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Middle East & North Africa

Hamma Water Desalination: Bringing drinking water to the desert

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Country: Algeria 
Sector: Infrastructure

Challenge: Severe water shortages in the city of Algiers

Solution: $200 million in OPIC financing for the construction of a reverse-osmosis water desalination facility to deliver 200,000 cubic meters of potable water to Algiers each day.

Impact: The plant, currently operating between 85% and 95% capacity, provides water for about 350,000 families in and around Algiers.

Addressing severe water shortages
In 2005, Algeria’s capital city of Algiers lacked the infrastructure to provide all of its residents clean drinking water on a regular basis. For about half the population, clean water was available only one day out of three and these severe shortages led to both the stockpiling of water as well as the consumption of dirty water in household and agricultural uses.

With the region’s groundwater table depleted, dams and other water infrastructure aging, and the city’s water demand expected to double over the next decade, the Algerian government recognized the need to invest in alternate sources for drinking water. Because it also recognized that the high cost of desalinating seawater would make the price of water prohibitive for many Algerians, it agreed to subsidize the cost.

OPIC's first project in Algeria
The Algerian Energy Company entered a deal with Ionics Inc. of Watertown, Mass., in which Ionics agreed to build a water desalination plant and the state water authority took a minority stake in the plant and agreed to purchase the bulk of the clean water produced. OPIC provided a $200 million loan to Ionics, a desalination equipment manufacturer which was later acquired by GE. George Haddad, General Manager of Hamma Water Desalination, who said that in addition to financing, OPIC brought extensive experience working in developing countries, and had well-established processes in place that helped the project move swiftly.

The Hamma Water facility, which opened in 2008, was Algeria’s first privately-owned water desalination plant, as well as OPIC’s first project in Algeria. The plant is located in a nonresidential area near Algiers’ Mediterranean Coast, with two offshore intake systems collecting seawater for processing. It operates around the clock.