Global Water Market 2011: United Arab Emirates

Transcription

1 Global Water Market 2011: United Arab Emirates Abu Dhabi, Dubai, Sharjah and the Northern Emirates Chapters from Global Water Market 2011 i

2 Global Water Market 2011 // Table of contents Global Water Market 2011: United Arab Emirates Global Water Market 2011 represents the largest piece of work ever undertaken by the research team at Global Water Intelligence. Comprising three volumes, it aims to be the essential reference work for executives planning an international strategy in the water industry. For too long the water industry has been hidden away beneath local government, local politics, local catchments and local conventions. Outsiders are unwelcome. It has made the industry inefficient, opaque and unprofitable for all those without the right connections. We want Global Water Market 2011 to be your first connection to new markets, helping to deliver the step change in performance that the water industry so badly needs. The countries selected for detailed profiles generally represent the most significant water markets in the world. To give our readers easy access to the regional information that interests them most, we are now providing these in-depth country profiles as individual reports. Full datasets are available for those who buy Global Water Market If you have any ideas for future research directions, do send an to our Head of Research Jablanka Uzelac Alternatively, if you wish to have our research team undertake a bespoke research project for you, then please get in touch. 43. United Arab Emirates, Abu Dhabi 43.1 Demographic indicators (all emirates) 858 Figure 43.1 Population indicators, United Arab Emirates 858 Figure 43.2 Economic indicators, United Arab Emirates Introduction The UAE 858 Figure 43.3 Population and area of each of the United Arab Emirates 858 Figure 43.4 Water resources in the United Arab Emirates Abu Dhabi Overview of challenges Water sector organisation and structure Government ministries and agencies Companies 860 Figure 43.5 Organisation of the water and electricity sector in Abu Dhabi Supply and demand detail Water supply 861 Figure 43.6 Water resources: types, volumes and status in 1960 and Sectoral water use 862 Figure 43.7 Sectoral water use by source in Abu Dhabi, Figure 43.8 Users of desalinated water in Abu Dhabi, Municipal water and wastewater infrastructure 863 Figure 43.9 Mean water peak demand forecasts Water treatment plants Desalination 864 Figure Ownership structure of the Fujairah F2 IWPP 865 Figure IWPPs in Abu Dhabi Wastewater treatment plants 866 Figure Production of treated wastewater in Abu Dhabi 867 Figure Projected generation of treated effluent by population growth scenario, Water reuse Water in industry 868 Figure ADNOC Group company annual water consumption for Water finance Tariffs 869 Figure ADWEA water tariffs Operating expenditure Capital expenditure 870 Figure Provisional capex allowance assumptions for water expenditure, Government s water strategy Private sector participation Current and future projects Wastewater infrastructure 870 ii

3 Figure Current and future WWTP projects in Abu Dhabi Desalination 872 Figure Current and future desalination projects in Abu Dhabi Tracked projects in the UAE (all Emirates) 873 Figure Tracked desalination projects in the United Arab Emirates 873 Figure Tracked reuse projects in the United Arab Emirates Market forecast Abu Dhabi Nuclear energy in desalination First Water Conservation Law 877 Figure Market forecast, Figure Market forecast breakdown, Figure Market forecast data, ($ million) United Arab Emirates, Dubai 44.1 Introduction Overview of challenges Water sector organisation and structure Government ministries and agencies Supply and demand detail Water supply 882 Figure 44.1 Dubai: Water supply sources, Sectoral water use 883 Figure 44.2 Water consumption in Dubai, Municipal water and wastewater infrastructure Water treatment plants Desalination 883 Figure 44.3 The design capacity of power and desalination plants in Dubai, Wastewater treatment plants Water reuse Water in industry Water finance Tariffs 884 Figure 44.4 DEWA s slab tariff system, Operating expenditure Capital expenditure Government s water strategy Private sector participation Current and future projects 886 Figure 44.5 Current and future desalination projects in Dubai 886 Figure 44.6 Future WWTP projects in Dubai Market forecast United Arab Emirates, Sharjah and the Northern Emirates 45.1 Introduction Overview of challenges Water sector organisation and structure Government ministries and agencies Companies Supply and demand details Water supply 888 Figure 45.1 Water supply in Sharjah, Figure 45.2 Water production in the Northern Emirates, Sectoral water use 890 Figure 45.3 Drinking water consumption by end user in Sharjah, Figure 45.4 Potable water consumers in the Northern Emirates, Municipal water and wastewater infrastructure Water treatment plants Desalination 891 iii

4 Global Water Market 2011 // Table of contents Figure 45.5 Desalination plants in Sharjah, Figure 45.6 Water production by desalination plant in the Northern Emirates, Wastewater treatment plants Water reuse Water in industry Water finance Tariffs 892 Figure 45.7 FEWA and SEWA water tariffs Government s water strategy Private sector participation Current and future projects 893 Figure 45.8 Current and future desalination projects 894 Figure 45.9 Current and future WWTP projects in Sharjah and the Northern Emirates Market forecast 895 General publication information Forecast methodology Unit conversion factors used in Global Water Market 2011 Exchange rates used in Global Water Market 2011 Global Water Market 2011 references Other publications available from GWI Individual country chapters from Global Water Market 2011 are available to download now Desalination Markets 2010 Municipal Water Reuse Markets 2010 Water Technology Markets iv

