Water-scarce Egypt aims to more than quadruple its desalination capacity by giving private companies concessions from its sovereign wealth fund to build 17 plants over the next five years with sustainable solar energy.
The plan fits in with Egypt’s drive to diversify freshwater supplies for its rapidly growing population as it faces competition for water from the Nile River from a giant hydroelectric dam Ethiopia is building upstream.
The new concessions are designed to spur private investment and technological development, both areas in which the Arab world’s most populous country has struggled.
According to the fund’s executive director, Ayman Soliman, investments in the new desalination plants will start with the government guaranteeing the purchase of water and its resale to residential and industrial consumers at a deep discount, which will entail a large subsidy. He refused to estimate the amount of the subsidy.
The new plants will produce a total of 2.8 million cubic meters per day, which will double in the long term. According to the fund, Egypt currently has a desalination capacity of about 800,000 cubic meters per day, and by 2050 the government plans to reach 6.4 million cubic meters.
“We have already asked for proposals. What is happening is a combination of a competitive process and a limited negotiation process, ”Soliman told Reuters.
The military, which was used to develop infrastructure under President Abdel Fattah el-Sisi, has already built 27 desalination plants, and private firms have installed some in resorts along Egypt’s arid seashore.
Solar energy concessions
Under 25-year concessions, the firms will attract their own construction contractors and use high-performance renewable energy sources to generate energy. So far, the reaction from investors has been strong, Soliman said.
“We have received proposals to increase the required capacities. Investors want to build three times as much. “
The Welfare Fund hopes to reduce the estimated capital cost of about $ 1,000 per cubic meter of desalinated water by 20-25% through renewable energy, economies of scale in plant construction, and creative funding, including green finance.
Private resorts on the coast of Egypt’s Red and Mediterranean Seas, even golf courses, use expensive fossil fuels for desalination.
“If you live in a complex, you are talking about 13-18 (Egyptian) pounds (0.83-1.15 US dollars) per cubic meter, while government tariffs are a tenth of that amount. A large subsidy is currently being created, ”Soliman said.
The subsidy will be embedded as the difference between the cost that the government will pay to the holders of the concession for the water and the amount that the end user pays.
“Nile water is very cheap, but you want to diversify your dependence on water sources,” he said.
Local solar producer and utility company KarmSolar was one of the first to publicly announce that it plans to apply for the project. It says it is possible to cut costs by vertically integrating electricity, water and other utilities using renewable energy sources rather than selling a single service.
With solar power plants scattered across sun-drenched Egypt, KarmSolar began construction of a pilot desalination plant with a capacity of 200 cubic meters per day at Marsa Shagra on the southern coast of the Red Sea, where it used solar and diesel sources for supply for five years. electricity to local resorts.
“There are well digging machines and we have placed purchase orders,” said Ibrahim Metave, manager of the new plant, which is due to start pumping for customers in the first quarter of 2022.
Water wells are located close to the sea to reduce impact on the fragile marine environment. KarmSolar will then install turnkey reverse osmosis plants powered by both solar energy and electricity from the public grid.
Options being explored include filling trucks with excess water produced during the day to supply local construction sites, bottling it for sale, or simply storing it for off-peak use, such as at night.
Solar power will also be used to experiment with hydroponics for the cultivation of cucumbers, tomatoes and other products that resorts are currently bringing in from the Nile Valley, which is costly and has lost freshness.
“Mars Shagra already has small greenhouses,” Metave said.