Azerbaijan’s first large-scale seawater desalination plant to be built Saudi Arabia-based ACWA Power under a recently signed $400 million public-private partnership agreement. it is a rare Caspian Sea project for the water and power contractor and a milestone for the country’s water sector.
ACWA Power announced on December 26 that it executed a design-build-finance-own-operate-maintenance concession with Azerbaijan’s state water authority, the Azerbaijan State Water Resources Agency, with a term of 27.5 years. The project company will be wholly owned by ACWA Power at signing, with additional details to be announced at financial close.
ACWA Power plans to develop the country’s first large-scale seawater desalination plant Sumgayit, located near the capital of Baku, under a $400 million P3 deal.
Map courtesy of Adobe
The planned facility would be located in the Sumgayit Industrial Park, about 19 miles northwest of the capital, Baku, along the Caspian coast.
The site places the project within Azerbaijan’s main coastal industrial and population corridor, serving the Baku metropolitan area, including the Absheron Peninsula, which has a population of between 3.2 and 3.3 million, according to Azerbaijan’s state statistics and United Nations urban data. The total population of Azerbaijan is approximately 10.2 million, according to official national statistics and World Bank data.
Related reports from the Azerbaijan government, citing ACWA Power and water agency officials, have indicated a planned capacity of about 300,000 m3 per day. At full capacity, the plant could supply approximately 2 million people at typical urban consumption levels, underscoring its potential role as a stabilizing water source for the Baku-Absheron corridor rather than a marginal supplement.
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The project is moving forward as independent scientific assessments have pointed to long-term risks to water supplies in the Caspian region. The Intergovernmental Panel on Climate Change and NASA have identified rising temperatures and evaporation, not short-term hydrology, as the main drivers of the sustained decline in water levels in the world’s largest enclosed inland sea.
A peer-reviewed study published in Nature Communications projects continued declines under most warming scenarios, while World Bank water sector reviews for Azerbaijan have cited the trend as a growing constraint on coastal infrastructure and municipal supply planning.
The next key milestones for the desalination project will be financial close and EPC disclosure, which will clarify whether the project is delivered under a single EPC envelope or multiple construction packages.
The design of the catchment and mouth, the feed and the energy intensity will be among the most consequential technical decisions, given the shallow coastal conditions of the Caspian Sea and the scale of the installation. These items are typically completed shortly before a notice to proceed to comparable desalination P3s.
Power supply arrangements, including grid connection and energy intensity assumptions, have not been disclosed, nor have financing arrangements, lenders or a notice date for construction to proceed. ACWA Power said these details will be provided after financial close.
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Azerbaijani officials have previously indicated that multiple agreements linked to the desalination program, including land use and state support instruments, were implemented by 2025, positioning the plant as a flagship investment in water security. The facility is expected to be transferred to the state water agency at the end of the concession term, according to an Azerbaijan-based report.
