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Investments in wastewater treatment: the role of private sector and international organisations in MENA countries

المياه العادمة investment wastewater reuse

Photo 1: A lecture on investment potential on waste water treatment and reuse in MENA, during the world water week.

By: Rossella Messina

Wastewater reuse is among the main alternatives to overcome water scarcity challenges and to meet the current water needs, and it was the theme of this year’s World Water Week organized by the Stockholm International Water Institute (SIWI). The Middle East and North Africa (MENA) region was one of the core focus areas, with academics and politicians discussing their work in public sessions and private meetings.

Currently, only half of the wastewater produced in the MENA region is collected, and from the collected fraction, 57% goes back to the environment untreated, this is a wasted potential.[1] In a region where 80% of the water use is for agriculture,[2]reusing treated wastewater for agricultural purposes could allow the reallocation of water to the domestic sector, since in many countries the per capita availability is below the water poverty line (less than 1000 m3/capita/year).[3] Additionally, the use of treated wastewater could relieve the stress on unsustainable water resources, especially for countries such as Libya or Saudi Arabia where ‘fossil’ groundwater from non-renewable aquifers represents more than 70% of the total water withdrawals.[4]

Building and maintaining wastewater treatment infrastructure requires large-scale investments. In many countries, public-private partnerships (PPP) play a crucial role in realizing such investments. The MENA region is rich with positive examples, for instance in Jordan where several build-operate-transfer (BOT) projects have been established to improve the water supply for the capital Amman, which will also benefit the Red Sea-Dead Sea project.[5] Or in Egypt, where the New Cairo Wastewater Treatment Plant was the first PPP in the country.[6]

The private sector is often reluctant to participate in new water projects, due to the political instability of the region, the lack of adequate policies and the difficult coordination between stakeholders. This is where international organizations can play a role. In 2013, the Global Water Partnership (GWP) initiated a project on governance and finance for the Mediterranean water sector, which so far has focused on Jordan, Tunisia and Palestine. The aim of the project is to bring together stakeholders and host technical workshops to diagnose key governance bottlenecks and find common ground for future strategies. In Jordan, the focus was on clarifying the responsibilities of the different water authorities[7]and on the possibility of establishing a dedicated regulatory body aimed at improving and monitoring the efficiency of the water sector.[8] For Tunisia, one of the main outcomes was stimulating small-scale private sector investments in the water sector, starting with reviewing the past successful examples. In the long term, the country could initiate BOT arrangements for the development of new wastewater treatment infrastructure such as desalination plants.[9]

Unfortunately, agreements are not a guarantee that investments will be made. Value-for-money analysis and solid budget management should be at the source of any PPP. Many countries will also need to review their water policies and tariffs if investors are to be attracted. Even if new infrastructure is built, it could be difficult to maintain in the long term, since in most of the MENA countries water fees are among the lowest in the world – not reflecting the scarcity of water in the region.[10] Strengthening the information base and increasing the availability and accessibility of data is another way to attract investors. Some countries have recently started working in this direction. For instance, Palestine established the Water Sector Regulatory Council (WSRC) in 2014, although it took two years to begin its work. The institution is tasked with ensuring equitable water tariffs and at the same time making data on the water sector publicly accessible.[11]

A lack of data, limited stakeholder participation and finance are only some of the obstacles that wastewater treatment programmes face in the MENA region.[12] At the core of meetings such as the World Water Week is the will of international organizations such as SIWI or GWP to enable a consistent base for concrete actions. As Oyun Sanjaasuren, the chair of GWP, underlined, “If we focus on pre-investments for knowledge and capacity building, then the finance can be unlocked.”[13]