Construction of the 200,000-cubic-metre-a-day plant will begin in July 2008 and is due to be completed in 24 months.

Befesa was the low bidder for the contract, submitting a price of $291.5m and a tariff of $0.58 a cubic metre of desalinated water.

Befesa will form a joint venture with the Algerian Energy Company (AEC) to carry out the project. The Spanish company will take a 51 per cent stake in the project company, with AEC owning the remaining 49 per cent.

The other bidders for the project were Singapore’s Hyflux; a Spanish consortium of Inima and Aqualia; Acciona, also of Spain; and a team of the US’ GE with Egypt’s Orascom Construction Industries.