MARKET INSIGHT. February Municipal Wastewater & Reuse in the GCC: Market Drivers, Trends, and Forecast,

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1 Source: Timothy Vogel MARKET INSIGHT Municipal Wastewater & Reuse in the GCC: Market Drivers, Trends, and Forecast, February 2015 INSIGHT SERVICE GREENFIELD + WATER = BLUEFIELD

2 About Bluefield Research Bluefield Research guides companies with in-depth water industry analysis and insights, supported by interactive partnership between our clients and research team. Client Relationship Bluefield Research stands behind its research, providing clients full support including follow-up research, clarification, and methodology reviews provided on a 24/7 basis Unlimited Q&A and support Adaptive research agenda to client needs and priorities Ability to undertake additional custom research to solve critical problems Value-added Water Industry Focus Bluefield Research s approach combines primary research with a unique analytical model that stresses industry structure and dynamics, competitive analysis, and strategy drivers Bluefield Research focuses entirely on the water industry, allowing for insights based on unique industry metrics, and offering the ability to drill deeper with research contacts among varied market segments Application of strategy consulting analytical concepts Rigorous market model and scenario-based forecasting methodologies Detailed competitive analysis drawing from value chain, supply chain, and cost structure models Leveraging industry contacts Market segmentation by value chain and geographic market Full coverage of municipal, industrial, and supply chain players, investors, and EPCs 2

