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Metito, Scatec in Talks on $1.5 Billion Egypt Desalination Plant

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(Bloomberg) -- The UAE’s Metito Holdings Ltd., Scatec ASA and Orascom Construction are in talks with Egypt on a $1.5 billion renewables-powered desalination plant, as the most populous Arab nation moves to address looming water shortages.

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The three-company consortium is in discussions with Egypt’s sovereign wealth fund to partner on the project that would follow a build, own, operate and transfer system, according to Metito’s managing director for Africa, Karim Madwar.

Reliant on the Nile River for much of its fresh water, Egypt has announced plans for a swathe of new desalination plants, including a $2.5 billion initiative involving the sovereign fund and private investors to build more than a dozen renewables-powered facilities by 2025.

Egypt is confronting a yawning supply deficit that officials fear will be worsened by a giant hydropower dam Ethiopia is filling on the main tributary.

The consortium’s proposal involves a 400-megawatt solar-power facility and a desalination plant able to process as much as 1 million to 2 million cubic meters per day, according to Madwar. Egypt also has potential for floating mobile desalination plants like the three Metito is delivering in Saudi Arabia for about $300 million, he said in an interview.

Water Needs

Egypt, which will host the next global climate summit in November, is racing to revamp its use of fresh water. It needs an annual 114 billion cubic meters to meet the needs of its more than 100 million people, but gets only about half that from natural sources. The shortfall is tackled via recycling agricultural wastewater and groundwater and importing extra food instead of irrigating more crops.

The proposed project would benefit from Egypt’s burgeoning green energy sector. Home to a solar park that’s one of the world’s biggest, the country targets raising the proportion of electricity it generates from sustainable sources to 20% this year.

Earlier in February, Egypt’s cabinet said Abdul Latif Jameel Energy & Environmental Services and Hassan Allam Holding submitted an offer to build a desalination plant that targets producing about 2.9 million cubic meters per day of water by 2030.

Family business Metito began operations in 1958 as the first specialist water treatment company in the Middle East, according to its website. Talal Ghandour, a veteran of Bank of America Corp., last year became managing director and chief investment officer of the company founded by his uncle.

Metito says it’s also working on an Egyptian wastewater treatment plant that’s the largest of its type globally in a joint venture with Hassan Allam, Arab Contractors and Orascom Construction. The treated water will irrigate as much as 500,000 acres west of the Nile Delta area.

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