UAE's water and wastewater market is set to more than double by 2015, according to a new research by Frost & Sullivan. The study noted that UAE's water and wastewater sector has found that the market recorded revenues of $2.75 billion through 2011, with the market forecast to grow to $5.61 billion by 2015. The research suggests that population growth of 3.28 percent annually and rapid economic development has put increasing pressure on existing water and wastewater resources.
The current total installed capacity for desalination in the UAE stands at 8.9 million liters per day (MLD), with the report's writers anticipating that privatization will increase the rate of new projects coming online.
The government is also targeting 100 percent water connectivity to all UAE residents by the end of this year, boosting water distribution investment.
"The rise in oil prices facilitates investments in the infrastructure of water and wastewater projects. If oil prices remain firm, the UAE is likely to record surplus revenue, which can be utilized for economic diversification," the report added.
The UAE's infrastructure industry grew by more than 3.3 percent through 2010, with cities including Dubai and Sharjah looking at "smart city" projects, and the Northern Emirates recording significant real estate growth.
The research indicates that participants in the water market are likely to resort to competitive pricing to standout, with low product differentiation in the sector. UAE customers are said to be "highly price sensitive" and expect water treatment systems to be fully compliant with their needs and specifications.
According to the Environment Agency Abu Dhabi, 72 percent of water used in the UAE comes from groundwater, 21 percent comes from desalination and only 7 percent is treated water.
The UAE is listed by the United Nations as a high-rank country when it comes to water stress, a situation which occurs when the availability of water is not in balance with the demand for water.
In the UAE, per capita water usage is 550 liters per person per day, as compared to a global national average of 250 liters per person each day. While resources are limited, the UAE has one of the highest water consumption rates in the world.