5 Global Water Market 2011 // Middle East 43. United Arab Emirates, Abu Dhabi 43.1 Demographic indicators (all emirates) Figure 43.1 Population indicators, United Arab Emirates Demographic indicator Urban Population 3.58 million 4.24 million Rural Population 1.01 million 1.13 million Total Population 4.59 million 5.38 million Urban population growth rate 2.93% 2.32% Rural population growth rate 2.54% 1.42% Total population growth rate 3.06% 2.24% Source: UN, World Population Prospects: The 2006 Revision and World Urbanization Prospects: The 2007 Revision (medium variant). Figure 43.2 Economic indicators, United Arab Emirates Economic indicator (2008) Nominal GDP GDP at PPP Total GDP $262.2 billion $185.3 billion GDP per capita $55,028 $38,894 GDP growth rate 7.41% Source: IMF, World Economic Outlook Database, October Introduction The UAE The United Arab Emirates (UAE) is located in the south-east of the Arabian Peninsula, bordering Oman and Saudi Arabia. The UAE is a federation of 7 emirates: Abu Dhabi, Dubai, Sharjah, Ras al-khaimah, Fujairah, Umm al-quwain and Ajman. Figure 43.3 Population and area of each of the United Arab Emirates Emirate Population Area (million) (thousand km ² ) Abu Dhabi Dubai Sharjah Ras al-khaimah Fujairah Umm al-quwain Ajman Figure 43.4 Water resources in the United Arab Emirates Water resource Volume (km³/yr) Source Renewable natural resources Groundwater (renewable, actual) 0.12 km³/yr FAO AQUASTAT, 2010 Surface water (renewable, actual) 0.15 km³/yr FAO AQUASTAT, 2010 Total water resources (renewable, actual)* 0.15 km³/yr FAO AQUASTAT, 2010 Higher quality nonconventional resources Desalination 3.10 km³/yr Global Water Market 2011, GWI Reuse - tertiary or better 0.33 km³/yr Global Water Market 2011, GWI Total nonconventional resources 3.43 km³/yr * This may not be the total of groundwater + surface water because of overlap between surface water and groundwater resources, non-exploitable surface water, or irrigation water running back into rivers / aquifers to be counted twice. Sources: Given in table 858

6 United Arab Emirates, Abu Dhabi // Overview of challenges Abu Dhabi The Emirate of Abu Dhabi, the largest of the seven emirates, represents 85% of the total land area. Abu Dhabi city and Al Ain are the 2 largest cities in the Abu Dhabi Emirates, and Abu Dhabi city is the capital of the UAE. Al Ain was developed near the border of Oman around a desert oasis approximately 160 km east of Abu Dhabi Overview of challenges A major challenge that Abu Dhabi is facing is coping with predicted population growth. Up to 2030, the population is predicted to grow by an average of 50% every 7 years. The additional independent water and power project (IWPP) capacity that is required to meet predicted demand in is beyond what has currently been contracted. The serious decline of groundwater levels given uncontrolled abstraction is another challenge. The emirate s groundwater consumption exceeds the natural recharging capacity by 24 times. According to the Environment Agency Abu Dhabi (EAD), groundwater supply in the emirate had decreased by 18% since 2003, and it would not be possible to sustain the current levels of abstraction for more than 50 years. Per capita water consumption in Abu Dhabi is approximately 0.35 m³/d, which is one of the highest in the world. In fact, the demand for fresh water is more than 20 times greater than total renewable water in the emirate. Such high consumption of water is attributed to the following factors: Expansion of water demand for agriculture and forestry Social and political pressures to maintain the low price of water, discouraging water conservation for domestic purposes High leakage in the water distribution system Lack of control over drilling of wells (more than 100,000 abstraction sites) In the coming years, an important challenge for water resource management in the UAE will be the passing of the first Water Conservation Law in the country. Current water regulations are of regional scope. The new law will set the system for water use and management in the whole of the UAE, and will regulate it. The law aims to integrate water resource management by, for example, grouping the regional utility companies across the UAE under one body. One of its emphases will be to regulate the misuse of water. By March 2010 the final draft of the law is being revised by a ministerial and technical committee, in order to be sent to the Cabinet around mid It is expected that the law would be passed the year after Water sector organisation and structure Government ministries and agencies The UAE Ministry of Environment and Water aims to develop and sustain the UAE s water resources, using integrated management to rationalise consuming of underground water [and to] develop alternative resources. It is an umbrella institution for each of the emirates environmental institutions. The Abu Dhabi Water and Electricity Authority (ADWEA) supplies bulk water and electricity in Abu Dhabi. ADWEA, a public organisation owned by the government of Abu Dhabi, is also responsible for implementation of government policies concerning the water sector. ADWEA holds a number of subsidiaries that operate in different areas of the water and electricity sector. The Regulation and Supervision Bureau (RSB) is an independent regulator that was established by the Abu Dhabi government in The RSB regulates the activities of companies in the water, wastewater and electricity sector in Abu Dhabi. Amongst its general duties are ensuring the security of water and electricity supply, publishing information relating to standards of performance, taking account of national and international environmental standards, promoting competition in the water and electricity sector, as well as protecting the interests of consumers. The following agencies play important roles in the water and wastewater sector: Abu Dhabi Water and Electricity Company (ADWEC) is the Single Buyer and Seller of water and power operating under power and water purchase agreements (PWPAs). ADWEC is responsible for capacity planning based on their demand forecasts as well as supply/demand control through sales contracts. Based on the demand forecasts for water and electricity, ADWEC publishes a statement of future capacity requirements, which is published on an annual basis. Abu Dhabi Sewerage Services Company (ADSSC) was established in 2005 and provides sewerage services in Abu Dhabi. ADSSC is responsible for wastewater collection and treatment, and safe disposal of solid waste. ADSSC has developed a master plan for treated wastewater reuse in Abu Dhabi. 859

