Saudi-based ACWA Power Signs $400M Azerbaijan Desalination Deal

Azerbaijan’s first large-scale seawater desalination plant is ready to be constructed by Saudi-based ACWA Energy, below a lately signed $400-million public-private partnership settlement. It’s a uncommon Caspian Sea challenge for the water and energy contractor and a milestone for the nation’s water sector.

ACWA Power introduced Dec. 26 that it executed a design-build-finance-own-operate-maintain concession with Azerbaijan’s state water authority, the Azerbaijan State Water Sources Company, below a 27.5-year time period. The challenge firm will likely be wholly owned by ACWA Energy at signing, with extra particulars to be introduced at monetary shut.

ACWA Energy plans to develop the nation’s first large-scale seawater desalination plant at Sumgayit, situated close to the capitol of Baku, below a $400-million P3 deal.

Map courtesy of Adobe

The deliberate facility can be situated at Sumgayit Industrial Park, about 19 miles northwest of the capital, Baku, alongside the Caspian coast.

The positioning locations the challenge inside Azerbaijan’s main coastal industrial and inhabitants hall, serving the Baku metropolitan space—together with the Absheron Peninsula—which has a inhabitants of about 3.2–3.3 million, in response to Azerbaijan’s state statistics and United Nations city information. Azerbaijan’s whole inhabitants is roughly 10.2 million, in response to official nationwide statistics and World Financial institution information.

Azerbaijani government-linked reporting, citing ACWA Energy and water-agency officers, has indicated a deliberate capability of about 300,000 cu m per day. At full output, the plant might provide roughly 2 million folks at typical city consumption ranges, underscoring its potential function as a stabilizing water supply for the Baku–Absheron hall moderately than a marginal complement.

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The challenge is advancing as impartial scientific assessments have flagged long-term water-supply dangers within the Caspian area. The Intergovernmental Panel on Local weather Change and NASA have identified rising temperatures and evaporation—not short-term hydrology—because the dominant drivers of sustained water-level declines on this planet’s largest enclosed inland sea.

A peer-reviewed examine printed in Nature Communications tasks continued declines below most warming eventualities, whereas World Financial institution water-sector critiques for Azerbaijan have cited the pattern as a rising constraint on coastal infrastructure and municipal provide planning.

The following key milestones for the desalination challenge would be the monetary shut and EPC disclosure, which can make clear whether or not the challenge is delivered below a single EPC wrap or a number of development packages. 

Consumption and outfall design, energy sourcing and power depth will likely be among the many most consequential technical selections, given the Caspian Sea’s shallow coastal circumstances and the ability’s scale. These parts are usually finalized shortly earlier than a discover to proceed on comparable desalination P3s.

Energy-supply preparations, together with grid connection and energy-intensity assumptions, haven’t been disclosed, nor have financing preparations, lenders or a development notice-to-proceed date. ACWA Energy mentioned these particulars will likely be offered after monetary shut.

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Azerbaijani officers have beforehand indicated that a number of agreements tied to the desalination program had been executed in 2025, together with land-use and state-support devices, positioning the plant as a flagship water-security funding. The power is predicted to be transferred to the state water company on the finish of the concession time period, in response to Azerbaijan-based reporting.