Saudi Arabia Needs $53 Billion Investment to Secure Water Supply

According to Saudi officials, the country needs more than $53 billion in additional investment in the water sector over the next five years to meet the increasing water demands of its growing population. The dry country, which has no rivers, is forced to supply most of its water from underground aquifers and through desalination of seawater. Reports indicate that water consumption demand in Saudi Arabia is increasing annually by more than five percent, while about 52 percent of the country's desalination plants are outdated and in need of renovation. On Sunday, December 7, Mansour Al-Mushaiti, Deputy Minister of Environment, Water and Agriculture, mentioned at a recent conference that due to this situation, the development of water projects in Saudi Arabia 'requires a large amount of money and a significant volume of investment.' As the world's largest oil exporter, Saudi Arabia experienced a 51 percent drop in oil revenue last year due to falling oil prices. Consequently, officials have announced plans to attract private sector investment for water sector funding. Among these plans, the Saudi government has stated its intention to privatize the 'Saline Water Conversion Corporation' (SWCC), which is the largest company of its kind in the world and operates in desalination along the shores of the Persian Gulf and the Red Sea. Following a sharp decline in revenues, the Saudi government is set to unveil a new national program aimed at optimizing water and energy consumption, which will include reducing water and electricity subsidies. According to Reuters, the government plans to cut $53 billion in electricity and water subsidies by 2020 and also reduce non-oil subsidies by 20 percent. In December, Saudi Arabia removed part of the water and electricity subsidies for the first time, which sparked public protests and led to the dismissal of the minister responsible for implementing the plan due to 'improper execution of the plan.'