Dubai Uses Two Contracts to Expand Hassyan Desalination

Dubai Electricity and Water Authority is adding another 60 million imperial gallons a day of capacity through the Hassyan desalination expansion, equivalent to about 272,000 cubic meters a day. The November 6 announcement puts a value of AED 1.76 billion on the second phase and records the signing of two agreements. One establishes the long-term relationship between the water buyer and the producer. The other sets out how the project company will be owned. Together they explain how Dubai has chosen to procure the additional capacity.

One Company Has to Deliver the Plant

The project company is responsible for developing, financing, building and operating the second phase. DEWA will hold 60 percent of the company and Acwa will hold 40 percent. The ownership split tells readers who participates in the company that will deliver the plant. It gives less information about how the parties will handle specific events, such as delays or performance shortfalls, because the announcement does not disclose the full contract terms.

Placing construction and operation in the same project company connects early design choices to later service requirements. A plant has to perform as a producer across its operating life. Its equipment, intake and other infrastructure have to support the output the company has agreed to deliver. The parties can delegate work to contractors, but the announced responsibilities remain with the project company.

The Purchase Contract Establishes a Buyer

The water purchase agreement has a 30-year term. Long-term offtake, the commitment to purchase output under agreed terms, helps a project company plan its revenue and arrange financing for an asset that requires substantial spending before it supplies water. DEWA is both the water buyer and the majority shareholder. Those two roles arise from separate agreements and answer different questions about the project.

The published term and capacity describe the commercial outline. Further details would be needed to assess the conditions for payment, how production availability is tested or which party bears particular changes in operating costs. DEWA reports that the first phase was developed with an investment of AED 3.357 billion. Its commercial terms provide context, but the figures should be kept separate when evaluating the new agreement.

The Capacity Is Added in Phases

Hassyan’s first phase was developed for 180 million imperial gallons a day using seawater reverse osmosis. In that process, pressure pushes water through membranes that separate much of the salt. The second phase would increase the site’s combined capacity to 240 million imperial gallons a day. DEWA projects that its total desalinated water production capacity will reach about 735 million imperial gallons a day by 2029 once both phases are complete.

Those figures are measures of production capacity. The amount of water delivered over time will also depend on how the plant operates and how much the wider system calls for. For the second phase, the new agreements establish who is to deliver the capacity and who is to purchase the output. Commissioning will show when that additional capacity can begin serving the network. For planners assessing supply security, the distinction is between the contracted increment at a single site and the volume the emirate can call on across its full network on any given day.