An hour’s drive south of Jeddah through the Saudi Arabian desert sits a massive industrial complex of countless concrete buildings, clusters of white dome-shaped storage tanks and pipes extending hundreds of metres into the blue-green waters of the Red Sea.
To anyone familiar with the region, it may look like just another oil refinery. But it turns out that within this huge facility sits the world’s most advanced water desalination operation, a high-efficiency, solar-powered plant that converts 600,000 cubic metres of seawater into drinking water every day. That is enough to meet as much as 40% of Jeddah's - and the surrounding region’s - freshwater needs.
What is distinctive about this Rabigh 3 complex, owned by Riyadh-based ACWA Power, is the technology it uses. Instead of deploying oil-fired thermal processing, it relies on reverse osmosis (RO), a purification method which squeezes seawater at high pressure through fine membranes, cutting energy use by 80% compared with traditional desalination methods used in the Gulf.
What’s more, the Rabigh 4, which will become operational later this year, will run on solar power during the day, drawing on the grid only at night. A dedicated photovoltaic facility – itself among the world’s biggest – helps reduce grid electricity consumption by roughly 45% and lower the carbon intensity of every litre of water produced.
ACWA Power develops and operates desalination plants across at least 14 countries in the Middle East, Africa and Central and Southeast Asia. The company aims to use seawater RO technology across all its desalination plants, up from roughly two thirds today. One of the flagship projects is the Taweelah plant in Abu Dhabi, which is over 40% bigger than the previous largest, which has capacity to produce nearly 1 million cubic metres of water a day.https://acwapower.com/en/what-we-do/projects/taweelah-ro-desalination-iwp/
Tapping into private capital
For all its remarkable achievements, however, ACWA Power is not an isolated success story. It is just one of a growing number of world-leading water technology companies based in emerging markets.
In developing markets, water services have traditionally been the responsibility of municipalities. But the scale of capital investment needed for new connections, network expansions and infrastructure upgrades at a time of stretched local budgets, presents private-sector companies based there with attractive opportunities to help finance, build and operate water infrastructure, drawing on their specialist expertise and technology.
What is happening in the Middle East is also unfolding in Latin America. There, the percentage of the population served by public-private partnerships is projected to grow to 35% by 2030 from the current 30%, putting the region above the global average (see chart).
Source: Envisager, 2022
Brazil’s Companhia de Saneamento Básico do Estado de São Paulo (Sabesp), already one of the world’s largest water and waste utilities, is among those benefiting from this trend.
Currently, Sabesp serves about 15% of the Brazilian population. But the company plans to expand towards full national coverage in the coming years as it ramps up capital investment and improves operational efficiency through technology, supporting earnings growth.
Sabesp is also building a pioneering desalination plant based on RO technology on the island of Ilhabela, off the coast of São Paulo.https://www.ilhabela.sp.gov.br/portal/noticias/0/3/13679/prefeitura-de-ilhabela-e-sabesp-unem-esforcos-para-implantar-a-primeira
The plant is designed to integrate solar power and supply drinking water for around 8,000 people when it becomes operational later this year – offering a model of environmental innovation for not only other Brazilian coastal cities but for other countries with water resource challenges.
Chips and PFAS
Emerging Asia is another region where water tech is developing fast. Data from the European Patent Office shows China and South Korea accounted for around 5% of the global share of international patent families in the sector, while India shows high degrees of specialisation.Measured by the Revealed Technological Advantage index which indicates a country’s specialisation in terms of water-related innovation relative to its overall innovation capacity. It is defined as a country’s share of International Patent Families (IPFs) in a particular
field of technology divided by the country’s share of IPFs in all fields oftechnology. An RTA above one reflects a country’s specialisation in a given technology. Israel has an RTA index of 3.1, while India has 1.9, higher than that of EU, the US and Japan.
The analysis also showed contributions from Chinese patent applicants increased in every water-related technology field during the most recent five-year period, particularly in water treatment and protection against water hazards. This trend is in line with China’s broader environmental policy agenda and its efforts to address water pollution and scarcity challenges.
Shenzhen‑listed Vontron Technology, part of CRRC Group, is a leading membrane manufacturer for RO water treatment. It specialises in water purification and treatment, with high‑quality RO membranes that remove dissolved salts, impurities and contaminants from water as a core offering. Its technology is widely used in industrial processes, including semiconductor manufacturing, which requires vast quantities of impurity-free “ultrapure water”. Industry estimates suggest that as much as 30 litres are required for a single chip. Vontron’s membranes are supplied to customers in more than 130 countries worldwide.
There are more reasons to expect demand for such advanced water purification technologies to grow in China. In recent years, the country has been tightening regulation to tackle water pollution, placing certain PFAS—contaminants known as “forever chemicals”—under stricter environmental controls. In July, Sichuan Province introduced China’s first discharge limits for specific PFAS in wastewater, following the US and Europe which have been more aggressive in tightening rules on PFAS removal.
Water stress everywhere
Water stress is not only an emerging market story. Demand for intelligent water solutions is rising in developed markets, where extreme weather and shifting rainfall patterns make droughts more frequent and intense. A recent study showed half of the world’s 100 largest cities face high pressure on their water resources, with those including Beijing, New York, Los Angeles, Rio de Janeiro and Delhi among those under extreme stress, while London, Bangkok and Jakarta are classed as being highly stressed.https://www.theguardian.com/environment/2026/jan/22/half-world-100-largest-cities-in-high-water-stress-areas-analysis-finds
For investors, this matters. Water conservation is now a core feature ofresponsible investing. Anyone pursuing environmental and sustainability objectives cannot ignore companies tackling these risks, many of which are in emerging economies. Allocating capital to high‑quality emerging market companies in the water sector can provide long‑term growth and tangible impact for both developed and emerging economies as billions of people face the prospect of severe water scarcity aggravated by climate change, rapid population growth and concerns over pollutants such as PFAS.
From Saudi Arabia and Brazil to China, emerging market countries are pioneering innovative responses to mounting water stress, offering long-term investors a route to tap into structural growth, new sources of return and real‑world impact.
