Patrick Werr

CAIRO, Reuters – Egypt’s water-scarce country seeks to quadruple its desalination capabilities by granting concessions from the sovereign wealth fund to 17 private companies to develop sustainable solar energy plants in the coming five years.

This plan is part of Egypt’s efforts to diversify fresh water sources for its rapidly-growing population. It also faces competition from Ethiopia for Nile river water due to the massive hydropower dam being built upstream.

These concessions will encourage private investment as well as technological advancement, two areas where the Arab World’s largest country is struggling.

Ayman Soliman, fund chief executive, said that the government will guarantee water to be bought and sold to industrial and domestic consumers. The subsidy would amount to large amounts. Ayman Soliman declined to give an estimate of how much the subsidy would be.

These plants will produce an average of 2.8 million cubic meters per day. This number would double over the long-term. Egypt currently has desalination capacities of 800,000 cubic meters per day. According to data from the fund, the government hopes for 6.4 millions cubic metres in 2050.

Soliman said that they have received several offers. Soliman explained to Reuters that what’s actually happening is a mixture of a competitive process, and a limited negotiation.

Under President Abdel Fattah al-Sisi, the military has spearheaded infrastructure development. 27 desalination units have been built and some private companies have placed them in resorts on Egypt’s deserted coasts. 

CONCESSIONS – SOLAR ENERGY

The concessions of 25 years would allow firms to bring their own contractors into the construction business and make use of high-yielding renewable energy sources for energy. Soliman indicated that investors are responding well to the concessions so far.

“We have received numerous offers to increase our capacity. The investor market is keen to construct three times that amount.

By using renewable energy, economies-of-scale in plant construction and creative financing (including green finance), the wealth fund hopes that it can reduce its capital cost, estimated at around $1,000 per square metre, of desalted drinking water by between 20 and 25%.

The desalination of expensive fossil fuels has been used in private resorts on Egypt’s Mediterranean and Red Sea coasts.

You can live in an apartment complex for 13 to 18 Egyptian pounds (0.83-$1.15) per square meter, while government tariffs cost only a tenth. Soliman explained that there was a huge subsidy.

Subsidy is the difference in the price the concession owners will be paid for water and what the consumer pays.

He said that while nickel water can be very affordable, you should diversify your water sources.

CUTTING COOSTS

KarmSolar is a local utility and solar energy producer. It was among the first companies to announce publicly that they intend to submit a bid to a section of this project. Instead of being a seller-only service, it says vertical integration can help reduce costs.

With solar plants scattered around sun-drenched Egypt, KarmSolar has begun building a 200-cubic-metre-per-day pilot desalination plant at Marsa Shagra on the southern Red Sea coast, where for five years it has used solar and diesel sources to supply electricity to local resorts.

Ibrahim Metawe (manager of the new facility) stated, “The machines are ready for drilling the wells, and we have placed the orders for their procurement.” He said that they had already received the orders. Clients will be able to start pumping water in the first quarter of 2022.

Water intake wells can be found a short distance from the ocean to minimize the impacts on the fragile marine environment. KarmSolar will install turnkey reverse osmosis systems powered by both solar energy and electricity from government grids.

One option is to fill lorries using excess solar power at daytime peak, supply local construction sites with it, or sell it.

Hydroponics will be also used to experiment with solar energy. This is for the purpose of growing cucumbers and tomatoes.

Metawe stated that “Marsa Shagra already contains little greenhouses.”

($1 = 15.6600 Egyptian pounds)