[Saudi Arabia] United Water secured two packages in a row within one month: 9 plants with 337,800 m³/d signed, 5 plants with 442,000 m³/d in hand, totaling over RMB 4.4 billion over 15 years

2026 年 9 月 1 日, a consortium led by Jiangsu United Water (603291.SH), together with Saudi National Water Company (NWC), officially signed in Riyadh the "Long-term Operation and Maintenance Agreement for the Package 10 (Northern Region) of Long-term O&M Contracts for Municipal Wastewater Treatment Plants in Saudi Arabia": covering 9 wastewater treatment plants across four provinces, with a total capacity of 33.78 万 m³/d, an estimated total revenue of 13.056 亿 Saudi Riyals (approximately RMB 23.66 亿) over the 15 年 operation period, and a treatment service fee of 0.69 Riyals/m³. This is the first contract signed under the NWC Long-Term O&M (LTOM) program with a Chinese enterprise as the lead. A week earlier, the company had won Package 11 (Northwestern Region), comprising 5 plants, 44.2 万 m³/d, with an estimated total revenue of approximately RMB 20.5 亿. The two packages combined total over RMB 44 亿.

Package 10: Nine Old Plants, 15 年 Long-term Contract

The assets covered by this contract are not concentrated in a single industrial park, but are scattered across four provinces in northern Saudi Arabia:

• Geographic Scope — Four provinces: Hail, Qassim, Al Jouf, Northern Borders, involving towns such as Unaizah, Al-Bukairiyah, Al-Muznib, Al-Ras, Hail 1, Hail 2, Baqa'a, Sakaka, and Turaif, totaling 9 wastewater treatment plants.
• Treatment Capacity — Total design capacity of 33.78 万 m³/d.
• Scope of Work — Non-shutdown rehabilitation in the first 3 年, involving process, equipment, and pipeline network upgrades, as well as completion of sludge drying lines; the latter 12 年 together with the earlier phase are counted into the 15 年 full-cycle operation, with effluent, sludge, and environmental performance all assessed according to Saudi national standards.
• Contract Status — This is Package 10 of the NWC long-term O&M program, and also the 8th O&M contract for existing wastewater treatment plants awarded under this program; at the same time, it is the first contract under this program to be formally signed with a Chinese enterprise as the lead.
• Equity Arrangement — The project company is a joint venture between United Water and Saudi Armada Holding, with United Water nominating 4 of 7 board seats. The qualifications and resources of the local partner are the key lever for securing long-cycle O&M contracts.

Payment Mechanism: Capacity Revenue + Output Revenue, Dual Guarantee

The biggest fear for long-cycle contracts is water volume falling short of expectations. This contract makes clear arrangements in its payment structure:

• Capacity Revenue — Covers capital investment and fixed O&M costs. This means that even if actual treated water volume is below the design capacity, the company can still receive guaranteed capacity revenue, effectively mitigating water volume fluctuation risks.
• Output Revenue — Corresponds to the variable operating costs of actual treated water volume.
• Standby Revenue — Used to cover unexpected expenses.
• Locked Profit Range — Capital investment, fixed O&M, and variable operating costs all have corresponding service fee coverage, with a reasonable profit range locked in.

For a water company, the significance of this mechanism lies in the change in revenue structure: from one-off engineering gross profit to stable annual service fee cash flow, with a term of up to 15 年. This improves profit quality more than winning a few more EPC projects.

Package 11: Larger Scale, Won and Pending Signing

One week before the signing of Package 10, United Water had already announced its winning bid for NWC Package 11 (Northwest Region): covering 5 wastewater treatment plants in 4 cities, with a total treatment capacity of 44.2 万 m³/d, and an estimated total revenue of approximately RMB 20.5 亿 during the 15 年 operation period.

Combined, the long-term municipal wastewater O&M projects secured by United Water in the Saudi market are expected to generate total revenue exceeding RMB 44 亿. From the establishment of its Saudi subsidiary in 2025 年 1 月 to winning two packages in succession, the journey took about a year and a half.

Why Saudi Arabia Is Bundling Old Plants into Long-Term O&M Contracts

The demand-side drivers are clear.

• National strategy sets the tone — Saudi Vision 2030 lists water security as a priority, and the National Water Strategy explicitly calls for introducing private sector participation in the rehabilitation and operation of existing water assets.
• Existing assets operate at low efficiency — In the past, wastewater plants were mostly operated by state-owned enterprises, with widespread problems of low efficiency and lax compliance. NWC's approach of bundling old plants into long-term O&M contracts is based on the logic of trading international operational capability for compliance rates, and long-cycle contracts for asset lifespan.
• Rising demand for reuse and desalination — Saudi Arabia is one of the countries with the largest seawater desalination capacity in the world, while demand for wastewater reuse grows with urbanization and industrial expansion, and the gap in operational capacity is widening.
• A much larger pipeline ahead — NWC also plans to tender an additional 51 existing wastewater plants this year, with a total capacity of approximately 88.8 万 m³/d, doubling both the number and treatment capacity of the 9 plants in this round. If the LTOM framework continues, Saudi Arabia's existing water O&M market will release multi-billion-dollar long-cycle orders.

The Approach of Chinese Water Companies Going Global Has Changed

The industry significance of this goes beyond a single contract.

In the past, the mainstream form of Chinese water companies going global was engineering contracting: securing EPC orders, delivering upon completion, and earning one-time margins. Contracts like LTOM are entirely different — they require companies to maintain a long-term local presence, provide continuous O&M, and charge based on performance. This imposes new requirements on capability structure:

• Localization capability is the threshold — The China-Saudi consortium model has been proven effective, with local partners providing qualifications and resources, the Chinese side delivering operations and technology, and both parties deeply bound at the project company level.
• Operational data must form a closed loop — Effluent, sludge, and environmental performance are assessed item by item against Saudi national standards, meaning a traceable operation and monitoring system must be established, rather than simply "meeting the standard."
• Non-stop rehabilitation is a hard skill — The first 3 年 involve retrofitting while operating, with process, equipment, and pipeline network upgrades proceeding in parallel with the supplementary construction of sludge drying lines, posing a dual challenge to construction organization and operational scheduling.
• From contractor to service provider — The revenue model shifts from engineering volume to service fees, and the valuation logic changes accordingly — this is the true meaning of "rewriting muscle memory."

Our Assessment

TIANYI TECH has long provided wastewater treatment and reclaimed water reuse system solutions for municipal and industrial park clients. We believe that the "long-term trusteeship of existing assets" model, such as Saudi Arabia's LTOM, is likely to become one of the main threads of Chinese water companies going global in the future — it bypasses the capital and access barriers of new-build markets and directly competes on operational capability, which is precisely where Chinese companies have accumulated the most through large-scale domestic operations. Three suggestions for companies preparing to go global: First, complete the establishment of local entities and joint venture structures as early as possible — local partners are not optional but the ticket to entry; Second, turn non-stop rehabilitation capability into a standardized solution — retrofitting while operating will be a universal prerequisite for such contracts; Third, prioritize securing "capacity guarantee" payment terms — keep water volume risk on the owner's side, otherwise a 15 年 long-term contract could become a 15 年 cash flow burden. Whoever completes the building of localization capability first will secure a position in this wave of hundred-billion-level opportunities.

About TIANYI TECH (TIANYI LIMITED): TIANYI TECH is deeply engaged in the field of wastewater treatment and reclaimed water reuse, committed to providing efficient, low-carbon, and sustainable water treatment solutions for municipal and industrial clients.