SUEZ ENVIRONNEMENT AT THE FOREFRONT OF RESOURCE-RELATED CHALLENGES IN THE MIDDLE EAST

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1 SUEZ ENVIRONNEMENT AT THE FOREFRONT OF RESOURCE-RELATED CHALLENGES IN THE MIDDLE EAST

2 SUMMARY Sustainable water and waste management: a challenge for countries in the Middle East and the Gulf In the Middle East, water and waste treatment is a fast growing market Developing alternative solutions to protect water resource: seawater desalination and wastewater recycling Reform of the waste sector is underway SUEZ ENVIRONNEMENT at the forefront of resource-related issues in the middle east A historic 60-year presence in the Middle East Growth prospects in municipal and industrial water treatment and waste management Sustainable real estate projects, a fast growing market in Qatar and the United Arab Emirates SUEZ ENVIRONNEMENT S successful projects in the Middle East The As Samra purification plant, the largest wastewater treatment plant in Jordan The Doha wastewater treatment plant in Qatar recycles 85% of wastewater The Mirfa project to accommodate the increasing demand for power and water in the United Arab Emirates Desalination of briny water as an answer to the Saudi capital s water challenges A landfill site at Mascate for sustainable waste management in Oman Rehabilitation of Saïda s waste mountain : a waste-recovery model for the future in Lebanon View of Saïda city in Lebanon Michal Straka 2

3 The Middle East together with North Africa constitutes the most arid region in the world. Over the last several years, the sharp increase in population, growing urbanisation, higher household incomes have combined with industrial and agricultural development, leading to a dramatic increase in the demand for water. These same factors have also prompted a sharp rise in the production of both industrial and domestic waste, which, absent suitable treatment infrastructures, has generated environmental and health risks. Water and waste management has thus very quickly become a major challenge for countries in the Middle East. For several years now local authorities have been launching investment programmes and international calls for tender including private sector operators to find long-term solutions to managing their resources. The historic 60-plus year presence in the Middle East of SUEZ ENVIRONNEMENT makes it a privileged partner to support authorities in developing innovative solutions to meet the challenge of protecting resources. Sustainable water and waste management : a challenge for countries in the Middle East and the Gulf Although 6,3% of the world s population is concentrated in the Middle East and North Africa (MENA) region, the area furnishes only 1,4% of freshwater resources 1. Throughout the region, this scarcity of resources is exacerbated by growing demand, associated with the constant increase in the population and its urbanisation. In Kuwait for example, domestic consumption 2 rose from 107 to 507 million m3 over the last 30 years ( ), while the population simply doubled during the same period (from 1.5 to 3 million inhabitants) 3. There is another factor contributing to this phenomenon: for several years now, Middle Eastern countries have been diversifying their economy to reduce their dependence on oil exports and are focusing on the development of agriculture and industry, both of which consume large quantities of water. 1 Population Reference Bureau, «Finding the balance: population and water scarcity in the Middle East and North Africa» 2 Evaluating the Economic and Environmental Impacts of Water Subsidies in Kuwait, M. Alshawaf, The World Factbook, CIA,

