in questionable agriculture projects,
such as the world’s most heavily subsidized wheat production. 30% of household water comes
from desalinating. Saudi Arabia is the biggest user of desalinated water in the world (36% of
world’s total), and demand is growing by at least 3.4% year. While the cost of desalination is
falling, it still costs $1.33 to process, deliver and remove the waste from one cubic meter of such
water, while a Saudi consumer pays only 4 cents. The Ministry of Water and Electricity
(MOWE) announces study after study to rationalize water tariffs and privatize the state owned
Saline Water Conversation Corporation (SWCC).
With its budget surplus, the Saudi Government is working on a number of large projects,
primarily in the water and sewage system, in an attempt to meet the needs posed by population
growth and industrial growth. Major infrastructure projects include the construction of a 28 new
water distribution network, 21 new the desalination plants, the refurbishment of the Jeddah
desalination Plant-5, the expansion of Asir II desalination plant, Yanbu/Medina III desalination
plants, and the expansion of wastewater treatment plants in Jeddah, Riyadh, and Dammam.
In 2003, the Saudi Government brought the Kingdom’s water and power sectors under a single
authority, the Ministry of Water and Electricity (MOWE). The governing body sets forth general
policies and strategies that aim to expand and improve Saudi Arabia’s basic utilities. More
specifically, the Ministry has issued guidelines for the operation of Saudi Arabia’s Independent
Water and Power Projects (IWPPs).
Further, MOWE has established a regulatory authority to help implement its policies, as well as
corporations to develop new power and water projects. Also in 2001, the Royal Commission
for Jubail and Yanbu founded the Power & Water Utility Company for Jubail and Yanbu, known