mena water and wastewater infrastructure market

Water and Wastewater Infrastructure in Middle East and North Africa: Mounting

Demand, Major Challenges and Opportunities

Nideshna Naidu, Industry Analyst

Environment and Building Technologies

April 19, 2011

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Today’s Presenter

Nideshna Naidu, Industry Analyst

Frost & Sullivan

Tanu Chopra, Assistant Manager, Corporate Communications,Frost & Sullivan

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Focus Points

� Introduction

� Market Dynamics

� Market Overview and Trends

� Industry Challenges Across Value Chain

� Major Drivers and Restraints

� Total Market Revenues

� 2020 Mega Trends

� Growth Opportunities

� Conclusion

4

Introduction

5

Water Facts – Renewable Water Resources in MENA

32922892

2022

1426

1150

886

752

496

440

333

271

213

198

156

145

116

104

91

78

0

Turkey

Iraq

Iran

Sy ria

Lebanon

Morocco

Egy pt

Tunisia

Algeria

Oman

Israel

Palestine

Yemen

Jordan

Bahrain

Qatar

Liby a

KSA

UAE

Kuwait

Renewable Water Resources (2005) (m3/capita/year)

Water scarcity1,000 m3/person

6

Water Facts – High Water Consumption in MENA

0 500 1000 1500 2000 2500

Kuwait

UAE

Libya

Saudi

Qatar

Bahrain

Oman

Israel

Egypt

Jordan

Percentage (%)

Countries Using More Water than Naturally Available

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Market Definition

WATER & WASTEWATER INFRASTRUCTURE MARKET

WATER TREATMENT

WASTEWATER TREATMENT

WATER DISTRIBUTION NETWORK

WASTEWATER COLLECTION & DISPOSAL NETWORK

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Market Dynamics

9

Market Overview and Trends

1. Concept of Integrated

Water & Power Projects

(IWPP)

2. Public-Private Partnership

(PPP) projects

3. Government initiatives to

raise funds through

infrastructure funds,

private equity funds and

IPO’s

CURRENT MARKET TRENDS

1. Market following high growth

trajectory

2. Government’s backing

development of water and

wastewater infrastructure

3. Water and wastewater

infrastructure companies partner

with domestic investment

companies to execute projects

MARKET OVERVIEW

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Industry Challenges Across Value Chain

Customer ServiceCustomer Service UsageUsageSewage

Collection and Treatment

Sewage Collection and

Treatment

Quality of water

supplied to end-

users

Environmental

Challenges in

Desalination and

ground water

reserves.

High cost of

recycling

wastewater

High Water

Delivery Costs.

The Water

Distribution

coverage in

MENA region is

very poor when

compared to

international

standards.

Long Responsive

time.

Lack of continuous

Service

Technical

problems with

meters

Tariffs below

recovery cost

hence very less

revenues

generated

Lack of effective

demand

management

Lack of

awareness on

water

management

Operational

Efficiency

Limited

treatment

facility and no

proper

sewage

network

Customer ServiceCustomer ServiceTransmission

and Distribution

Transmission and

DistributionUsageUsageCustomer ServiceCustomer ServiceTreatmentTreatment

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Challenge in both forms – Quantity and Quality

LOW

Algeria, Egypt, Iraq,

Lebanon, Morocco,

Syria, Tunisia

HIGH

Bahrain, Kuwait,

Oman, Qatar, Saudi

Arabia, United Arab

Emirates

L

O

W

Jordan, West Bank

and Gaza, Yemen

H

I

G

H

Water Quantity Severity

Wa

ter

Qu

ali

ty S

eve

rity

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Major Drivers and Restraints

DRIVERS

DRIVERS

RESTRAINTS

Low Impact

High Impact

Medium Impact

Short Term

Medium Term

Long Term

RESTRAINTS

Inefficient water management

practices

Lack of awareness of saving drinking

water

Growth in Population and Urbanization

Water Scarcity and Low Replenishment Rates

Economic Diversification

High water consumption practices

Awareness on Water Crisis

Source: Frost & Sullivan

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Total Market Revenues

The water & wastewater infrastructure market is valued at $ 9 billion and was divided among the following geographic market segments as shown below.

