Thursday, 19 December 2013

{Kantakji Group}. Add '12325' The Saudi Water Sector


Nawaf Y. Husein

Faculty Member
 Msc, CRP , CLBB
 Saudi Training Society Member

 Institute of Banking
 Saudi Arabian Monetary Agency ( SAMA)
 P.O.Box : 10820   Riyadh 11443 Saudi Arabia
 Tel : + 966 1 463 3000   Ext. 3825
 Fax: + 966 1 466 2368
 Mobile : + 966 55 48 44 828


 SKYPE : abuhejleh2 




Dear Readers,


Please find attached our latest In-Focus report: The Saudi Water Sector: "Balancing Water and Food Security Against Rising Water Demand Challenges in the Kingdom"


Executive Summary



·          Saudi Arabia's rapidly rising population, urbanization and industrial development and large investments in social and physical infrastructure, have exerted demand pressure on the existing water resources.


·          In 2012, contracts in the water sector amounted to a total of SAR8.9 billion, and those in the waste water sector amounted to SAR2.6 billion.

·          Inefficiencies in water consumption at the national level have called for enhancing water use efficiency in the agricultural sector.

·          In 2009, The King Abdullah Initiative for Saudi Agricultural Investment Abroad was launched with investment amounting to SAR3 billion from private sector Saudi companies.

·          The water sector in the Kingdom is highly subsidized directly–to end-users who pay below production cost–and indirectly, in the form of fuel credit subsidies.

·          End-users in the Kingdom pay low water costs which range between 5%–10% of the actual production cost in the public sector.

·          Saudi Arabia is the largest producer of desalinated water in the world – it currently accounts for an 18% share of global output.

·          Using a total cost of SAR6.29 which includes a weighted average production cost of SAR2.77/m3, SAR1.12/m3 and SAR2.4/m3 attributable to the cost of transportation and distribution, respectively, then it can be inferred that the market size for the public water sector is equivalent to SAR5,572 million. 

·          Challenges include the rapid depletion of groundwater resources, and the costly desalination process, which consequently creates a lack of fuel monetization.

·          The Kingdom is looking at an alternative energy mix for sustainability. In 2012, the Kingdom began operations at the world's largest solar-powered water desalination plant in the city of Khafji, with a capacity of 30,000 m3/day.



Best regards,

NCB Economics Department 

Telephone: +9662646-3232    FAX: +9662644-9783