4 All of these factors have ended up exacerbating the water shortage in the region. They are also behind the sharp rise in the production of both industrial and domestic waste. It is estimated that every day nearly 250,000 tons of solid waste are produced in the Middle East, with the result that Arab cities are among the biggest producers of waste in the world 5. As a result, managing solid waste is currently at the forefront of concerns among Middle Eastern countries. In the face of this reality however, infrastructure dedicated to water and waste treatment remain significantly underdeveloped and inefficient. In the Middle East, it is estimated that some 37% of water supplied is lost due to inefficient distribution networks, while only a small proportion of the wastewater collected is treated and most towns in coastal areas discharge untreated wastewater directly into the ocean. Likewise, while a lot of solid waste produced is recyclable, countries in the Middle East lack proper infrastructure to treat it. Less than 20% of solid waste treated, and less than 5% is recycled 6. Once it is collected, most of this waste is buried untreated, thereby contributing to soil pollution and damage to the environment. Stricter environmental regulations and standards are being implemented at the initiative of Mediterranean countries, whose awareness to issues of pollution in the Mediterranean has been raised, and through greater international awareness. The authorities, aware of the water and waste challenges in their region, are launching investment programmes aimed at developing the necessary infrastructure to manage them, and are increasingly calling on skills of private companies to modernise water and waste management in large cities, often through public-private partnerships. With a presence and experience of over 60 years in the region, SUEZ ENVIRONNEMENT is ideally positioned to seize the opportunities of this fast growing market. In the Middle East, water and waste treatment is a fast growing market Developing alternative solutions to protect water resource: seawater desalination and wastewater recycling In light of the demand for water and sanitation, a strong political will to reform the water sector has emerged in the Gulf region and the Middle East. A reform movement is taking place through major investments to improve the effectiveness of the supply system and to develop alternative resources. Reverse osmosis desalination plant in Al Dur Bahrain Degrémont Each country has thus proposed national strategies or programmes to plan efforts and investments to be allocated to this sector over several years. In Qatar, for example, the National Development Strategy includes among its 7 primary objectives the promotion of cleaner water and sustainable water usage 7. To satisfy the increase in demand for this rather scarce resource, solutions such as seawater desalination and wastewater recycling, two techniques requiring specific technical knowledge, loom large among the options chosen by national authorities. It is estimated that the desalination capacity of gulf countries will have to more than double by 2020 to meet the growing demand for water in the region 8. Among them, Saudi Arabia is now the largest producer in the world of desalinated water and is expected to invest 11 billion dollars in desalination plants between 2013 and Source: Arab Foundation for Environment and Development (AFED) 5 Cities like Kuwait, Riyadh, Dubai and Abu Dhabi produce over 1.5 kg of solid waste per inhabitant per day, versus an average of 1.2 kg/inhab/day worldwide ( What a Waste: A Global Review of Solid Waste Management, World Bank, 2012) 6 According to the report by the Arab Forum for Environment and Development (AFED), Qatar National Development Strategy : Towards Qatar National Vision 2030, p , MEED Insight Research & Analysis 9 MEED Insight Research & Analysis 4

5 It is estimated that the wastewater treatment capacity will have to more than double over the next six years to accommodate economic growth in the Middle East 10 during that period. GCC water demand and installed capacity (Source : County Utility and Distribution companies, MEED Insight Research & Analysis * Data for Kuwait and Qatar is for 2012) Reform of the waste sector is underway Waste management has become a priority for Middle East and Gulf countries, which in the early 2000s launched investment programmes to develop new infrastructures and modernise existing ones. Laws were also enacted, both at the federal and local levels, and measures were taken to educate people and make them aware. For example, UAE authorities developed the federal programme known as the 3Rs ( Reduce, Reuse, Recycle ) to spread awareness among the population about waste recycling. In light of the total investment amounts necessary, governments are launching international calls for tender and are deciding more and more to sign public-private partnerships in order to honour their commitments and sustainably resolve the issue of solid waste in their region. Barwa city wastewater treatment plant in Qatar Véronique Paul

6 Lusail wastewater treatment plant in Qatar Véronique Paul SUEZ ENVIRONNEMENT at the forefront of resource-related issues in the Middle East International development is one of four key development areas for SUEZ ENVIRONMENT. To confront the challenges of water and waste management in the Middle East, the region is without question a part of the high priority geographic areas in which the Group wants to increase its presence. A historic 60-year presence in the Middle East In the 1950s, SAFEGE, the engineering subsidiary of SUEZ ENVIRONNEMENT, laid the foundation for the Group in the Middle East through an historic act: it discovered a drinking water source in Riyadh, which enabled the capital of the young Saudi State to be maintained at that location. Degrémont, a subsidiary specialising in water treatment facilities, became active in the 1970s in the Middle East, where it constructed the first reverse osmosis desalination plant in Saudi Arabia in 1975, the largest hybrid desalination plant in the world in the United Arab Emirates in 2003 (Fujairah) and the largest purification station in the Middle East with the As Samra plant in Jordan at the end of In addition to its water treatment activity, the Group has gradually extended its water services management to major cities like Jeddah in Saudi Arabia in 2008 and Amman in Jordan in SUEZ ENVIRONNEMENT has also had a presence in this waste treatment since 1977 through Trashco LLC, the first private company oh the UAE in the waste management sector. Trashco is active in the collection of industrial, commercial and medical waste, and more recently cleaning streets and industrial sites. At present, Trashco has more than 2,400 customers in Dubai, the Dubai Mall, the Mall of the Emirates, Emirates Flight Catering and the real estate developer EMAAR. The Group now has a presence in most countries in the region, including Saudi Arabia, Oman, Qatar, the United Arab Emirates, Bahrain, Kuwait, Jordan, and Lebanon, 72% of which stemmed from water and 28% from waste operations. Growth prospects in municipal and industrial water treatment and waste management In the short term, the majority of SUEZ ENVIRONNEMENT s development opportunities in the Middle East consist of reverse osmosis desalination projects or wastewater recycling, two options offering sustainable solutions to the issue of increasingly scarce resources. 6

