Finance & Economics

Everything else on this platform exists because someone financed it: the plants, the pipes, the reuse loops. Water in the MENA region is a story of cheap tariffs and expensive capital. Households pay some of the world’s lowest water prices while governments finance costly desalination and conveyance.¹ The gap is bridged by subsidy, oil revenue, development finance and private capital drawn in by sovereign-backed contracts.

Two numbers frame every financing conversation here. Service fees across the Arab region recover about 35% of the cost of producing conventional water and about 10% of the cost of desalinated water, and the fiscal burden of subsidised utilities runs to roughly 2% of regional GDP, the highest share of any region in the world.¹ Utilities worldwide, meanwhile, lose about US$39 billion a year to non-revenue water, valued conservatively at US$0.31 a cubic metre.²

Kuwait is the limiting case. Citizens pay 800 fils per thousand imperial gallons against a production cost the ministry puts at about KD 5, rising to KD 8 in 2024, and peer-reviewed work puts the subsidy at about 92% of production cost, barely changed in a decade.^3 4

Three capital systems co-exist. In the Gulf model, sovereign offtakers procure independent water projects from developer consortia on long purchase agreements, and the winning levelised tariff is often published. In the development-finance model of Jordan, Egypt, Morocco and Tunisia, the tariff cannot carry the capital, so a stack of loans, guarantees and grants is assembled until the project clears a lender committee. The third file is reconstruction, in Iraq, Libya, Syria and Yemen, where water is early infrastructure and the money is grant-heavy, with Iraq now the exception that is contracting commercially at scale.

What water costs, and what it is sold for

Published household tariffs beside the published cost of supply, where one exists. Where both describe the same supply, the gap between them is a measure of the subsidy; for most countries no published cost of supply was found.

The three capital systems, in detail

The Gulf model: sovereign offtake, project leverage, published prices

A state buyer signs a long water purchase agreement, the developer finances the plant against it, and the price is often disclosed. Terms differ by market rather than by convention: 25 years in Saudi Arabia, 30 in Abu Dhabi, 20 in Oman, and 20 to 25 for Bahrain’s Al-Hidd tender.^{5 6 7 8}

The counterparty is the point. Saudi Arabia’s procurement company is fully owned by the Ministry of Finance.⁹ Abu Dhabi Power Corporation held 98.12% of TAQA before completing the acquisition in August 2026, and TAQA left the Abu Dhabi Securities Exchange on 1 September 2026.^10 11

The development-finance model: blending where the tariff cannot carry the capital

Jordan’s Aqaba to Amman carrier is the working example, and it is worth reading as a capital stack rather than as a plant. A 30-year concession was signed in January 2025 with a special-purpose company owned 90% by Meridiam and 10% by Suez, to desalinate 300 million cubic metres a year and move it inland through a pipeline of about 438 km, the length given in the project’s December 2025 environmental assessment.^{12 13 14 15}

On the published numbers the stack runs: a Green Climate Fund package of US$295 million, an IFC A loan of up to US$375 million, EBRD up to US$475 million, AIIB US$250 million, EIB €300 million in two tranches alongside a €50 million EU grant, proposed MIGA guarantees of up to US$1.25 billion, KD 58 million, about US$189 million, from the Arab Fund for the carrier’s power supply, and a package approved by the US DFC in September 2026 of a loan of up to US$1 billion and up to US$800 million of political-risk insurance.^{16 13 17 14 18 19 20 21 22 23} The parties put the capital cost at about US$4.3 billion, or US$5.8 billion with financing; the climate fund records US$6.3 billion and EBRD US$6.0 billion. In late September 2026 financial close had not yet been completed.²² That is the honest measure of how hard this is.

The reconstruction file: grant-heavy, and first in the queue

In Libya, Syria and Yemen water is early infrastructure, funded mostly by grants and concessional lending rather than by tariffs or project debt. In June 2026 the World Bank launched a US$153.6 million project for improved water management and irrigation in Yemen, the first phase of a multi-phase programme, financed by grants to UNDP and UNOPS for the benefit of Yemen.^24 25 26

Iraq has moved further. It awarded US$10 billion of water infrastructure contracts between January 2025 and May 2026, against US$1.8 billion across 2022 to 2024; combined power and water awards passed US$17 billion in 2025.²⁷ Its Basra desalination scheme is a commercial contract at scale, reported as a US$2.42 billion project for a million cubic metres a day, while PowerChina’s separate contract for its water transmission system of about 240 km was RMB 8.925 billion, about US$1.32 billion.^27 28 The water cooperation framework with Turkey was signed in April 2024. Its implementation mechanism, signed on 2 November 2025 and covering three water-harvesting and three land-reclamation projects financed from Iraqi oil revenues, had not yet been approved by the Iraqi cabinet in April 2026.^29 30

