Dewa, Acwa sign $478m deal to expand world's largest desalination plant

Summary

• Dewa and Acwa signed a $478 million agreement for Hassyan desalination phase two.
• The 30-year deal adds 272,000 cubic metres per day of reverse osmosis capacity.
• Completion would make Hassyan the world's largest SWRO plant at 240 MIGD.

The latest

A $478 million water purchase and shareholder agreement signed between Dubai Electricity and Water Authority and Acwa will fund the second phase of the Hassyan seawater reverse osmosis complex. The AED1.76 billion deal runs for 30 years and adds 272,000 cubic metres per day of capacity. Dewa chief executive Saeed Mohammed Al Tayer said the addition will make Hassyan the world's largest SWRO plant.

Details

• The structure: Two agreements were signed, a water purchase agreement and a shareholder agreement, together valued at AED1.76 billion, equivalent to $478 million. A project company will handle development, financing, construction and operation of the new desalination plant rather than Dewa building it directly.
• The ownership: Dewa holds a 60% stake in the project company and Acwa holds the remaining 40%. The arrangement keeps the utility as majority shareholder while transferring part of the financing and construction burden to its Saudi partner under a producer model.
• The capacity: Phase two will be developed with a production capacity of 272,000 cubic metres per day, equivalent to 60 MIGD. That addition lifts the Hassyan complex to a total of 240 MIGD, which Dewa says will make it the largest seawater reverse osmosis facility in the world.
• The first phase: Phase two complements a 180 MIGD first phase developed at an investment of AED3.36 billion, or $914 million. Dewa describes that earlier stage as its first project built on the Independent Water Producer model, in which a private partner finances and operates the asset under a long-term offtake contract.
• The emirate target: Once both phases are complete, Dubai's total desalinated water production capacity is projected to reach approximately 735 MIGD by 2029, according to Dewa. The figure covers the emirate's full desalination fleet rather than the Hassyan complex alone.
• The signatories: The agreement was signed by Saeed Mohammed Al Tayer, managing director and chief executive of Dewa, and Mohammad Abunayyan, founder and chairman of Acwa. Al Tayer framed the expansion around the scale milestone the completed complex would reach.
• The contract term: The water purchase agreement runs for 30 years, binding Dewa to offtake from the project company over that period. The terms of the tariff, the financing structure and the lenders behind the project were not disclosed in the announcement.
• The timeline: No construction start date or commercial operation date for phase two was announced, and the statement did not set out a schedule between signature and first output. The only forward date given is the 2029 reference point for the emirate's overall capacity target.

Background

Reverse osmosis forces seawater through membranes under pressure, consuming less energy than older thermal desalination plants that boil water using power-station heat. Gulf utilities have been shifting toward the technology, and Dewa's Hassyan complex is its flagship application of the model.

Between the lines

The ownership split and the 30-year offtake term point to a financing strategy rather than a simple procurement: Dewa keeps control at 60% while the project company carries development, financing, construction and operation. Having used the Independent Water Producer model on phase one at $914 million, the utility is repeating it on a smaller, cheaper increment, with phase two costing roughly half as much per unit of stated capacity.

What's next

Watch for the project company's financial close and the naming of lenders, a construction start date for phase two, and whether Dewa confirms progress toward the 735 MIGD emirate-wide target set for 2029.

Source: Gulf Daily News / TradeArabia News Service