7 Global Water Market 2011 // Middle East Abu Dhabi Transmission and Dispatch Company (TRANSCO) is responsible for the development, operation and maintenance of the water transmission and distribution networks for water and electricity supplies. Recently, TRANSCO has begun operations in the Northern Emirates. Abu Dhabi Distribution Company (ADDC) commenced operations in It is responsible for the distribution and sales of water and electricity in the Abu Dhabi municipality and in the Western Region (Al Gharbia). Al Ain Distribution Company (AADC) began operating in 1999, and is responsible for the distribution and sales of water and electricity in the Abu Dhabi municipality and in the Eastern Region (excluding Abu Dhabi city). AADC serves about 100,000 billed customers. Al Mirfa Power Company (AMPC) is responsible for the operation of power plants at Al Mirfa, Madinat Zayed and Al Ain. The company operated in accordance with a 25-year licence issued in 1998 by the RSB. Water and electricity are sold to ADWEC. Bainounah Power Company (BPC) commenced operations in 1999, and is responsible for the operation of power and desalination plants in Abu Dhabi city, Al Ain and Taweelah. These plants have a design capacity of 200,000 m³/d and 1,216 MW. Water and electricity are sold to ADWEC Companies A long-term initiative in Abu Dhabi is greater private sector involvement in the water sector. The Abu Dhabi government and ADWEA established 7 independent IWPP projects on a BOO basis, in the form of joint-ventures between ADWEA and various international companies. In each IWPP, ADWEA retains 60% of the total shares and the remaining shares are retained by private investors. Water and electricity produced by the 7 IWPPs is sold to ADWEC. The 7 IWPP companies, which are regulated by the RSB, are listed below: Emirates CMS Power Company (ECPC): Owns and operates the Al Taweelah A2 power and desalination plant, which has a design capacity of 227,000 m³/d and 710 MW. ECPC is under a 20-year agreement with ADWEC, and is owned by ADWEA (60%) and CMS Generation (40%). Gulf Total Tractebel Power Company (GTTPC): Operates the Al Taweelah A1 power and desalination plant, which has a design capacity of 386,000 m³/d and 1,350 MW. GTTPC is under a 2-year agreement with ADWEC, and is owned by ADWEA (6%), Abu Dhabi National Energy Company (TAQA) (54%), Total Fina Elf (20%) and Tractebel (20%). Arabian Power Company (APC): Established to operate and maintain existing power generation and desalination plants as well as building and operating additional facilities at Umm Al Nar, which has a design capacity of 727,000 m³/d and 2,200 MW. APC is owned by ADWEA (60%), International Power (20%), Tokyo Electric Power Company (14%), and Mistui (6%). Shuweihat CMS International Power Company (SCIPCO): Operates the Shuweihat 1(S1) power and desalination plant at Jebel Dhana, which commenced operations in June 2005 and has a design capacity of 459,000 m³/d and 1,500 MW. SCIPCO is owned by TAQA (54%), ADWEA (6%), International Power (20%), and Sumitomo (20%). Taweelah Asia Power Company (TAPCO): Established to operate and maintain the existing power and desalination plant at the Al Taweelah B site. TAPCO was also responsible for constructing, financing and operating additional capacity at the site on a BOO basis. Al Taweelah B extension was commissioned in July 2008, and has a design capacity of 736,000 m³/d and 2,000 MW. It is the largest IWPP developed to date in Abu Dhabi. TAPCO is owned by TAQA (54%), ADWEA (6%), Marubeni Corp (14%), BTU Group (10%), Powertek Berhad (10%) and JGC Corp (6%). Emirates Sembcorp Water and Power Company (ESPWC): Operates and maintains Fujairah F1 power and desalination plant at Qidfa, with a design capacity of 455,000 m³/d and 861 MW. A large proportion of the desalinated water is transported to the Emirate of Abu Dhabi by TRANSCO. Fujairah Asia Power Company (FAPCO): Established to construct and operate the Fujairah F2 power and desalination plant, which has a design capacity of 591,000 m³/d and 2,000 MW. The plant is expected to come online in mid FAPCO is owned by ADWEA (60%), Marubeni (20%) and International Power (20%). In addition to these 7 IWPPs, the Ruwais Power Company s Shuweihat (S2) power and desalination plant has reached financial close. The project will operate under a 25-year PWPA, and is expected to be commissioned in 2011 with a capacity of 459,000 m³/d and 1,700 MW. ADWEA have a 60% share of the project, followed by GdF Suez Energy International (20%) and Marubeni (20%). 860

8 United Arab Emirates, Abu Dhabi // Supply and demand detail Figure 43.5 Organisation of the water and electricity sector in Abu Dhabi Power & Water Producers Power and Water Purchase Agreements (PWPAs) Water Transmission Abu Dhabi Water and Electricity Company (ADWEC) (single buyer and seller of water and electricity) TRANSCO (transmission of water) Bulk Supply Tariff (BST) Agreement Use of System Charge Agreement Distribution Companies Water and Electricity Distribution Subsidy (if any) Tariffs Water Distribution Consumers Flow of Payments Flow of Products Source: ADWEC 43.5 Supply and demand detail Water supply Although Abu Dhabi s groundwater supply is limited, brackish groundwater and desalinated water make up the majority of water resources in the emirate (70.7% and 24% respectively). Desalinated water is mostly for domestic purposes, while brackish groundwater is mainly used for agriculture and forestry. Treated wastewater from WWTPs, which accounts for 4.8% of water resources, is often used for gardening. The table below summarises the status of water resources in 1960 and

