Water scarcity is an ever-growing challenge in many parts of the world, from the Middle East and Africa to parts of Asia and even California. Desalination technology has emerged as a crucial solution to provide fresh water where natural resources are insufficient, and the global desalination market is expected to surpass $35 billion by 2028. Let’s explore the world’s leading desalination systems and why investors should pay attention to this expanding sector.
1. Reverse Osmosis (RO) – The Dominant Technology
Reverse Osmosis is the most widely used desalination technology globally, accounting for over 60% of installed capacity. Companies like IDE Technologies (Israel), Veolia (France), and SUEZ (France) lead in implementing RO plants. RO works by pushing seawater through semi-permeable membranes at high pressure, effectively removing salt and impurities.
- IDE Technologies built the Sorek plant in Israel, producing over 624,000 cubic meters per day, supplying nearly 20% of Israel’s household water. The company also operates in China, India, and the US.
- Veolia recently developed the Taweelah RO plant in Abu Dhabi, the world’s largest RO facility with a capacity of 909,000 cubic meters per day, serving over 350,000 households.
2. Multi-Stage Flash (MSF) Distillation – Middle Eastern Dominance
MSF is prevalent in the Gulf region due to the abundance of cheap energy from oil and gas. The process involves heating seawater and condensing the steam in multiple stages to produce fresh water.
- Saline Water Conversion Corporation (SWCC) in Saudi Arabia is the world’s largest producer of desalinated water, with MSF plants supplying more than 5 million cubic meters daily.
- Doosan Heavy Industries (South Korea) is a leader in large-scale MSF installations across the Middle East.
3. Multi-Effect Distillation (MED) – Energy Efficiency Gains
MED is similar to MSF but uses multiple effects at lower temperatures and pressures, offering higher energy efficiency.
- ACWA Power (Saudi Arabia) utilizes MED in several plants, including the Rabigh 3 IWP plant producing 600,000 cubic meters per day.
- Veolia’s MED systems have been deployed in Tunisia and Algeria to boost fresh water availability with reduced energy consumption.
4. Emerging Technologies: Forward Osmosis and Solar Desalination
Innovation in desalination continues to evolve:
- Forward Osmosis (FO) uses osmotic pressure differences rather than hydraulic pressure to desalinate water. Companies like Oasys Water (US) are commercializing FO for industrial wastewater treatment and brine management.
- Solar Desalination is gaining traction, particularly in off-grid regions. Solar Water Solutions (Finland) uses solar-powered RO units to produce drinking water in Kenya and Namibia at zero operating energy cost.
Investment Opportunities
Desalination is capital-intensive, with costs of $0.50 to $1.50 per cubic meter depending on technology and location. However, rising water demand and climate change constraints are pushing governments to incentivize private investment through Public-Private Partnerships (PPPs), green bonds, and water credits.
Leading publicly listed companies in this sector include:
- Veolia (VEOEY)
- SUEZ (part of Veolia now)
- Doosan Enerbility (034020.KS)
- Xylem Inc. (XYL) – provides desalination equipment and water infrastructure solutions globally.
Conclusion
Desalination is no longer just a regional solution for the Middle East; it is becoming essential globally as urbanization, industrialization, and climate change intensify water scarcity. Investors seeking exposure to ESG-compliant infrastructure projects with stable returns should consider desalination. It combines advanced technology, critical infrastructure, and long-term government-backed revenue streams.
Invest Offshore continues to monitor desalination and water infrastructure investment opportunities, particularly in Africa and the Middle East, where sovereign-backed projects seek strategic partners for development and technology transfer.
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