The Middle East and North Africa produced 12 billion cubic meters of desalinated water in 2024, roughly equal to the entire annual flow of the Euphrates River, and the International Energy Agency (IEA) expects that output to triple by 2035. The region already holds more than 40% of the world's installed desalination capacity, with Gulf Cooperation Council countries alone accounting for about a third of it. That scale is not an environmental adaptation measure sitting off to the side of the economy. In the UAE, Bahrain, and Kuwait, desalination now functions closer to a power plant than a water treatment facility in the sense that losing a major plant can directly threaten the drinking water supply for millions of people.
The imbalance driving that buildout is severe. Freshwater demand across MENA now outstrips renewable supply by roughly four times the global average, and the World Resources Institute's Aqueduct tool puts 83% of the region's population under extremely high water stress. Cities and industries have kept expanding anyway. Water scarcity has not stopped growth in the region. It has changed what growth costs.
Saudi Arabia Shows What Buying Two Decades of Water Actually Costs
Saudi Arabia's principal water buyer, the Saudi Water Partnership Company, rebranded this year as Sharakat, offering the clearest look at the capital involved. The company's contracted desalination pipeline is on track to reach nearly 16 million cubic meters a day by 2028, and roughly SAR 60 billion, about $16 billion, is earmarked for new transmission infrastructure alone this decade. Individual contracts show how the model works in practice. The Rabigh 4 plant on Saudi Arabia's west coast carries a contract value of about SAR 2.54 billion, roughly $677 million, for 600,000 cubic meters of daily capacity serving the Makkah and Madinah regions under a 25-year water purchase agreement. A separate plant at Ras Mohaisen, in the Makkah region, is valued at about SAR 2.57 billion, roughly $686 million, for 300,000 cubic meters a day, with initial operations set for early 2028.
Both deals lock in decades of water supply before a single cubic meter is produced.
The Region Ran Out of Room to Treat Water as a Simple Commodity Price
A site can technically have water access today while still carrying real long-term exposure, since aquifers decline, municipal systems hit capacity, and treatment requirements tighten well before a facility reaches the end of its useful life. The World Bank has already quantified where that leaves MENA specifically. Average water availability per person across the region will fall below the 500-cubic-meter threshold that defines absolute scarcity by 2030, and by 2050 the region could need another 25 billion cubic meters a year, equivalent to building 65 more plants the size of Saudi Arabia's Ras Al Khair facility, currently the largest in the world. This is what turns a water shortage into a capital-allocation problem rather than a weather problem.
A utility tariff measures what a company pays for water it consumes today. It says nothing about the capital required to expand treatment, build a reservoir, or desalinate seawater once existing sources tighten, and a cheap current rate is no guarantee that future expansion will be served at all. Water infrastructure funding gaps are already starting to shape site-selection and capital-planning decisions well beyond the Middle East, the same way a data center can secure a competitive electricity rate only to discover that connecting several hundred megawatts requires years of transmission upgrades the sticker price never mentioned. Water is beginning to draw the same scrutiny land, power, and labor have gotten for decades.
The Middle East has not solved water scarcity. It has demonstrated that an economy can invest around a meaningful portion of it, and some of that investment is starting to look less like emergency infrastructure and more like an ordinary financing product. One U.S. water treatment provider has already borrowed the long-term power-purchase-agreement model from solar developers, letting companies pay for treated water on a contract rather than fund the plant themselves, a structure not far removed from what Sharakat is doing at Gulf scale. The World Bank has cautioned that desalination alone will not be fiscally or environmentally sustainable without real gains in conservation and reuse alongside it, and a growing number of governments are formally reframing water reliability as an economic competitiveness issue rather than a purely environmental one. For companies planning facilities meant to run for twenty or thirty years, the number that ends up mattering most may not be today's water rate at all. It is what securing that water for the life of the investment actually costs, and who ends up financing the difference.