7 Water treatment for industry, one of SUEZ ENVIRONNEMENT s four key strategic areas, also offers strong growth potential, especially in the Oil & Gas sector, due to the local presence of several major energy companies (Chevron, Exxon, BP, Shell, Hess, BHP, etc.). The market for supplying equipment to this sector is growing and the demand for technologies related to water use is especially strong in light of stricter environmental standards and increasing security needs. The 2014 acquisition of Process Group, an Abu Dhabi based company specialising in equipment for the global oil and gas industry, has rounded out the portfolio of SUEZ ENVIRONNMENT s solutions designed for the Oil & Gas industry and supports its development in the region. In the waste sector, the Group is currently present in the United Arab Emirates (SITA TRASHCO), Oman (SITA AL BASHEER) and Lebanon where it is taking part in rehabilitating the Saida landfill. The Group s business primarily involves waste collection and storage, while new market prospects are appearing related to the increasing awareness by local authorities of the waste problem. Opportunities have appeared especially in the fields of sorting and treating municipal and industrial waste. In connection with public-private partnerships, BOT (Build, Operate, Transfer) projects for household waste incineration plants are currently underway in Kuwait and Bahrain, while other projects in the rehabilitation and construction of landfill sites that comply with international standards are pending. The commitment on the part of national authorities to modernise their infrastructures has enabled SUEZ ENVIRONNEMENT to win several large-scale water management contracts over the last few months, in desalination (Mirfa and Masdar in the United Arab Emirates) wastewater treatment (Al Amerat in Oman, Doha West in Qatar) and waste management (Mascate and Nizwa storage sites in Oman). Sustainable real estate projects, a fast growing market in Qatar and the United Arab Emirates For several years now, some countries in the Middle East, particularly Qatar and the United Arab Emirates, have clearly been interested in developing tourism. To achieve their goals, these countries have started building residential areas, even new towns and artificial islands that are environmentally friendly. For example, Qatar is creating Pearl Island opposite its capital Doha. The island will be home to commercial complexes and residential clusters. In the United Arab Emirates, there are substantial real estate developments in terms of size and of quantity; numerous projects are underway, including the sustainable city of Masdar, near Abu Dhabi. SUEZ ENVIRONNEMENT is supporting these «sustainable» projects by installing high performance wastewater and solid waste treatment technologies that make it possible to recycle water for irrigation and thus preserve resources. Lusail wastewater treatment plant in Qatar Véronique Paul

8 SUEZ ENVIRONNEMENT processes and recycles the wastewater of the major real estate project in Lusail (Qatar) Degrémont designed, built and operates the wastewater purification plant for the 35 square km seaside residential and commercial real estate development project. The plant, which began operations in July 2013, could process up to 60,000 m3 of wastewater/day for a population of roughly 200,000. The contract involves the installation of a 10-kilometer+ collection system to carry wastewater from the future town to the purification station. The water recycled by this plant is being used to introduce vegetation to desert parcels and to maintain green spaces throughout the artificial Pearl Island. SUEZ ENVIRONNEMENT is taking part in the Masdar (Abu Dhabi) green-energy desalination pilot project Degremont advanced energy-efficient desalination pilot in Masdar Abu Dhabi SUEZ ENVIRONNEMENT The UAE public company Masdar entered into a contract in 2014 with Degrémont, a SUEZ ENVIRONNEMENT subsidiary, to build a high-tech green-energy pilot desalination plant in Abu Dhabi. This contract is part of a pilot desalination programme launched by Masdar to test and develop seawater desalination technologies that could be powered by renewable energy. The long-term objective is to implement these technologies in desalination plants in the United Arab Emirates. The contract encompasses the design, completion, supply, construction, commissioning, operation, maintenance and evaluation of a pilot desalination plant over an 18-month period. This facility will provide higher energy efficiency to the most sophisticated desalination plants and could be powered 100% by renewable energy sources. The second stage of the Programme will consist in implementing this programme in green-energy seawater desalination plants powered by renewable energies. 8