Why the tariff number is the political one

Household tariffs run from SAR 0.15 a cubic metre for the first block in Saudi Arabia, water and sewage together, to ₪8.51 for the first block in Israel, water and sewage together, from January 2026; the World Bank records cost recovery in urban supply as achieved in Israel.^31 32 1 In between, Jordan’s first household block was JOD 0.218 a cubic metre in 2024, rising across seven monthly blocks to an unsubsidised top block, as on our tariff benchmarks, against a cost to the state of JOD 1.93 in 2024.³³

Water service fees in some cities of the region are seven to eight times lower than in other cities of the region and the world.¹ The table above pairs tariffs with the cost of supply wherever both are published.

One case in this sector, examined in full.

The structures that move money into water:

Where the capital is moving

The forward pipeline is published in one place worth reading in full. Saudi Arabia’s procurement company plans growth from 3.88 million cubic metres a day of contracted desalination in 2025 to about 7.18 million by 2031, against a supply shortage it puts at 0.62 million cubic metres a day in 2025 rising to 3.16 million by 2031, with seven further plants totalling 2.8 million cubic metres a day and a stated goal of 100% private-sector participation in desalinated production by 2030. It budgets 18 to 24 months to tender a plant and 36 months to build a large one.⁵

The financial rulebook shaping deals, with the instrument numbers:

Instruments as published by each jurisdiction or by counsel; see the funding tracker for institution-level detail.

The sector’s economics reduce to a spread. New desalinated water has been bid and awarded at roughly 30 to 80 US cents a cubic metre at the coast, as the chart below shows, and costs more once it is moved inland, while household tariffs are often a small fraction of that. The clearest evidence of the inland premium is Saudi Arabia’s Jubail to Buraydah transmission scheme, awarded at SAR 3.59 a cubic metre, about US$0.96, for 587 km of pipe and 650,000 cubic metres a day: roughly double the production tariffs below.⁴⁷

That series is the clearest price signal the sector produces, and it carries three warnings. The lowest number on it, Dubai’s US$0.277 in September 2020, was never financed: the preferred bidder could not close and the site was re-let in 2023 at US$0.365.^48 49 50 Prices have since turned: the lowest bid for Abu Dhabi’s Saadiyat Island plant came in at about 73 US cents a cubic metre in July 2024, and Saudi Arabia’s Ras Mohaisen reached financial close in December 2025 at SAR 2.87, about US$0.765, some 85% above Jubail 3A five years earlier.^51 47 52 And the spread between bidders on the same tender is wide enough to matter: 16% from top to bottom on Yanbu 4 in 2020, 43% on Bahrain’s Al-Dur 2 in 2018.^53 54

76 further awards in this sector have no value recorded in our register and are not in the chart.

How reform actually arrives

Metering before pricing

A tariff you cannot measure is not a tariff. By the end of 2023 Morocco had equipped about 794,000 hectares with localised irrigation systems.⁵⁵ The World Bank’s completion report records meters installed for 20 farmers in Haouz and eight in Tadla, and its 29 June 2026 status report records zero wells equipped with water meters in Chtouka on 5 June 2026, against a target of 4,000 by December 2027.^56 57 The record is traced document by document in our case study on drip conversion.

Industrial and commercial tariffs before household ones

In the examples on this page, non-household users were charged more first. Kuwait’s tariffs under Law No. 20 of 2016, sanctioned in March 2017, set KD 4 per thousand imperial gallons for government users, KD 2 for investment and commercial users and KD 1.25 for agricultural and industrial users, while private houses were exempted from the rise.⁵⁸ Saudi Arabia charges government entities SAR 9 a cubic metre for water and sewage, sixty times the first household block.³¹

Subsidy shifted from the water to the household

One option is to price water at cost and support poor households directly. Egypt announced in May 2021 that, from FY 2022/23, state water companies would no longer receive subsidies to cover spending on electricity, raw materials and capital expenditure; the announced reductions would not affect subsidies supporting household water consumption.⁵⁹

Morocco shows the cost of not moving. Households pay 2.5 to 3 dirhams a cubic metre in the first tiers against an average production cost across all sources of about 15 dirhams; the state auditor found desalinated water costing between 4.48 and 23.55 dirhams a cubic metre before subsidy, and a tariff system that does not reflect it. At Laâyoune the 2023 production cost was 23.41 dirhams against an applied tariff of 5.06, and the Agadir operating compensation reached 684 million dirhams between January 2022 and June 2024.⁶⁰

