L&T Secures Rs 5,000 Crore Order for Saudi Arabia Desalination Project

Highlights:

• L&T’s Water & Effluent Treatment (WET) Business has secured a large contract worth up to Rs 5,000 crore in Saudi Arabia.
• The contract, in collaboration with Lantania of Spain, was awarded by ACWA Power, a leading developer in the Middle East.
• The Ras Mohaisen Desalination Plant will have a capacity of 300,000 m³/day, providing potable water to over one million people in the Makkah Al-Mukarramah and Al-Baha regions.
• L&T shares gained 0.25%, trading at Rs 3,201.5 on the NSE following the announcement.

L&T Expands Middle East Footprint with Major Saudi Arabia Desalination Project

Shares of Larsen & Toubro (L&T) saw a slight gain on March 14, following the announcement of a major order worth up to Rs 5,000 crore in Saudi Arabia. The contract, secured by the company’s Water & Effluent Treatment (WET) Business, marks another milestone in L&T’s expansion in the Middle East infrastructure sector.

Details of the Contract

L&T, in partnership with Lantania of Spain, signed an agreement with ACWA Power, a major Saudi-based developer specializing in power generation and water desalination projects. The contract includes the design, procurement, construction, testing, and commissioning of the Ras Mohaisen Seawater Reverse Osmosis (SWRO) Desalination Plant.

The plant will have a treatment capacity of 300,000 cubic meters per day (m³/day) and will serve as a critical drinking water source for Makkah Al-Mukarramah and Al-Baha regions, ultimately benefiting a population of approximately one million people.

According to an exchange filing by L&T, this project further strengthens its foothold in the Middle East and reinforces the company’s expertise in sustainable water management solutions.

“This is the second desalination order that L&T has received in Saudi Arabia in the recent past and it strengthens WET’s presence in the Middle East region. This large order underscores WET’s resolve to expand its regional footprint across all neighboring and business-conducive geographies,” the company stated in its regulatory filing.

Strategic Importance of the Order for L&T

The project is a strategic win for L&T, as it aligns with Saudi Arabia’s Vision 2030, which prioritizes water security, infrastructure development, and sustainability. It also highlights L&T’s growing expertise in water treatment solutions, particularly in regions facing acute water scarcity challenges.

The deal follows a previous desalination contract secured by L&T in Saudi Arabia, reflecting the company’s increasing role in the kingdom’s infrastructure and utility sector.

L&T’s Stock Performance

Following the announcement, L&T shares traded marginally higher, reaching Rs 3,201.5 per share on the NSE, marking a 0.25% increase. While the gains were limited, the order reinforces investor confidence in L&T’s expanding global presence and robust order book.

Saudi Arabia’s Push for Water Infrastructure

Saudi Arabia is one of the world’s largest consumers of desalinated water, with an ambitious pipeline of water infrastructure projects under its National Water Strategy 2030. The country has been actively investing in seawater desalination plants, given its limited natural freshwater resources.

ACWA Power, the client for this project, is a key player in Saudi Arabia’s water and power sector, managing several public-private partnerships (PPP) and build-operate-transfer (BOT) projects across the region.

Future Prospects for L&T in the Middle East

L&T’s Water & Effluent Treatment (WET) Business has been aggressively expanding in the Middle East, leveraging its expertise in:

• Desalination plants
• Water treatment facilities
• Effluent treatment systems
• Municipal water supply projects

With growing global concerns over water scarcity, L&T is well-positioned to capitalize on upcoming water infrastructure projects, not just in Saudi Arabia but across the Gulf Cooperation Council (GCC) nations, including UAE, Qatar, and Oman.

Additionally, the successful execution of this project could open doors for future collaborations with ACWA Power and other state-backed infrastructure developers in the region.