Recently, the Asian Infrastructure Investment Bank approved a $45 million non sovereign loan financing to Azerbaijan to support the construction of the country's first large-scale seawater reverse osmosis desalination plant. This desalination plant will be built in the Sumgait Industrial Zone along the Caspian Sea coast, covering an area of about 30 hectares. It will use reverse osmosis technology to extract drinking water from the Caspian Sea and is designed to have a daily production capacity of about 300000 cubic meters. The project is the first government social capital cooperation project in Azerbaijan's water sector, and also a landmark project of international financial institutions and private capital cooperation to develop water infrastructure in the Central Asian Caucasus region.

The project adopts PPP mode

The project will be implemented in PPP mode and BOOT mode, fully developed and operated by Saudi Arabia's ACWA Power. ACWA Power has signed a 25 year water purchase agreement with the Azerbaijan National Water Resources Agency, with the agreement period starting from the planned commercial operation of the project. The Azerbaijani Ministry of Finance provides guarantees for payment obligations during the operation period. According to ACWA Power, the total investment of the project is approximately 418 million US dollars, with the Asian Infrastructure Investment Bank's financing of 45 million US dollars being a part of it. International financial institutions such as the Asian Development Bank and the International Finance Corporation are also investors in the project. In September 2026, the OPEC International Development Fund approved a $40 million priority guaranteed project loan for the project. The Azerbaijan National Water Resources Agency recently held consultations with the Asian Development Bank on joint projects such as modernizing irrigation and drinking water facilities and expanding the use of alternative water sources.

Electric Power Construction East China Institute takes the lead in general contracting

The project construction will be undertaken by a general contracting consortium led by East China Institute of Electric Power Construction, with members including Innovative Water Application Company and Water and Environment Technologies Company from Saudi Arabia. The East China Institute of Electric Power Construction and ACWA Power have established successful cooperation precedents in Azerbaijan. On January 8, 2026, the completion ceremony of the 240 MW wind power project from Kiz to Absheron, developed by ACWA Power and contracted by the East China Institute, was held. This seawater desalination project is another deep cooperation between the two sides in the Azerbaijani market, and also marks an important breakthrough for Chinese engineering enterprises in the field of water infrastructure in the Caucasus region. Keywords: Infrastructure News Network, seawater desalination, international

Meet the water demand in Baku

Under full load operation, the project produces approximately 109.5 million cubic meters of desalinated water annually, mainly providing supplementary water sources for the growing water demand in the capital city of Baku and the Absheron Peninsula region. According to the environmental impact and social assessment documents of the project, the project plans to complete financing closure in the third quarter of 2026 and start comprehensive construction. Limited water production will begin in the third quarter of 2028, and it is expected to achieve full commercial operation in the first quarter of 2029. This project will help Azerbaijan diversify its water supply sources, alleviate the pressure of water scarcity in the coastal areas of the Caspian Sea, and provide reliable water security guarantees for regional economic and social development.Editor/Gao Xue