9 Global Water Market 2011 // Middle East Figure 43.6 Water resources: types, volumes and status in 1960 and 2007 Water Resources Volume (million m³) Status Stocks Groundwater (fresh) Groundwater 30,000 94,000 26,000 89,000 Mined from storage, as natural annual recharge is negligible. Constraints are cost and quality. Annual mining is subject to demand. Moderately brackish water (moderately brackish) with TDS of more than 15,000 ppm may be used for commercial horticulture. Groundwater (brackish) 138, ,000 TDS range is 6,000 15,000 ppm, limiting the use to a very specific range of plants and trees. Generated Desalination Negligible 1,044/yr Renewable and able to be expanded. However, cost and environmental impacts are a concern. Treated sewage effluent Negligible 400/yr Renewable and can be expanded. Resource is dependent on desalinated water used for domestic purposes. Aesthetic issues constrain use to irrigation. Naturally renewable Source: EAD, 2009 Rainfall and inflows 24/yr 24/yr Highly variable from year to year. Generally, groundwater is recharged from surface runoff in the eastern region, travelling to the west and north-west towards the Arabian Gulf. Groundwater with TDS of less than 1,500 ppm is obtained in belts along the eastern region bordering Oman, as well as in a large basin in the Liwa (Beda Zayed area) Sectoral water use Total water consumption in Abu Dhabi in 2007 was estimated to be approximately 3,000 million m³/yr. Of the total water consumption in Abu Dhabi, agriculture and forestry account for 75%, while amenities (landscaping and roadside plantations) account for 6%. This means that, in total, over 80% of water use is for vegetation. Domestic water consumption has increased by 38% between 2003 and 2006, while water for forestry decreased by 40.3% during the same period. Water consumption in general decreased by 7.6% between 2003 and Figure 43.7 Sectoral water use by source in Abu Dhabi, ,500 Faljs million m³/yr 1, Treated sewage effluent Desalination Groundwater Agriculture Forests Amenities Domestic Livestock Industry Lost Source: EAD,

10 United Arab Emirates, Abu Dhabi // Municipal water and wastewater infrastructure Water sources (million m³/yr) Sector Use Treated Groundwater Desalination wastewater Faljs Total Agriculture 1, ,489 Forestry Amenities Domestic Livestock Industry Losses Total 2, ,125 Source: EAD, 2009 Between the late 1970s and 1996, an average of approximately 14 million m³/yr of groundwater was abstracted for domestic supply. However, due to the deterioration of water quality (with nitrate and boron) and the high pumping cost with the decline of the water table, groundwater now accounts for a very small proportion of domestic supplies. Desalination provides for almost all domestic (366 million m³/yr) and industrial water supplies (46 million m³/yr), with some supplements by some small-scale RO plants drawing on groundwater. The graph below shows the users of desalinated water in 2008 according to ADWEC. Figure 43.8 Users of desalinated water in Abu Dhabi, 2008 Parks and streets 25 million m³/yr Industry and mega projects 25 million m³/yr Farms 41 million m³/yr Other 115 million m³/yr Forestry 49 million m³/yr 412 million m³/yr Total volume of desalinated water (2008) Villa gardens 58 million m³/yr Residential 99 million m³/yr Source: ADWEC, Municipal water and wastewater infrastructure The population of Abu Dhabi enjoys nearly universal coverage of water supply (more than 99%). In both urban and rural areas, 98% of connections have meters. According to the ADWEC Winter 2008/2009 peak water demand forecast (Miller, 2008), there will be a significant increase in demand for municipal water supply between 2010 and However, it is important to note that the figures are based on the assumption that TRANSCO s water network constraints will be removed by 2012 (i.e. greater water supply). 863

11 Global Water Market 2011 // Middle East Figure 43.9 Mean water peak demand forecasts 6 5 Year Forecast peak water demand (million m³/d) million m³/d Source: Miller, Water treatment plants There are no major WTPs in Adu Dhabi, as all potable water is provided through desalination. There are, however, some polishing plants attached to some WWTPs in royal palaces, for example. These polishing plants treat the effluent to almost potable standard Desalination There are around 70 desalination plants in Abu Dhabi, including industrial facilities. Desalination was first installed and operated in the 1960s by the Abu Dhabi government in order to supplement groundwater supplies. Dependency on desalinated water grew steadily due to the decline of both the groundwater quality and the water table. According to the Environment Agency, Abu Dhabi s desalination capacity expanded by more than 360% between 1998 and Each of Abu Dhabi s IWPPs is based on 60% government ownership of the project company, and long-term off-take arrangements backed by strong demand growth for power and water. An example of the typical ownership structure of IWPPs in Abu Dhabi is provided in the following figure. 864

12 United Arab Emirates, Abu Dhabi // Municipal water and wastewater infrastructure Figure Ownership structure of the Fujairah F2 IWPP International Power 50% Marubeni 50% Fujairah F2 joint venture 40% 60% Fujairah Water & Electricity Company 100% ADWEA Fujairah Asia Power Company Long Term Service Agreement O & M Agreement Management Fujaiah F2 O&M Company 50% International Power 50% Marubeni Maintenance contract for parts and services RO O&M sub-contract Alstom Power O&M Ltd OEMs and other maintenance contractors Veolia Water AMI Membrane supply agreement Membrane supplier Source: FAPCO The UAE s six other emirates have chosen not to use the IWPP procurement method for new desalination capacity. The main desalination plants in Abu Dhabi are part of seven IWPPs constructed and operated by APC, TAPCO, GTTPC, ECPC, SCIPCO, ESWPC, and FAPCO respectively (for further information see section ). Mirfa power and desalination station is another main desalination facility which is operated by AMPC. At the end of 2007, the total design capacity of major desalination plants was 1,044 million m³/d, while the actual volume produced was 847 million m³/d. There are some small desalination facilities with thermal technologies serving remote areas and oil production sites. The lack of storage capacity in the desalination water transmission system (only 1 or 2 days water supply) makes the Emirate of Abu Dhabi vulnerable to accidents such as oil spills or facility failures. 865