9 SUEZ ENVIRONNEMENT CONTRIBUTES TO PRESERVING WATER RESOURCES BY DEVELOPING SOLUTIONS SUCH AS REUSING WASTEWATER AND DESALINATION, THEREBY PRODUCING ALTERNATIVE RESOURCES Overview of the As Samra wastewater treatment plant in Amman - Jordan Degrémont WASTEWATER REUSE AND DESALINATION: TWO ALTERNATIVE SOLUTIONS TO PROTECTING WATER RESOURCES SUEZ ENVIRONNEMENT S successful projects in the Middle East The As Samra purification plant, the largest wastewater treatment plant in Jordan In 2012, Degrémont signed a 105 million, 25-year public-private partnership contract to expand the As Samra wastewater treatment plant. The project, due for completion in 2015, will increase the plant s capacity from 267,000 to 365,000 cubic metres per day to meet the needs of an estimated 3.5 million people, nearly 35% of the country s population. Once the extension is completed, the plant will output a volume of treated water close to 10% of the country s entire water resources. The treated water will be fully reused for farm irrigation. Fully integrated into its environment, the plant is virtually self-supporting in energy terms. The hydro turbines above and below it, along with gasfired dynamos fuelled by biogas from sludge digestion, will produce 80% of the required processing power, with the remaining 20% coming from the grid.

10 Lusail wastewater treatment plant in Qatar Véronique Paul The Doha wastewater treatment plant in Qatar recycles 85% of wastewater Faced with Doha s increasing population and to protect water resources, in 2015 the Public Works Authority of Qatar (Ashgal) awarded Degrémont a US$50.5 million contract to design and operate the Doha West wastewater treatment and recycling plant. Since then, Ashgal has also awarded Degrémont two plant extension contracts, the most recent signed in December 2014 for 94 million to increase the plant s capacity to 280,000 m3/day to handle the wastewater from the equivalent of 1,040,000 residents of the city of Doha. SUEZ ENVIRONNEMENT will be the plant operator until Doha West wastewater treatment and recycling plant in Qatar Véronique Paul It is currently the largest wastewater treatment operation in the country. With its state-ofthe-art membrane ultra filtration system, the facility can recycle 85% of the wastewater it receives, the recycled water then being reused to irrigate vegetated areas and vegetable crops and to replenish aquifers. 10

11 The Mirfa project to accommodate the increasing demand for power and water in the United Arab Emirates In 2014, Degrémont, a subsidiary of SUEZ ENVIRONNEMENT, won the contracts to design, build and operate the reverse osmosis seawater desalination plant in the Mirfa project, awarded to GDF SUEZ by the Abu Dhabi Water and Electricity Authority (ADWEA). This project worth 146 million includes a 117 million contract to design and build the desalination plant. With a capacity of 140,000 m3/day, it will be equipped with a SeaDaf system to pre-treat turbid algae-rich water from the Arabian/Persian Gulf and pass it through a double reverse osmosis process for desalination. It will be followed by a second, 7-year operation and maintenance contract awarded to Degrémont by Mirfa International Power & Water Company worth 29 million. Located 160 km west of Abu Dhabi, the Mirfa project, which includes the desalination project, will supply 240,000 m3 of drinking water a day and 1,600 Megawatts of electricity to meet the region s growing demand for drinking water and power. Desalination by reverse osmosis is emerging as a sustainable solution to meet the challenges of water scarcity and conservation. 11 IWPP: Independent Water and Power Project Given its scarcity, water is of primary importance for the Sultanate of Oman The government has officially classified environmental issues as one of its priorities and is turning to alternative solutions such as desalination and wastewater reuse to ensure sustainable water supplies. In Al-Amerat, a residential suburb of Oman s capital Mascate, Haya Water, the water sanitation authority in Oman, has awarded to Degrémont, a subsidiary of SUEZ ENVIRONNEMENT, in a consortium with Al-Ansari Trading Entreprise LLC, the contract to design and build a purification plant to process 18,000 m3 of wastewater a day. This contract signed in October 2014 and worth 50 million, 25 million of it for Degrémont, includes an assignment to operate and maintain the plant for two years. The plant will use an UltraforTM membrane bioreactor process, adapted to process residential and industrial wastewater. This technology produces an effluent that meets the most stringent standards and is clean enough to be returned to the most sensitive environments for reuse. The water treated at the Al Amerat plant will be used for irrigation. In 2006, Degrémont was awarded a contract to design, build and operate for 15 years the reverse osmosis seawater desalination plant (with a capacity of 120,000 m3/day) at the Barka 2 facility in Oman. This desalination plant is part of the overall Barka 2 Independent Water and Power Plant (IWPP) project won by GDF SUEZ. It involves building a desalination plant along with a 678 MW-capacity gas-fired thermal power plant. The Barka 2 seawater desalination plant is a feature of the strategy to protect the marine environment. The brine produced by the seawater filtration process is used to cool the thermal power plant so that the final discharge into the sea has no environmental impact. The Barka II plant, commissioned in 2009, can produce 120,000 m3 of desalinated water a day, to partially meet Oman s water needs. 11

