Red Sea – Dead Sea Project Economic analysis

The Red Sea – Dead Sea water transfer project has three objectives:

• slow down the environmental degradation of the Dead Sea;

• provide an alternative water resource in an area affected by a high water stress; and

• create an experience of regional cooperation in a sensitive geopolitical context.

It consists of a water intake in the Red Sea, a 190-km pipeline, a desalination plant with a capacity of 65 MCM/y, three hydropower generation units, pumping stations and reservoirs and a discharge into the Dead Sea. Commissioning is planned for 2021.

During the first half of 2017, ICEA carried out an in-depth economic study of the first two phases of the project, with a total cost of USD 3.5 billion. The expected impacts of the project relate to drinking water supply, irrigation, industry, tourism, environment and infrastructure. After identifying, locating and evaluating all these project components and the direct and indirect impacts throughout the region, ICEA has developed an economic simulation model. This model is based on more than 130 parameters and assumptions and 12 modules grouped into 6 components. The simulations are divided into 8 scenarios for each of the 3 stakeholders (Jordan, Israel, Palestinian Territories). Beyond that, the valorization of the existence of the Dead Sea, as a unique environmental and cultural heritage, required the use of innovative methods.

The study demonstrated the economic viability of the project, in particular with the improvement of drinking water supply conditions of the population and reflected the balancing of benefits distribution among the stakeholders.