13 Global Water Market 2011 // Middle East Figure IWPPs in Abu Dhabi Company Arabian power Company (APC) Plant Design capacity Commission (m³/d) date Umm Al Nar West , Umm Al Nar East B 91, Umm Al Nar West , Umm Al Nar new (Sas Al Nakhl) 432,000 Various Total 659,000 Mirfa 177, Al Mirfa Power Company (AMPC) TAP1997CO Taweelah B1 318, Taweelah B2 105, Taweelah B Extension 314, Total 737, GTTPC Taweelah A1 386, ECPC Taweelah A2 232, SCIPCO Shuweihat S1 459, Shuweihat S2 459, ESWPC Fujairah F1 464, FAPCO Fujairah F2 590, Source: GWI (2010) Taweelah is located 45 km north of Abu Dhabi city and in relatively close proximity to large-scale development sites such as Reem Island and Yas Island. Its location is considered to be favourable for supplying the areas with the highest projected water demand growth in the emirate over the next 5 years. Ensuring sufficient capacity in seawater intake is considered to be the main challenge for the Taweelah site Wastewater treatment plants The main organisation responsible for wastewater services is the ADSSC. Nearly 5,300 km of gravity sewers, 250 pumping stations, and 500 km of rising mains is owned and maintained by the ADSSC. The 2 main WWTPs that serve Abu Dhabi are listed below. Previously, both plants were operating beyond their design capacity. Mafraq WTP was established in 1982 in order to serve Abu Dhabi Island and the mainland. It has a design capacity of 360,000 m³/d, with a peak flow of 475,000 m³/d. Zakher WTP came into operation in 1980, and it serves the Al Ain city and its suburbs. It has a design capacity of 85,000 m³/d and treats an average flow of 105,000 m³/d and a daily peak flow of 124,000 m³. Gravity sewers account for 87% of the total sewage collection network, while sewage and treated effluent rising mains account for the remaining 10% and 3%, respectively. The sewer system has been expanded gradually over the last 30 years. Although sewer age varies, the gravity sewers are on average 17 years old. Moreover, approximately half of the total length of sewer network on Abu Dhabi Island (530 km) was constructed before the 1990s. The pipe conditions vary according to the quality of the material used. According to ADSSC, leakage is not a major problem, but infiltration of brackish groundwater can make a significant impact on effluent quality. This is because it can affect the whole biochemical processing of the sewage at the WWTPs. The following figure outlines all of the WWTPs in Abu Dhabi. 866

14 United Arab Emirates, Abu Dhabi // Municipal water and wastewater infrastructure Figure Production of treated wastewater in Abu Dhabi Region WWTP Production (million m ³ /yr) Eastern Region Al Ain STP-M4 (Al Zakher) Al Hayer Al Quo a Al Wagan Shuwaib Al Khazna Wadi Flaie Sweihan Remah Al Dhahira Bu karriyyah Al Faqah Seih Gharaba Al Araad Seih Geheriba Al Sa a Under construction Total Western Region Mafraq Madinat Zayed Mirfa Ghayathi Ww T Plant Baaya-Sila Delma Island Bainoona Ghantoot Al Khatim Canning factory Mirfa Sir Bani Yas Island Abu Al Abyad Island Ghuwaifat Liwa Under construction Total Total treated wastewater production Source: Environment Agency Abu Dhabi, water statistics

15 Global Water Market 2011 // Middle East Figure Projected generation of treated effluent by population growth scenario, High population growth Medium population growth Low population growth million m³/yr Wastewater generated (million m³/yr) by population growth scenario Year Medium Low growth High growth growth Source: EAD Water reuse Despite its recognition as a key strategy for minimising the risk of water scarcity, the actual reuse of treated wastewater has been limited to 84 million m³/yr, or 56.3% of the total volume of treated wastewater (150 million m³/yr) in Abu Dhabi. The remaining is disposed to the Arabian Gulf. Mafraq and Zakhar WWTPs output irrigates around 20 km² of landscape areas Water in industry The industrial water uses in Abu Dhabi can be classified into 3 categories: Process water: Water of a high quality that is close to potable level, often used for processing as a feedstock or a solvent. Wash water: Water of a moderate quality (from potable to more inferior), depending on the type of industry. It becomes contaminated with particulate or soluble matter after use. Cooling water: Usually seawater in the case of Abu Dhabi, without any direct contact with the product. It is often used in once-through cooling devices. The largest industry in Abu Dhabi is the oil and gas industry. The UAE is ranked the 8th largest oil producer, with the production of 3,046 barrels/d. In fact, Abu Dhabi is the principal oil producer of all emirates, owning 95% of the oil and 92% of gas in the UAE (which is equivalent to approximately 9% of oil reserves and 5% of natural gas in the world). Also, agriculture and foodprocessing have expanded in recent years. Abu Dhabi National Oil Co. (ADNOC) was established in 1971 and is one of the top 10 international oil companies. In fact, 80% of the emirate s GDP is represented by the activities of ADNOC. It is wholly government owned, and is involved in upstream to downstream activities, from oil exploration, production to marketing and exportation. However, the ADNOC Group holds about 17 subsidiaries that are partly or wholly joint-ventures. The total water consumption of the ADNOC group is shown in the following figure. 868

