Saudi Arabia's Acwa Power to start operations at Umm Al Quwain desalination plant

The independent water project will help to address water requirements in the Northern Emirates

Desalination plants are a vital part of water provision in the Middle East. Photo: Acwa Power

Saudi Arabia's Acwa Power said it will start operations at a $797 million water desalination plant in Umm Al Quwain, a project that will contribute significantly to water requirements in the UAE's Northern Emirates.

The independent water project (IWP), known as the Umm Al Quwain IWP (Naqa’a), will have a capacity of 682 million litres per day, the Riyadh-based utility said in a filing to the Tadawul stock exchange, where its shares are traded.

The IWP was the result of an agreement between the UAE's Federal Electricity and Water Authority (Fewa), Acwa and DMC Power Holding, which is owned by Abu Dhabi's Mubadala Investment Company.

The project, which was signed in 2019, is Fewa's first water purchase agreement, in which it holds a 20 per cent stake and allows it to jointly own assets with private sector companies.

Acwa Power and Mubadala each hold 40 per cent in the venture, while the government of Umm Al Quwain will join as a partner and will become a stakeholder later.

"The financial impact pertaining to the final operating phase of the project is expected from Q3 2022 financial results onwards," Acwa said in the filing.

The UAE depends heavily on desalination to supply water for drinking and industrial purposes.

Up to 42 per cent of the UAE's potable water comes from about 70 major desalination plants, which account for about 14 per cent of the world's total production of desalinated water, according to government data.

The Umm Al Quwain IWP is one of the largest desalination projects in the UAE. Some of the major desalination facilities in the UAE include the Shuweihat S2 power and water plant in Abu Dhabi, the Jebel Ali power station in Dubai and the F2 plant in Fujairah.

The UAE also has a Water Security Strategy 2036 that aims to ensure sustainability and continuous access to water.

In May, Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, said that the value of investment in new desalination plants in Abu Dhabi, Dubai and Umm Al Quwain stood at Dh7.6bn ($2.06bn).

The annual growth rate of the local water desalination industry is 3 per cent, he said.

In June, Acwa Power and Emirates Water and Electricity Company started operations on the first phase of the $874m Al Taweelah IWP in Abu Dhabi.

The utility is also expanding its footprint across the region and globally. Acwa is leading a consortium to develop a 1.1-gigawatt wind project worth $1.5bn in Egypt, and has teamed up with Oman’s OQ energy company to build a multibillion-dollar green hydrogen-based ammonia production unit in the sultanate.

Last month, Acwa Power partnered with South Korea's Posco Holdings to develop green hydrogen, and in May it was selected as a preferred bidder to develop solar projects in Indonesia.