IFC-supported Partnership to Help Increase Clean Water Supply in Egypt
Amid rising consumer demands for scarce water supplies, IFC, the Sovereign Fund of Egypt (TSFE), and the European Bank for Reconstruction and Development (EBRD) have partnered to boost the supply of safe drinking water in Egypt through a public-private partnership (PPP) that will develop the first batch of desalination plants in the country to be delivered as PPPs.
Under the partnership, IFC and EBRD will jointly advise TSFE to structure the development of desalination plants under a PPP model. The private sector will be competitively selected to design, finance, build, operate, and maintain the plants. The project is part of the Government of Egypt’s strategy to increase the desalinated water supply by 8.8 million cubic meters of water daily by 2050. The initial plants, to be located in the governorate of Marsa Matrouh, will mainly benefit the residents of the governorate as well as adjacent areas on Egypt’s north coast.
Egypt faces critical water shortages, with about 98 percent of its water coming from the Nile River, which is under threat from climate change, and being heavily used by the agriculture sector. Today, Egypt can only supply 560 cubic meters of water from freshwater sources per person every year – well below the recognized water scarcity threshold of 1,000 cubic meters per person annually.
“The project will support the Government of Egypt’s Vision 2030, which calls for developing water resources, supporting progressive sustainable development, and improving Egyptians’ quality of life,” said Karim Badr, CEO of TSFE Infrastructure and Utilities Subfund. “It also aligns with TSFE’s mandate to contribute to the development of such strategic sectors and attract the right investment and development partners. We are pleased to be working with IFC on the first desalination projects under our national Desalination Program. Egypt is blessed by its geographical location between two seas, making desalination a promising approach to managing our water needs today and into the future.”
“Water scarcity is a critical challenge in Egypt, and the country’s ambitious desalination program is a key initiative for tackling this issue,” said Sérgio Pimenta, IFC Vice President for Africa. “IFC is pleased to support the government in preparing the first projects, which will help establish the foundations for the larger program.”
“We are delighted to be a part of this landmark project which will contribute to providing water security for the country through unconventional sources of water in a sustainable manner,” said Heike Harmgart, EBRD Managing Director for the Southern and Eastern Mediterranean region. “Implementing through a PPP can help to ensure faster and more efficient project completion and EBRD has the expertise in this field to offer.”
“Fostering private sector engagement to unleash economic opportunities in vital sectors is the essence of Egypt’s international cooperation. ‘The Project Preparedness and Advisory Services’ provided jointly by two of our important development partners, the EBRD and IFC, to the Sovereign Fund of Egypt, funded by Germany and the Global Infrastructure Facility, establishes a new display of public-private partnerships dedicated to accelerating water security in the country through ambitious strategic desalination projects,” said Egypt’s Minister of International Cooperation H.E. Dr. Rania A. Al-Mashat.
“The role of the private sector in such a program is indispensable to ensure the right expertise is on board as well as the technological know-how and sufficient and sustainable financial resources. To that end, we will be looking forward to leveraging IFC’s and EBRD’s extensive experience in preparing and implementing similar projects in various sectors of the economy, in the preparation and implementation of key activities in relation to the desalination projects, including undertaking due diligence and defining the optimal modality surrounding our program,” said Egypt’s Minister of Planning and Economic Development H.E. Dr. Hala H. Elsaid.
The proposed desalination plants will intake saline water from the Mediterranean Sea and deliver potable water to residential and commercial consumers through Egypt’s existing water network.
IFC has a growing portfolio of nearly $1.5 billion in investment projects, and $32 million in advisory programs in Egypt which support the private sector in key areas such as access to finance, fintech, climate finance, manufacturing, infrastructure and renewable energy, healthcare, and gender.