16 United Arab Emirates, Abu Dhabi // Water finance Figure ADNOC Group company annual water consumption for 2006 Desalinated (industry) 3.58 million Desalinated (drinking) million m³ Oil produced water million m³ Shallow groundwater 3.20 million m³ Treated effluent 1.16 million m³ 1, million m³ Water consumption (2006) Type of water million m³/yr % Treated effluent % Shallow groundwater % Desalinated Industry % Drinking % (Oil produced water) % Raw seawater 1, % Total 1, % Raw seawater 1, million m³ Source: EAD, Water finance Since 1998, the private sector has invested approximately $13 billion in Abu Dhabi s water and power projects, including the 7 IWPPs that delivered a desalination capacity of 3.3 million m³/d. ADWEA continues to promote the financing mechanism, under which the public entity holds 60% of the project company and a private company or consortium holds 40%, for procuring new power and water infrastructures Tariffs The table below summarises the water tariffs of ADEWA s customers. A fixed volumetric tariff system is employed for metered customers. Domestic water for UAE nationals is free of charge, providing little incentives for water conservation. Figure ADWEA water tariffs Customer Tariff ($/m³) UAE nationals domestic 0.00 Non-UAE nationals domestic 0.60 Industrial / commercial 0.60 Government and schools 0.60 Farms 0.60 Tanker distribution (remote areas) 0.30 Tanker distribution (other areas) 0.60 Residence without meters 13.61/month $1 = EAD 3.67.Source: RSB figures quoted in EAD, 2009 Financing the water sector in Abu Dhabi has not been entirely efficient, due to the expansive use of high quality desalinated water for gardening, landscaping and irrigation. The EAD suggests that there is a high level of hidden subsidies in the current tariff structure, which is necessary for operating and maintaining the systems Operating expenditure The water sector requires a large amount of hidden subsidies in order to finance its operation and maintenance. However, the detail of the financing is opaque. 869

17 Global Water Market 2011 // Middle East Capital expenditure Figure Provisional capex allowance assumptions for water expenditure, AADC Water ADDC Water TRANSCO Water $ million $ million TRANSCO Water ADDC Water AADC Water Total Source: PRSB 2005 price control review 43.9 Government s water strategy The Plan Abu Dhabi 2030 was published in September Approved by the Abu Dhabi Executive Council, the plan places great emphasis on water conservation, harvesting and reuse, as well as energy and thermal efficiency. In particular, there has been a strong emphasis on the greater use of treated wastewater, as the government of Abu Dhabi is committed to achieving 100% water reuse by The RSB, along with public consultations, is currently developing new regulations on trade effluent control and wastewater residual reuse in Abu Dhabi. The new regulation will provide the solid framework for sustainable wastewater reuse. It is likely that RSB will require companies to obtain licenses in order to install trade effluent control and wastewater residual reuse. ADWEA has also developed a long-term initiative for greater public participation in the water and electricity sector. Two new policy initiatives were developed during the period The Regulation and Registration of Real property in the Emirate of Abu Dhabi (Registration Law) and Property Ownership in the Emirate of Abu Dhabi (Ownership Law) were amended in 2005 in order to liberalise the legislation on land ownership, shifting construction into the hands of private companies. Such legislation changes have resulted in 33 mega-projects located along the coast of Abu Dhabi Island Private sector participation The private sector has had an increasingly important role in water generation and supply in Abu Dhabi since the water sector underwent significant re-structuring in both the late 1980s and in The government stepped back from its supplier role to emphasise its position as a regulator of the sector. While the private sector participates in tenders and licenses in water projects and engages in PPPs, the government still retains the majority stake of these partnerships (represented by its investment arm TAQA). Important examples of this are the IWPP projects, which are private initiatives in the Abu Dhabi water sector that are promoted by the government. Another example is the participation of more than 25 companies in the mineral/bottled water market, many of which are PPPs. Regarding desalination, policy in Abu Dhabi was amended in 2000 in order to transfer the O&M of desalination plants to private entities under long-term management contracts. By 2007, 96% of such plants had been divested to the private sector. RSB ensures the water quality and security of supply. Given that desalination activity is widespread in Abu Dhabi, disposal of the resulting brine (especially from small desalination plants) has become an issue. The government plans to set up a joint organisation with the private sector that would be in charge of collecting, treating and disposing of brine Current and future projects Wastewater infrastructure In , ADWEA awarded 2 large contracts for a cumulative capacity of 800,000 m³/d. The ADSSC is currently undertaking a 25-year build-own-operate-transfer (BOOT) contract for the $2.5 billion Strategic Tunnel Enhancement Programme (STEP). The programme entails constructing a 40 km deep tunnel sewer (DTS) with a m 870

18 United Arab Emirates, Abu Dhabi // Current and future projects diameter. The DTS will serve Abu Dhabi Island, as well as the mainland in close proximity to the island where new property developments are taking place. The project will be divided into 3 parts, each of which will be tendered separately. The first contract was awarded to Impregilo in September 2009, who will build a 15.6 km tunnel from Mussafah to Mafraq. 3 bidders presented proposals for the second contract by the 23 April 2009, while 5 bidders presented proposals for the third contract by the 7 May Both remaining contracts had not been awarded by January The project as a whole is expected to be completed by December Figure Current and future WWTP projects in Abu Dhabi Category Plant Capacity Status Construction scheduled to be completed in mid Abu Dhabi 300,000 m³/d Awarded to a consortium of Veolia and Besix at the end of July Bridging loan secured in January Replaced in September 2009 for long-term financing from banks for $407 million Al Ain 130,000 m³/d Awarded to a consortium of Veolia and Besix at the end of July Bridging loan secured in January Replaced in September 2009 for long-term financing from banks for $407 million The 25-year BOOT contract, including the 2.5 year construction period, is worth $817 million. The average tariff over the contractual term is $0.48/m³ (AED1.77m³). ADWEA takes 60% of the equity of the project company, while Veolia and Besix will hold equal shares of the remaining 40%. Currently under construction. Commissioning is scheduled for Q Al Wathba, south of Abu Dhabi city Al Saad, serving Al Ain 300,000 m³/d Awarded to consortium of Biwater and Emirates Utilities Company Holding (EUCH, a joint venture between Al Qudra Holding and Utilities Development Company Holdings) in December ,000 m³/d Awarded to consortium of Biwater and Emirates Utilities Company Holding (EUCH) in December year BOOT. The total value of the package is approximately $400m. The tariff is understood to be $0.41/m³ (AED 1.52/m³). Supplementary membrane bio-reactor (MBR) plants for the interim period until larger conventional WWTPs are commissioned. Abu Dhabi 2 x 7,500 m³/d (under planning as of January 2008). 1 x 50,000 m³/d SBR (being built alongside the existing plant at the Mafraq site). 1 x 25,000 m³/d industrial WWTP (in agreement with Industrial City of Abu Dhabi (ICAD) to hive off some wastewater, an escape route to relieve the overloaded Mafraq plant) Al Ain 3 x 5,000 m³/d currently in operation, 2 x 7,500 m³/d (under planning). Other planned WWTPs Masdar 7,000-9,000 m³/d Geohydrology studies underway Saadiyat Island The first phase covers a plant with capacity 19,500m³/d, a 24,100m³/d pumping station and a 700mm pipeline. First phase submission deadline Oct Source: GWI,