12 Desalination of briny water as an answer to the Saudi capital s water challenges Like many Gulf States, the Kingdom of Saudi Arabia is facing significant increases in water demand. With a 5.7 million population growing annually by 4%, Riyadh is one of the biggest conurbations in the world. Although the country has large underground reserves, its water tables are dropping. A landfill site at Mascate for sustainable waste management in Oman The Sultanate of Oman has a population of approximately 4 million, half of whom live in its capital city Mascate in the northern part of the country on Oman s Gulf coast. In this region with its fast-growing population, waste management is an increasing challenge, which is why local authorities are looking for long-term solutions. In January 2015, SUEZ ENVIRONNEMENT, via its local subsidiary SITA AL BASHEER*, has won the contract to design, build and operate the expansion of the landfill site for 5 years. The total contract is worth 32 million. SITA AL BASHEER will build the new cell of the landfill facility for Al Amerat s non-hazardous solid municipal waste generated by the city of Mascate. The new facility will include a biogas recovery system and a reverse osmosis plant for treating leachates, allowing the city of Mascate to curb greenhouse gas emissions and improve their environmental commitments. This project is a continuation of the first landfill cell with a capacity of 250,000 metric tons of waste a year in operation since 2010 on the same site by SITA AL BASHEER. This new contract will increase the landfill s capacity to 400,000 metric tons a year. The Mascate landfill site at Al Amerat is SUEZ ENVIRON- NEMENT s second waste treatment facility in the Sultanate. Indeed, the Group has also just won, through its subsidiary SITA AL BASHEER, a two-year contract to operate the landfill facility at Nizwa which takes all the non-hazardous municipal waste in the Dalkiliyah region. With a capacity of 150,000 tons a year, this facility has been designed to the most stringent environmental standards. To meet its needs, in 2012 the National Water Company (NWC) of Saudi Arabia awarded to Degrémont, a subsidiary of SUEZ ENVIRONNEMENT, the contract to supply and install 33 modular treatment units to produce drinking water from underground brine in the Riyadh region. These contracts worth 40 million cover 14 sites throughout the city. Intended to supply local residents in and around Riyadh and its region, these facilities are part of the investment announced by its local authorities to support the heavy demographic growth in a country with scarce freshwater resources. The biggest of these sites is at Salboukh, which treats 30,000 m3/day. These 33 systems consisting of reverse osmosis membranes include cooling towers, multimodal filters, and chemical supply systems needed to produce drinking water from brine. SUEZ ENVIRONNEMENT PARTNERING LOCAL AUTHORITIES TO SUSTAINABLY MANAGE THEIR WASTE * This company is owned at 60% by SUEZ ENVIRONNEMENT and at 40% by three Oman partners: Towell Construction & Maintenance, International Projects Development Co., National Trading Co. 12

13 Rehabilitation of Saïda s waste mountain : a waste-recovery model for the future in Lebanon The Saïda waste facility comprising more than 1 million cubic meters is located on the Mediterranean coast, 1 km from the port and the historic centre of the city. This waste mountain, a real environmental millstone for both inhabitants and the municipality, is the result of more than 40 years of accumulating garbage. At the request of the Lebanese government, the United Nations Development Programme (UNDP) has taken charge of managing the US$25 million contract to rehabilitate the waste. SUEZ ENVIRONNEMENT is working with the local company Al-Jihad for Commerce and Contracting (JCC) to make available its know-how by implementing a comprehensive solution onsite including bringing in experts from many of its subsidiaries (SITA, Safege, CIRSEE, NOSE). A new landfill facility, built on the same site as the existing dump, along with a treatment plant, will come into service in late SUEZ ENVIRONNEMENT SUPPORTS LOCAL AUTHORITIES IN SUSTAINABLE WASTE MANAGEMENT BY OFFERING ITS EXPERTISE TO LOCAL PARTNERS TO DEVELOP THE BEST SOLUTIONS FOR LOCAL PROBLEMS Through this project, JCC and SUEZ ENVIRONNEMENT hope to promote a model for waste management based on individual social responsibility: Saïda s waste site will be transformed into a public park, offering residents recreational areas with an open-air theatre for public events, vegetation and landscaping inspired by Saïda s history and culture. View of the mountain of waste in Saïda, Lebanon Michal Straka Contact Catherine des Arcis catherine.desarcis@suez-env.com 13