United Arab Emirates Water Report Q4 2012
Business Monitor International, October 2012, Pages: 60
The United Arab Emirates Water Report provides industry professionals and strategists, corporate analysts, utilities associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on United Arab Emirates's water industry.
BMI View:
Abu Dhabi did not let water policy drift over the traditionally quiet summer months, and the confirmation of the plans for a new independent water and power project (IWPP) at Mirfa is a tonic for the sector and for international developers looking for project opportunities in the UAE. It remains to be seen what approach Dubai will adopt over our five-year forecast period; the emirate’s economy is starting to revive after a troubled three years, following the Dubai World debt crisis. Water demand should start to regain its historic trend, and the emirate’s authorities will need to find a solution to how it wants to finance the necessary investment.
Key themes to highlight for UAE’s water sector:
- After some mixed news for privately financed power and water projects in the UAE – headed by Dubai Electricity & Water Authority’s (DEWA’s) controversial cancellation of an independent power project (IPP) early in 2012 – the announcement of a new independent water and power project in Abu Dhabi will restore some confidence among private water developers.
The new IWPP at Mirfa, sponsored by Abu Dhabi Water & Electricity Authority (ADWEA),
will have a 53mn gallons-a-day (g/d) water desalination capacity, as well as 1,500 megawatts
(MW) of electricity generation. A 40% stake will be offered to the successful foreign bidder,
with a plant completion deadline set for 2016.
- ADWEA is refinancing the debt on the Suweihat II IWPP, with plans to issue an US$800bn bond, which would be used to repay some of the bank loans ahead of schedule, and then secure new loans at lower interest rates. Some lenders are expected to accept repayment terms rather than commit to lower interest rates.
- In summer 2012, the UK’s Mott MacDonald won an estimated AED2bn consultancy contract for services on building a pumping station as part of ADSSC’s Strategic Tunnels Enhancement Programme (Step). The pumping station will have a 3.3mn m3/d capacity, which will assist ADSSC complete the upgrade of the emirate’s sewage system.
- Dubai invited bids for an extended 26 August deadline on a contract to build water reservoirs with a 120mn gallon capacity at Lusaily. Bidders are mainly Gulf and Indian firms. Another 120mn gallon reservoir at Ghafat is due for completion in 2012.
- We have scaled back the amount of water we believe the UAE will produce over our five-year forecast period to 2016. Though demand remains robust (Dubai apart) across the federation, we no longer expect production to break the 200,000mn gallon level by the end of our forecast period in 2016. With the Mirfa IWPP due onstream that year, adding 53mn g/d of capacity to the Abu Dhabi water system, there will be an increase in capacity. However, this is some 7mn g/d short of the original target level, and leads us to revise down our production outlook. We still expect the UAE’s focus on private water development to ensure that supply will keep pace with demand, but much will depend on ADWEA’s ability to push through planned increases. So far,
its strategy is holding up well, giving us confidence in the future of the emirate’s water sector.
BMI Industry View 5
SWOT Analysis 7
United Arab Emirates Water Industry SWOT 7
United Arab Emirates Political SWOT 7
United Arab Emirates Economic SWOT 8
United Arab Emirates Business Environment SWOT 8
Market Overview 9
Domestic Competitive Landscape 9
Northern Emirates/Sharjah 13
Pricing Mechanisms And Regulatory Framework 15
Tariffs 16
Table: ADWEA’s Water Tariffs 16
Sectors 18
IWPPs 18
Desalination 19
Wastewater Treatment 19
Water Systems/Pipelines 20
Major Projects 23
IWPPs 23
Wastewater Treatment 24
Water Pipelines/Systems 26
Key Projects 28
Table: Major Projects 28
Table: Major Projects – Water 29
Industry Forecast Scenario 30
Table: UAE – Water Industry Historical Data And Industry Forecasts, 2008-2016 30
Table: UAE – Water Data by City ('000 cubic metres) 30
Table: Annual Water Production by Region (MG) 31
Table: UAE – Annual Water Supply By Company (MG) 1999-2006 32
Regional Risk Reward Ratings 33
Table: Regional Infrastructure Risk/Reward Ratings 38
Macroeconomic Data 39
Table: United Arab Emirates - Economic Activity 41
Company Profiles 42
Abu Dhabi Water & Electricity Authority (ADWEA) 42
Abu Dhabi National Energy Company (TAQA) 44
Suez Environnement 46
Veolia Water 48
BMI Water Forecast Modelling 50
How We Generate Our Industry Forecasts 50
Sources 51
Business Environment Ratings 51
Ratings Overview 51
United Arab Emirates Water Report Q4 2012
© Business Monitor International Ltd
Page 4
Table: Infrastructure Business Environment Indicators 52
Project Finance Ratings Methodology 53
Table: Design And Construction Phase 54
Table: Commissioning And Operating Phase – Commercial Construction 55
Table: Commissioning And Operating Phase – Energy And Utilities 57
Table: Commissioning And Operating Phase – Transport 58
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