19 Global Water Market 2011 // Middle East Desalination Contrary to previous expectations, ADWEA will procure its next major power generation at Shuweihat rather than Taweelah. Rather than include new desalination capacity at Shuweihat 3 (S3), ADWEA has instead decided to tender S3 during 2010 as the emirate s first independent power project (IPP). This decision marks a significant, if temporary, shift away from the IWPP model in Abu Dhabi. The relatively lower capital cost of an IPP and the prospect of a fast-track procurement process are likely to have influenced ADWEA s decision. ADWEA is planning to tender a fourth IWPP at Taweelah after the 1,500 MW S3 plant has been procured. Taweelah is seen as a more suitable setting than Shuweihat for the planned new desalination capacity because of its proximity to centres where water demand growth is projected to be greatest over the next 5 years. Taweelah is 45 km north of Abu Dhabi city, and 85 km south of Dubai City, and is relatively close to large-scale developments such as Reem Island and Yas Island. Enhancing desalination capacity at the Shuweihat site (250 km south-west of Abu Dhabi city) would have entailed significantly greater investment in water transmission infrastructure. Figure Current and future desalination projects in Abu Dhabi Project Type Capacity Cost Status Abu Dhabi, Desert Islands Desalination Precise water requirements are still to be set out by the TDIC Mott MacDonald is advising the TDIC. No timeline proposed. Fujairah 1 SWRO Desalination Expansion of the existing Tender to be launched soon expansion 170,000 m³/d SWRO section of the hybrid plant Masdar Desalination 10,000-12,000 m³/d BWRO Unknown Conceptual stage. Saadiyat Island Desalination 10,000 m³/d SWRO Bids were due in 2008 Takreer Desalination 33,600 m³/d (7.4 MIGD) Feasibility stage. desalination plant Taweelah RO Desalination 225,000 m³/d (50MIGD) SWRO $250m-$300m Pilot plant testing is ongoing Umm Al Nar Desalination 123,000 m³/d (27MIGD) SWRO $250 million- $300 million The project is still live and under consideration. Abu Dhabi Port Authority Shuweihat 2 Shuweihat 3 Taweelah C Source:GWI, 2010 Desalination and power Desalination and power Independent Power Project (IPP) Desalination and power 114,000 m³/d (25 MIGD) & 1000 MW by ,000m³/d (65 MIGD) & 3400 MW by ,000 m³/d (101MIGD) MSF & 1700 MW In the region of 1500 MW with no desalination capacity initially. 455,000m³/d (100 MIGD), & potential to generate 1,500MW. Consultants sought for feasibility study. $2.2 billion Secured $950 million of project finance in 2009 from thirteen commercial banks. JBIC also contributed a large amount of debt. The difference will be made up from additional equity from the sponsors ADWEA, GdF Suez Energy International and Marubeni. Being tendered as a power plant, with the long-term possibility of SWRO capacity at the plant. $250 million At the planning stage. 872

