Boston, MA -- (SBWIRE) -- 04/30/2014 -- Saudi Arabia has solidified its position as a major player in the global water infrastructure market, as it has begun to alleviate the pressure on its limited water resources caused by economic and population growth. However, water shortages could still occur, and the effects of industrial over-consumption will continue to intensify. In addition to the basic provision of water services to the public, an expansionary economic policy, active construction sector and water intensive operational developments in the oil and gas industry create an increased urgency. In order to cater for this, the government must ramp up its already-impressive project pipeline for the sector.
Backed by a multi-billion dollar infrastructure expenditure programme, Saudi Arabia is ploughing resources into its water sector and prioritising contractor awards across the key desalination, waste water and network areas. The government is planning to invest around SAR134bn (US$35.72bn) in several water and electricity projects in 2014. SAR100bn (US$26.65bn) will be invested in power projects and SAR34bn (US $9.06bn) for water projects, according to Water and Electricity Minister Abdul Rahman al-Hussein. The projects will be funded through an interest-free government loan of SAR70bn (US$18.66bn) and by local banks and private sector investments. The government is also planning to divide its state-owned Saudi Electricity Company into four different firms in a bid to manage and fulfil the demands of the new projects.
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The most favourable aspect of the Saudi landscape is the abundance of liquidity and the willingness of key projects sponsors and utilities to furnish this on what is a critical economic sector in a country where water resources are highly restricted yet demand continues to grow. The increasing attractiveness of the Saudi water sector is highlighted by the widespread international interest it generates, and the fact that various international water management and water infrastructure groups are keen to enter the water sector in Saudi Arabia. For example, Japan recently announced it was seeking greater involvement, particularly via product distribution.
The big news for the country's water sector is the start of solar-powered desalination from 2014, following in the UAE's footsteps, in conjunction with potential nuclear powered desalination facilities. These are particularly important developments as, although expensive to set up and run, the use of solar energy will free up more hydrocarbons for export, allowing the country to recoup its expenses and increase exports over the longer term. Moreover, nuclear could offer stable long-term alternatives that, if successful, could be lucratively marketed to damper, less sunny climes.
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