The new company, which has not been named yet, will be 51 per cent owned by Veolia and 49 per cent by Mubadala. The joint venture is expected to be set up before the end of 2008.

“There are several projects we are looking at in Egypt, Tunisia, Lebanon, Qatar, Oman and Saudi Arabia,” says Patrice Fonlladosa, president and chief executive officer of Veolia Water Africa, Middle East and India.

Among the projects it is interested in, the joint venture plans to bid for the New Cairo wastewater treatment plant which is being developed in Egypt.

Veolia already has a strong presence in the region. It is developing a reverse osmosis desalination plant in Sur in Oman and this year won the management contract for water networks in Riyadh.

“We already have a base in the Middle East. This vehicle already has revenues, references and cashflow,” says Fonlladosa.

In May, another French company Suez, signed a strategic partnerhsip with Qatari Diar and Qatar’s Barwa Real Estate Company.

The deal includes setting up a joint venture that will focus on water and wastewater services and facilities, power transmission and distribution, district cooling and solid waste collection and treatment.