Metito featured in GWI: Unlocking Private Sector Opportunities

Metito featured in GWI: Unlocking Private Sector Opportunities

We are pleased to share a featured article from Global Water Intelligence (GWI), highlighting Metito Utilities’ pioneering role in advancing private sector participation in Central Asia’s water and wastewater infrastructure.

The article explores recent milestones in Kazakhstan and Uzbekistan, including Metito Utilities’ agreement to develop Kazakhstan’s first full public-private partnership (PPP) wastewater project in Kokshetau, and the anticipated financial close of the Namangan PPP project in Uzbekistan.

In an interview with GWI, Rami Ghandour, CEO of Metito Utilities, shares insights into Metito Utilities long-term vision for sustainable water investment in emerging markets and its commitment to delivering impact-driven, resilient infrastructure solutions.

The full article, published by GWI on 18 January 2024, is shared below with permission and without edits.

 

Private water opportunities gather pace in Central Asia

 

Recent agreements in Kazakhstan and Uzbekistan reveal a market keen for new methods to build its way out of a Soviet past. GWI Asia editor Edward Cullinane investigates.

Published: 18 January 2024

An agreement at the end of last month by water and wastewater specialist Metito to finance and deliver a wastewater treatment plant in Kazakhstan reflects a rising tide of interest from private water companies in a growing set of opportunities in Central Asia.

On 27 December, Metito concluded a heads of agreement with the Kazakhstan Investment Development Fund and other local and national groups to deliver Kazakhstan’s first full public-private partnership (PPP) agreement in the water/wastewater sphere, involving the construction of a 50,000m3/d wastewater treatment plant in the city of Kokshetau.

 

Investing in water in Central Asia

 

Kokshetau, in northern Kazakhstan, is set to be the site of a privately financed wastewater treatment plant developed by Metito. The company says it could provide a model for more water PPP projects in Central Asia.

Meanwhile, the 100,000m3/d privately financed Namangan wastewater treatment project in Uzbekistan, secured by Metito at the end of 2021, is understood to be on the cusp of financial close. Representatives at both Metito and the European Bank for Reconstruction and Development (which is supporting the Namangan project) say they expect further initiatives to follow as the Uzbek government seeks new models to deliver much-needed infrastructure projects. The EBRD in December approved a $10 million fund to establish a project development facility in Uzbekistan in anticipation of further future PPPs.

 

A steppe change in procurement 

There is a relatively extensive pipeline of water and wastewater infrastructure projects in Kazakhstan and Uzbekistan, but progress has often been slow. After breakthroughs on PPPs in Tashkent and Namangan, investors are now predicting a greater use of private finance for future projects. 

 

Project	Country	Capacity*	Cost ($m)	PPP	Status
Namangan WWTP	Uzbekistan	100,000	90	yes	Pre-financial close
Tashkent WWTP	Uzbekistan	1,500,000	tbc	yes	Pre-financial close
Surkhandarya PPP	Uzbekistan	n/a	500	yes	In negotiations
Kendirli desalination	Kazakhstan	50,000	251	no	Awarded Q4 ’23
Kokshetau WWTP	Kazakhstan	50,000	tbc	yes	Heads of agreement
Aktobe WWTP	Kazakhstan	100,000	104	no	Bids due Feb ’24
Karaganda WWTP	Kazakhstan	100,000	34	no	Tender Q1 2024
Taraz WWTP	Kazakhstan	100,000	67	no	Tender Q2 2024
Bukhara WWTPs (Phase II)	Uzbekistan	112,500	94	no	Design stage
Borankul desalination	Kazakhstan	80,000	200	tbd	Planning stage

Source: GWI

 

“We’ve been talking to entities in Kazakhstan now for quite a few years,” Rami Ghandour, chief executive officer at Metito Utilities Limited, told GWI. “There’s a lot of willingness to engage with the private sector, and they see PPPs as the way forward. I think they recognise the benefits of having the private sector come in, invest, build and operate the asset for the long term to give the optimal solution.

“Kokshetau is a medium-sized city, so it’s a good starting point, but the need is there for much larger cities – including the capital Astana, and Almaty. There are also many other medium-sized cities, so that’s why we are putting in a lot of effort.”

Further opportunities for investment are expected to include desalination projects in Kazakhstan, where Metito has been awarded two engineering, procurement and construction (EPC) contracts in the Mangistau region on the Caspian Sea coast.

Motivated by a desire to gain further autonomy from Russia, which currently provides water to part of the region through a 1,000km cross-border pipeline from the river Volga, desalination is one of many potential solutions being considered.

Ghandour added: “I think in due course, as that market evolves, requirements will only grow, and there will be opportunities for investment there.”

In Uzbekistan, Metito was first awarded the contract for the Namangan WWTP in December 2021, but has yet to reach financial close on the project. However, despite declining to provide a timeframe for when the deal could be concluded, Ghandour remained optimistic about the prospects for further expansion in the region.

“It’s a developing market in a new region, and Metito has been blessed to be the first to develop a PPP in the water/wastewater sector in nine countries now. For the first project, it takes a long time.

“Take our Kigali water supply PPP in Rwanda – we signed the PPP agreement in 2015 and reached financial close in 2018. As frustrating as these long, drawn-out processes are, sometimes they are just the reality of having to get all the legal frameworks in place for these projects to happen.

“The overall requirement in Uzbekistan is massive. There is a very large development expected in Tashkent, and Namangan is our example, but I expect many more PPPs to follow, as well in the neighbouring countries. In addition to wastewater projects, we see many other opportunities for irrigation pumps, and in other sectors where it makes sense for the private sector to come in.”

Metito is not the only foreign investor to have taken notice of opportunities in Uzbekistan. Other major developments in Uzbekistan’s PPP stable include the involvement of Abu Dhabi state wastewater body Sustainable Water Solutions Co. (SWS), which in 2022 agreed to finance a colossal 1.5 million m3/d wastewater treatment plant in Uzbekistan. In December, SWS announced that it would be teaming up with Suez and Japan’s Marubeni Corporation to develop the plant – which, once complete, will be one of the largest WWTPs in the region. However, none of the parties involved has so far been willing to clarify the role of Suez and Marubeni in the project.

Meanwhile Suez in November landed a $500 million PPP contract in Uzbekistan’s Surkhandarya region in the south of the country. The contract aims to implement new technologies to better manage non-revenue water losses, new billing systems and to better connect rural residents.

The company is also working on its Tashkent Water Transformation Project, which was signed in 2022, became operational in 2023, and aims to modernise the Uzbek capital’s water infrastructure.

“The Tashkent water transformation project is the fruit of five years of hard work by Suez in partnership with the Uzbek authorities. Now that we’ve started our first project we are looking at a variety of new opportunities,” Paul Bourdillon, Suez CEO for Europe & Central Asia, told GWI.

“Uzbekistan is a country that is experiencing strong economic growth and growing water scarcity. But Uzbekistan is also greatly affected by climate change. Therefore, as time passes, water resources are becoming scarcer and it is very important for Uzbekistan to work to save its water resources,” he added. “We are working with the Uzbek authorities and potential partners including the IFC when structuring the potential financing of our projects.”