ROME

3%

North

Africa

25%

GCC

72%

Source: Frost & Sullivan

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2020 Mega Trends

MEGA TRENDS

Infrastructure Development

TechnologySm

art Citi

es

Green Concepts to Smart Concepts

Emphasis on Wastewater Recycle and Reuse

Economic Diversification

15

Growth Opportunities

16

Technology Roadmap

1980 20001990

Evolution of Water Management Strategies in the Environment Sector

2010 2020

IndustrialW&WW

MembraneTechnology

MunicipalWastewater

ServiceOutsourcing

Drinkingwater

RO Desalination

Water & WastewaterTreatment

WaterManagement

Water Re-Use& Recycling

Re-Use and Recycling

AdvancedW&WW Treatment

Integrated NetworkManagement

TurnkeySolutions

Energy fromWastewater

Zero LiquidDischarge

ThermalDesalination

Bio SolidsManagement

SewerageConnection

WorldwideSanitation

Small-ScaleDesalination

PackagedPlants

Design &Build

AlternativeSources

Systems for Small Communities

Chemical free treatment

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Market Attractiveness

Saudi ArabiaUAE

Qatar Oman

Egypt

Kuwait

Bahrain

Syria

Jordan Lebanon

0

1

2

3

4

5

0 1 2 3 4

Source: Frost & SullivanDemand for New Water/ Wastewater Facilities

Level o

f P

rivate

Part

icip

ati

on

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Beneficiaries of the Unprecedented Growth

Source: Frost & Sullivan

Water & Water & Water & Water & Wastewater Wastewater Wastewater Wastewater InfrastructureInfrastructureInfrastructureInfrastructure

Electro Electro Electro Electro Mechanical Mechanical Mechanical Mechanical Equipment Equipment Equipment Equipment SuppliersSuppliersSuppliersSuppliers

EPC EPC EPC EPC ContractingContractingContractingContracting

Water & Water & Water & Water & Wastewater Wastewater Wastewater Wastewater Technology Technology Technology Technology ProvidersProvidersProvidersProviders

Financial Financial Financial Financial ServicesServicesServicesServices

Advisory Advisory Advisory Advisory ServicesServicesServicesServices

Design and Design and Design and Design and Planning Planning Planning Planning ServicesServicesServicesServices

Water & Water & Water & Water & Wastewater Wastewater Wastewater Wastewater InfrastructureInfrastructureInfrastructureInfrastructure

Electro Electro Electro Electro Mechanical Mechanical Mechanical Mechanical Equipment Equipment Equipment Equipment SuppliersSuppliersSuppliersSuppliers

EPC EPC EPC EPC ContractingContractingContractingContracting

Water & Water & Water & Water & Wastewater Wastewater Wastewater Wastewater Technology Technology Technology Technology ProvidersProvidersProvidersProviders

Financial Financial Financial Financial ServicesServicesServicesServices

Advisory Advisory Advisory Advisory ServicesServicesServicesServices

Design and Design and Design and Design and Planning Planning Planning Planning ServicesServicesServicesServices

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Conclusion

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Growth and Competitive Factors to Leverage Business Opportunities in the MENA Region

LEVERAGING OPPORTUNITIES

Growth Factors

Competitive Factors

Water Scarcity

Increasing Economical

Activities

Increase in Population & Urbanization

Demand for Water Distribution Networks

Emphasis on Recycle & Reuse

projects

Investments in Desalination

projects

Leveraging Partnerships

Value Engineering

Cost-effective technologies to

cater to the mass market

Offer Advanced Treatment

Technologies

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Conclusion

Moving forward, MENA region would witness tremendous development in wastewater collection & disposal networks and in enhancing wastewater treatment capacities.

MENA is expected to see a rise in projects based on BOO, BOOT, and BOT models to overcome financial constraints.

Promising years are ahead for the domestic and international water & wastewater infrastructure developers in MENA and particularly in Saudi Arabia, UAE and Egypt.

Moving forward, MENA region would witness Moving forward, MENA region would witness

tremendous development in wastewater tremendous development in wastewater

collection & disposal networks and in enhancing collection & disposal networks and in enhancing wastewater treatment capacities.wastewater treatment capacities.

MENA is expected to see a rise in projects based MENA is expected to see a rise in projects based

on BOO, BOOT, and BOT models to overcome on BOO, BOOT, and BOT models to overcome financial constraints. financial constraints.

Promising years are ahead for the domestic and Promising years are ahead for the domestic and

international water & wastewater infrastructure international water & wastewater infrastructure

developers in MENA and particularly in Saudi developers in MENA and particularly in Saudi Arabia, UAE and Egypt.Arabia, UAE and Egypt.

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For Additional Information

Tanu Chopra

Asst. Manager - Corporate Communications - MENA

(91) 22 66072037

tanu.chopra@frost.com

Sasidhar Chidanamarri

Industry Manager

Environment & Building Technologies

(91) 44 66814456

sasidhar.chidanamarri@frost.com

Nideshna Naidu

Industry Analyst

Environment & Building Technologies

(91) 44 66814366

nideshna.naidu@frost.com

Ravinder KaurAssistant ManagerCorporate Communications- South Asia+91 44 6160 6666Ravinder.kaur@frost.com