Saudi Arabia is the world’s largest desalination market. And as the kingdom races towards meeting its ambitious National Water Strategy 2030 targets, it continues to offer an unprecedented number of public-private partnership (PPP) project opportunities for developers to help it deliver its plans.

Downstream, an equally ambitious delivery programme is under way covering the expansion of its sewage treatment capabilities. As with desalination, much of this expanded capacity will fall under the procurement mandate of SHARAKAT, the principal buyer of all types of water in the kingdom.

Desalination: established, still scaling

At present, Saudi Arabia’s urban water demand per capita stands at 263 litres per capita per day (LCD), significantly above the global average, driven by strong population and GDP growth as well as highly competitive water usage tariffs.

Anchoring supply is desalination, which accounts for 79% of Saudi Arabia’s urban water requirements. As measures are implemented to protect its valuable natural aquifers, by 2030 the objective is for all but four of the kingdom’s regions – Najran, Hail, Al-Jawf and the Northern Borders – which have access to groundwater sources.

As one might expect, this target requires a substantial expansion of desalination capacity. Over the past two decades, SHARAKAT has procured nine independent water plants (IWPs) across the Eastern Province, Western Region and Jizan Region. Now, under the current plan, its portfolio is projected to almost double from 3.88 million cubic metres a day (cm/d) in 2025 to 7.18 million cm/d by 2031.

This will be achieved through a massive capital expenditure plan using the PPP framework. Two IWPs are already under construction: Rabigh 4 at 600,000 cm/d, targeted for commercial operations in 2026, was awarded to a consortium led by Acwa, together with Haji Abdullah Alireza Company (HAACO) and Al-Moayyed Contracting Group.

Ras Mohaisen Phase 1, at 100,000 cm/d, is targeted for 2028, followed by its second phase, adding a further 200,000 cm/d, in 2030. Undertaking its development and operation are Acwa, HAACO and AlKifah Holding.

Four further IWPs – Shuqaiq 4, Ras Al-Khair 3, Tabuk 1 and Ras Al-Khair 2 – are scheduled to start procurement over the next 18 months. All four have completed the expression of interest stage through SHARAKAT’s prequalification programme, which has been designed to prequalify local and international developers for future water and wastewater PPP projects.

Once qualified, developers and contractors can participate in upcoming projects without submitting a separate qualification application in a move designed to streamline market entry across both asset classes.

The new process has been remarkably successful, with more than 50 local, regional and international developers now prequalified. The programme accepts new applicants every quarter, with updates announced through SHARAKAT’s official social media channels.

Sewage treatment: expanding in parallel

The significant increase in desalinated water supply requires a requisite expansion in downstream wastewater and sewage treatment capacity. The National Water Strategy targets 10 million cm/d of treatment capacity by 2030, with a goal to reuse 70% of all produced water, creating a circular water economy and reducing the environmental footprint of the sector.

Creating this true circular-water economy is a core component of Saudi Arabia’s commitment to reducing the environmental footprint of its water sector, specifically targeting greenhouse gas emissions, untreated sewage and the impact on natural ecosystems. This is in alignment with the UN Sustainable Development Goals (SDG 6) on clean water and sanitation.

Considerable strides have already been made to reach this goal. Treatment coverage has grown from 56.7% in 2019 to 64% in 2025.

Using a similar PPP framework to desalination, much of this has been achieved through new independent sewage treatment plants (ISTPs). Currently, 10 ISTPs are either operational, under construction, or in the tendering phase, with a combined treatment capacity of 1.79 million cm/d.

This figure reflects existing and committed projects, with total capacity expected to increase to 3.19 million cm/d upon completion of identified expansions and portfolio development. Completed projects such as the Dammam West ISTP: Saudi Arabia’s first ISTP PPP at 200,000 cm/d, expandable to 350,000 cm/d, and Jeddah Airport 2 at 300,000 cm/d, expandable to 500,000 cm/d, have already proven the model works at scale across the kingdom.

Three projects are currently in active procurement: the Hadda ISTP at 100,000 cm/d, expandable to 250,000 cm/d, is being developed by a Metito-led consortium comprising also Etihad Water & Electricity (EtihadWE) and SkyBridge Company; and the Arana ISTP at 250,000 cm/d, expandable to 500,000 cm/d, led by Miahona, Marafiq and Buhur for Investment Company.

Both plants will serve Mecca and are targeted for commercial operations in 2028. Hadda will serve the northern catchment and Arana the southern.

The two ITSPs will be followed by the Riyadh East ISTP. With a capacity of 200,000 cm/d, it is targeting financial close in Q4 2026 and commercial operations in 2029.

Six further large ISTPs are proposed with a combined capacity of 325,000 cm/d and commercial operations targeted mostly between 2029 and 2030. The scale of future plants is deliberately designed to meet project financing thresholds and deliver economies of scale.

Upcoming ISTP tender pipeline and timeline

For bidders, this translates into a steady flow of opportunities, enabling strategic participation across successive tender rounds within the SHARAKAT framework.

RFPs for the first four of these ISTPs are due to be issued at the start of 2027.

The commercial framework

All of SHARAKAT’s desalination and sewage treatment projects are structured around the same commercial framework. Operators across both IWPs and ISTPs are paid on availability and operational performance, not on volume of water produced or treated.

Under a government-pays model, operators receive periodic availability-based payments tied to performance and availability, not the volume of the water produced or treated. Revenue is secured against a sovereign-backed offtake obligation for the full concession term, where the government guarantees payment regardless of demand, making both asset classes low-risk for developers and financiers.

Concession terms run up to 25 years under a build, own, operate (BOO) model for IWPs, and a build, own, operate, transfer (BOOT) model for ISTPs.

Desalination is established in a market with a deep track record. Sewage treatment has the momentum. Both are government-mandated, have a proven contractual, commercially attractive framework behind them, and are open to private capital that extends well into the next decade.