Savings-funded contracts, where no tariff rise is available

Performance-based contracts pay an operator out of measured reductions, so they do not depend on a tariff rise. Jordan is the test case: it loses about 50% of municipal water as non-revenue water, against an acceptable rate of around 20% in a similar operating environment, and the Water Authority of Jordan’s operating cost recovery ratio was 78% in 2021 and is expected to fall below 65% by 2028 without intervention.⁶¹ In June 2024 IFC signed a collaboration agreement with the government and Miyahuna to co-develop a competitively tendered project to reduce water losses in Amman.³⁵

The need is large. The World Bank estimates the region will need an additional 25 billion cubic metres of water a year by 2050, equivalent to building 65 plants the size of Ras Al Khair, and puts climate-related water-scarcity losses at 6 to 14% of GDP by 2050, depending on the policy scenario, with 14% under business as usual.^62 1

The bodies that commission, regulate or deliver in this sector, and the names that recur across its tenders.

• World BankDevelopment bank · Regional
• European Bank for Reconstruction & Development (EBRD)Development bank · Regional
• European Investment Bank (EIB)Development bank · Regional
• Islamic Development Bank (IsDB)Development bank · Regional
• Asian Infrastructure Investment Bank (AIIB)Development bank · Regional
• KfW Development BankDevelopment bank · Regional
• Agence Française de Développement (AFD)Development bank · Regional
• Green Climate Fund (GCF)Fund · Regional
• Kuwait Fund for Arab Economic DevelopmentFund · Regional
• Sharakat (Saudi Water Partnership Company)PPP procurer · Saudi Arabia

Mandates, procurement routes and the rest of the region’s institutions are in the decision-maker directory.

Labelled debt is the newest instrument in the regional water stack, and until recently it was mostly a promise. Egypt issued the region’s first sovereign green bond on 29 September 2020, upsized to US$750 million over five years at 5.25%, against an eligible portfolio of which 26% was sustainable water and wastewater management.^63 64 Disbursements of US$168 million in 2020 and US$143 million in 2021 were reported for transport and water together, with no water-only split.⁶⁵

A water-labelled issue came six years later. TAQA raised a US$750 million five-year blue bond at a 5.125% coupon in July 2026, listed in London, for desalination, water transmission and distribution, wastewater treatment and reuse, which TAQA called the largest blue bond issued by an integrated power and water utility globally.⁶⁶ Jordan’s Housing Bank followed with a US$100 million blue bond backed by EBRD, whose proceeds are to finance, among other things, the largest water infrastructure project in the country’s history.⁶⁷

Green sukuk remain the instrument most discussed and least used for water. UNDP and Kuwait Finance House note few notable issuances in the Gulf to date, with the Islamic Development Bank’s US$1 billion green sukuk of 2019 as the reference point, and desalination listed as a candidate use of proceeds rather than an achieved one.⁶⁸ ACWA Power’s SAR 1.8 billion sukuk of February 2023, seven years with a fifth-year call, carries no green label and no published use of proceeds.⁶⁹

Development and climate finance do the rest. Beyond the Jordanian carrier, the Green Climate Fund approved US$258 million in October 2024 for a US$1.3 billion facility with IFC to scale resilient water infrastructure, covering Egypt, Morocco and Tunisia among others.⁷⁰ The Islamic Development Bank approved €188.82 million for Moroccan dams in December 2025, and JICA signed an ODA loan of up to ¥64.6 billion for Moroccan agricultural water development in November 2025.^71 72

Where the near-term money is:

On the evidence of this page, private capital enters the Gulf by contract and North Africa by blend. So far it has reached offtaker-backed desalination and reuse first, and transmission next, with Saudi Arabia’s Jubail to Buraydah scheme. Any move toward cost recovery starts from a regional base of 35% recovery on conventional water.¹

Two things would change the picture faster than another plant. The first is disclosure: Gulf procurers publish winning tariffs, which makes this an unusually legible water market, while few countries publish a tariff and a cost of supply side by side. The second is labelled debt actually reaching utilities rather than sovereigns and holding companies, which in 2026 began to happen.^66 67 In a region where every water project doubles as adaptation, climate finance is less a new theme than a relabelling of the old one.

Standing references for this sector.

• Global Water Intelligence, the trade source for water tariffs, award prices and market sizing. Paywalled, and the reference point the sector prices against. globalwaterintel.com
• Sharakat, 7 Year Statement 2025–2031 (March 2026). A published procurement pipeline whose dates can be checked against later awards. sharakat.com.sa
• World Bank, Beyond Scarcity: Water Security in the Middle East and North Africa (2017). The report frames the region’s water challenge as one of governance as well as scarcity. worldbank.org
• Pinsent Masons, guide to the regulatory framework for Saudi Arabia’s water sector (31 October 2025). The clearest account of who regulates, owns and procures after the restructuring. pinsentmasons.com