20 United Arab Emirates, Abu Dhabi // Current and future projects Tracked projects in the UAE (all Emirates) Figure Tracked desalination projects in the United Arab Emirates Project name Capacity Expected cost (m³/d) Description Abu Dhabi Port Authority 114, ,000 m³/d (25 MIGD) & 1000 MW by 2011, and 295,000 m³/d (65 MIGD) & 3400 MW by 2028 Client: Abu Dhabi Ports Company Current status: The project is still at an early stage. ADPC is said to be seeking around 113,652 m³/d (25 MIGD) & 1000 MW. Abu Dhabi, Desert Islands Unknown Unknown Client: TDIC (Tourism Development & Investment Company) Current status: The development is expected to be served by two small desalination plants located on the largest island, Sir Bani Yas. Mott MacDonald has been involved in an advisory capacity. Al Zawrah, Ajman 45,460 45,460 m³/d (10MIGD) SWRO Client: Federal Electricity and Water Authority (FEWA) Current status:the client has issued a request for proposals, with the bid deadline set for 22 April Fujairah 1 SWRO expansion 170,000 Expansion of the existing 170,000 m³/d SWRO section of the hybrid plant by 136,000 m³/d (30MIGD). The extra output will go to Fujairah, Sharjah and other northern emirates. The existing 284,000 m³/d MSF capacity will remain unchanged. Client: Emirates Sembcorp Water & Power Company (ESWPC), in partnership with ADWEA. Current status: Terms of reference for the project are expected to be issued by the client in the first half of Hamriyah IV MED 182, ,000 m³/d (40MIGD) MED Client: SEWA (Sharjah Electricity and Water Authority) Current status: On hold. A winner was expected to be announced in Sidem, Fisia and Aquatech bid on the MED project. Hamriyah IV SWRO 363, ,700 m³/d (80MIGD) SWRO Client: SEWA (Sharjah Electricity and Water Authority) Current status: On hold. A winner was expected to be announced in Aqua Engineering, Aquatech, Doosan, Fisia Italimpianti, GE and Pal Technology bid on the SWRO project. Hassyan IWPP 545, , ,000 m³/d ( MIGD) & 1500 MW Client: Dubai Electricity & Water Authority (DEWA) Current status:fourteen bids were submitted by the extended 8th March 2010 deadline for the advisory contract. Twelve of the 14 bids included quotes for all three parts of the contract: 1) Mashreqbank/Taylor-DeJongh/Dewey & LeBoeuf/ILF (AED9,026,453) 2) Latham & Watkins (AED9,150,003) 3) BNP Paribas/Lahmeyer/Chadbourne & Parke (AED9,175,000) 4) KPMG/WorleyParsons/DLA Piper (AED9,623,142) 5) PA Consulting (AED9,962,569) 6) Ernst & Young (AED11,500,001) 7) HSBC/Mott MacDonald/White & Case (AED11,527,420) 8) Berwin Leighton Paisner/Scott Wilson (AED14,350,000) 9) McKinsey & Company (AED14,591,000) 10) Citibank/Clifford Chance/Fichtner (AED15,564,020) 11) PWC/Black & Veatch/Trowers & Hamlins (AED16,543,602) 12) Deutsche Bank/Ashurst/Pöyry (AED20,871,282). Bids from Consulting Engineering Company (AED2,626,000) and Lane Clark & Peacock (AED6,959,000) included quotes for one and two parts of the advisory contract, respectively. Note that AED10,000,000 is equivalent to around $2.7 million. 873

21 Global Water Market 2011 // Middle East Project name Capacity Expected cost (m³/d) Description Jafza 100, ,000 m³/d SWRO Client: Jebel Ali Free Zone Current status:palm Water is evaluating the bids, although an award is not expected to be made until October. Two bidders submitted proposals by the extended deadline of 19 June: a South Korean consortium of Hyundai Rotem, Lotte Engineering and Construction, and Keangnam Enterprises; and GS Engineering & Construction. The nominated process contractor is GE Water. GE Energy Financial Services and Palm Water are the equity owners in the project company, and GE Water is the nominated subcontractor for process-related equipment. Layyah expansion 22,730 22,730 m³/d (5MIGD) SWRO Client: SEWA (Sharjah Electricity and Water Authority) Current status:sewa is reviewing the possible addition of 22,730 m³/d (5MIGD) of SWRO capacity at the Layyah Power Station site in Sharjah. CH2M Hill commissioned a 5MIGD plant at Layyah in 2008/09. Masdar 10,000-12,000 10,000-12,000 m³/d BWRO Client: Abu Dhabi Future Energy Company (ADFEC) Current status:the project is at the preliminary stage. Programme manager CH2M Hill will seek to treat brackish water from the aquifer that underlies the city. ADFEC, which is developing the Masdar intiative, is understood to be exploring the option of solar power for the desalination element in order to meet the carbon management aspects of the Masdar initiative. Mina Rashid 100,000 At least 100,000 m³/d across two RO plants Client: Nakheel Current status:nakheel has indicated that the supply of potable water to serve Mina Rashid will be completed in three phases. The timing of each phase is currently under review, as part of the wider revision of masterplans for Palm Jebel Ali and the Dubai Waterfront. Phase 1 is likely to see Mina Rashid supplied from Dubai's main water supply. Phases 2 and 3 are each likely to consist of a new RO plant. Mina Rashid is expected to house an estimated residential population of 200,000 on completion. Palm Jebel Ali (including Madinat Al Arab) Hydrogen power and desalination plant, Abu Dhabi 75,000 2 x 75,000 m³/d SWRO Client: Nakheel Current status:the capacity for the two SWRO plants, to be located on either side of the Palm Jebel Ali island, has been revised upwards from 2 x 50,000 m³/d. The revised concession agreement has been received by the three shortlisted bidders: Metito & Berlinwasser; Acciona, Al Rajhi & Instrata Capital; Aqualyng, United Utilities & Samsung. Nakheel has not yet provided the shortlisted consortia with an indication of the bidding timetable. A captive desalination plant is planned to be included at the new 500MW hydrogen power plant, which will process natural gas to create hydrogen and carbondioxide. Client: JV of Masdar (60%) and Hydrogen Energy, itself a 50:50 joint-venture between BP Alternative Energy (20%) and Rio Tinto (20%). Current status:the client is understood to be considering commercial bank financing for the debt portion of the overall project. Front-end engineering for the overall project has been completed. The power plant construction contract is scheduled to be awarded this year, with completion of construction to follow by RAK Ceramics 15,000 15,000 m³/d (3.3 MIGD) SWRO Client: RAK Ceramics Current status:this project is for a 15,000 m³/d SWRO plant, most likely at the Al Hamra site. It will be in addition to the Al Hamra Power Company's 27,400 m³/d facility if it goes ahead. RAK Petroleum Unknown Unknown Client: RAK Petroleum Current status:rak Petroleum is proposing a power station in Ras Al Khaimah to support the future electricity demand in the emirate, as FEWA and ADWEA are not expected to be able to provide sufficient power supply for the Northern Emirates. The proposed plant will produce between 1000MW and 2000MW of power using a coal or gas feedstock. Water generation capacity is a possibility. 874