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Abu Dhabi, UAETuesday 19 June 2018

France’s Veolia to mobilise $200m in investments as it looks to expand Middle East footprint

Utilities firm looks to participate in the world’s largest desalination plant in Abu Dhabi

Veolia provides facilities management for Majid Al Futtaim's Mall of Egypt in Cairo via Enova, a Veolia-MAF joint venture. Majid Al Futtaim
Veolia provides facilities management for Majid Al Futtaim's Mall of Egypt in Cairo via Enova, a Veolia-MAF joint venture. Majid Al Futtaim

French utilities developer Veolia is looking to mobilise around $200m worth of investments in power and water projects in the Mena region in 2018with an acquisition in Turkey and partnerships in the multi-billion dollar Saudi utilities market on its agenda for the coming year.

The Middle East currently accounts for two per cent of Veolia's annual revenue, according to Xavier Joseph, chief executive Middle East for Veolia. The company hopes to grow this figure significantly via participation in desalination and water projects in Abu Dhabi and Saudi Arabia.

“We invest through PPPs [pubic private partnerships] and with the help of debt, $200m is the global amount of money we can mobilise through project financing,” Mr Joseph told The National in an interview in Abu Dhabi.

“We have entered Egypt already and we’re submitting an offer for acquisition in Turkey.

The Turkish acquisition, related to waste-to-energy, will "dramatically change" Veolia's footprint in the country, said Mr Joseph, giving no further details.

Veolia's current Turkish operations, which include a waste water treatment plant at Alanya on Turkey's central Mediterranean coast, generates €8-9 million (Dh36-40 million) in annual revenue.

In Egypt, the company provides facilities management to Majid Al Futtaim's Mall of Egypt and Mall of Alexandria via Enova, a Veolia-MAF joint venture.

Veolia plans to bid for the world’s largest desalination facility in Abu Dhabi, a 200 million Imperial gallon a day project announced earlier this month by the Abu Dhabi Water & Electricity Authority (Adwea). The Dh2 billion Taweela project will be developed as two desalination plants of 100 million gallons each and will be constructed at the namesake power station, which is located north of the city of Abu Dhabi.

Mr Joseph said Veolia plans to submit an expression of interest on the project by the end of January, and hoped to pre-qualify for the scheme in February.

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Firms may be called to submit their bids by October, with hopes for an award by the end of the year, added Mr Joseph, observing that the firm is likely to go alone for the scheme.

"The public client Adwea keeps 60 per cent of the project so the private industries are interested only in the 40 per cent of the project company, so either we will go alone or we will go with one other partner because there is not enough equity to share somehow," he said.

Veolia is also targeting participation in $2.5bn worth of desalination projects in Saudi Arabia, across the industrial cities of Shuqaiq, Yanbu as well as Jubail, with further opportunites coming via the privatisation of the kingdom's water sector and participation the country's water distribution business.

The privatisation of Saudi Arabia's water distribution sector could generate $4-5 billion worth of annual operating revenues for private sector participants, said Mr Joseph.

"We have partnerships with Saudi entities and we are looking forward to seeing the distribution privatisation which is supposed to be the next step after the waste water treatment plant," he added.

Veolia, along with Acwa Power and Oman’s Dhofar International Development, won a contract in December to develop a 25-million-gallon desalination project in Oman, using reverse osmosis technology.

The Dhofar project, which is being built on an independent water producer (IWP) basis, will reach financial close early in the second quarter of this year, said Mr Joseph.