3 Municipal)Wastewater)&)Reuse)in)the)GCC:)Market'Drivers,'Trends,'and'Forecast,'2015'7'2020)) Qatar 5 Bahrain Kuwait UAE Oman End Year of Investment Plan Country Funding Source Investment Targets, US$ Time Period Bahrain Ministry of Works (MoW) 3.95 billion Kuwait 1 Ministry of Public Works 1.70 billion Oman Haya Water 2.90 billion Qatar 2 Ashghal 6.00 billion Saudi Arabia National Water Company (NWC) billion UAE Planned Wastewater Infrastructure Investment Size of the bubble denotes estimated average annual spend Abu Dhabi Sewage Services Company (ADSSC) Saudi Arabia Reuse 2.54 billion TOTAL billion US$22.4B Government initiatives and funding will be central to market growth. Signaling additional activity, Oman s Haya Water announced US$2.9 billion in December 2014 for new wastewater projects between 2016 and 2020 in the Muscat Governate. Saudi Arabia s US$23.0 billion planned infrastructure investments through 2027 are aimed at increasing wastewater network coverage which stands as low as 45% in Makkah (Mecca) and urban water reuse activities. Kuwait announced US$4.4 billion in water and wastewater investments between 2013 and 2016, of which Bluefield estimates US$1.7 billion will be for wastewater infrastructure. However, only 53% of planned investments in the previous planning phase were completed, highlighting overall market uncertainty. Announced investment in wastewater infrastructure totals US$2.7 billion from 2014 to Separate from this total, the Inner Doha Re-Sewage Project represents US$3.3 billion invested between 2012 and NETWORK US$12.3B REUSE US$10.1B 12 rates. 2,000 1,500 1, ,500 4,000 3,500 3,000 2, period. Municipal Wastewater & Reuse in the GCC: Market Drivers, Trends, and Forecast, Table of Contents ANALYSIS Summary GCC Market Attractiveness Wastewater Infrastructure Gaps Generate Greenfield Opportunities Population Growth Drives Increasing Demand for WW Treatment Water Supply Portfolios by Country Water Reuse Targets and Investment Plans Announced Government Spending Planned Project Investment by Year Bluefield Forecast Drivers and Solutions GCC Wastewater Infrastructure CAPEX Forecast by Country GCC Wastewater Forecast by Segment EXHIBITS Market Drivers & Comparative Landscape Wastewater Production vs. Collection and Treatment Capacities Forecasted Population Growth Forecasted Population Growth GCC Water Sources by Country Installed Reuse Capacities vs. Country Targets Planned Wastewater Infrastructure Investment by Country and Year Planned Investment in Treatment Plants and Networks Bluefield Forecast Drivers and Solutions CAPEX Forecast by Country, CAPEX Forecast by Network and Treatment Capacity, CAPEX Network Collection Breakdown, CAPEX Treatment Plant Breakdown, Forest Methodology by Definition & Assumption Announced Government Spending GCC governments have laid out a total of US$40 billion in wastewater infrastructure spending to close current infrastructure gaps, of which US$23 billion is slated through US$ (billion) Municipal)Wastewater)&)Reuse)in)the)GCC:)Market'Drivers,'Trends,'and'Forecast,'2015'7'2020)) Bluefield Forecast Drivers and Solutions MARKET DRIVERS SOLUTIONS Population Wastewater Produced (m 3 /d) Collection Gap (m 3 /d) Targets (m 3 /d) Government Investment (US$) Current Project Pipeline (m 3 /d) million 55.0 million 15.4 million 16.7 million 5.2 million 1.8 million 4.6 million 6.1 million 2.8 million US$23.8 billion through million US$13.5 billion announced projects Three primary factors population, infrastructure gaps, wastewater generation are driving greater spending on greenfield wastewater solutions. CAPEX Treatment Gap (m 3 /d) TOTAL CAPEX COLLECTION TREATMENT/ Bluefield forecasts US$22.4 billion of CAPEX spending on wastewater and collection networks from inclusive. US$ (million) Municipal)Wastewater)&)Reuse)in)the)GCC:)Market'Drivers,'Trends,'and'Forecast,'2015'7'2020)) GCC Wastewater Infrastructure CAPEX Forecast by Country Government initiatives and current infrastructure gap underpin Bluefield s US$22.4 billion wastewater infrastructure forecast through Total CAPEX Saudi Arabia Qatar UAE Oman Kuwait Bahrain 0% 20% 40% 60% 80% 100% Population growth while not a significant impact in the short-term will mean an additional 4.1 million people in the region during the forecast period, requiring 1.2 million m 3 /d of wastewater capacity at a CAPEX cost of US$751 million just to maintain current treatment and collection Planned government spending totals US$23 billion through Another US$17 billion in additional government commitments stretch out to Saudi Arabia s planned US$23 billion (from when to when) is expected to focus largely on wastewater collection capacity. The announced project pipeline of US13.5 billion forms foundation of spending forecast, particularly in early years of the forecast Bluefield forecasts US$22.4 billion of CAPEX spending on wastewater and collection networks, with more than 58% expected in Saudi Arabia and Qatar. Saudi Arabia stands out by the fact that its population is 40% larger than all other countries combined. However its treatment capacity surplus reduces its spend, largely on collection, to US$7.1 billion through the forecast While the ramp-up to the 2020 world cup is only now taking hold in Qatar, driving more than US$5 billion of CAPEX, of which 58% is slated for after In early 2015, Kuwait announced a 225,000 m 3 /d upgrade to the Sulaibiya Wastewater Treatment and Reclamation Plant would be supplied by GE, signaling continued growth of reuse systems in the region. Qatar s Inner Doha Re-Sewerage Implementation Strategy Program to be completed by 2019 and the UAE s Strategic Tunnel Enhancement Programme to be completed by 2015 represent more than US$4.5 billion of spending on collection systems in the region. 3 COUNTRY PROFILES Bahrain Qatar Kuwait Saudi Arabia Oman United Arab Emirates Background: Market Conditions, Responsible Agency, Investment Plans, Population, Current Reuse Water (%) Recent Projects & Policies Key Market Players & Value Chain Positioning Installed Wastewater Coverage: Wastewater Produced, Wastewater Collected, Wastewater Treated PROJECT DATA Details on 76 wastewater & reuse plants in development and under construction: Project Name Country Capacity Status Expected Date of Commissioning Operating municipal projects, including +195 wastewater treatment systems: Project Name Country Status Data of Commissioning Municipal Wastewater & Reuse in the GCC: Market Drivers, Trends, and Forecast, is part of Bluefield s Advanced Water Treatment & Desalination Insight Service. Advanced Water Treatment & Desalination Insight Service provides clients with a steady stream of in-depth analyses of evolving water treatment markets, company strategies, demand shifts, and the underlying drivers for greenfield opportunities.. Learn more at Spreadsheets included with report purchase

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