For many, many years, engineers dreamed of a Red Sea-Dead Sea pipeline that would generate hydropower. Thanks to a series of studies managed by the European Investment Bank, the pipeline is now feasible, with its main focus being a vital solution to the water crisis in the Middle East, rather than electricity.

Technical assistance brought the Red Sea-Dead Sea pipeline to this advanced stage. Water engineer Harald Schölzel and water economist Edouard Pérard came on A Dictionary of Finance podcast to explain how technical assistance works in the context of a major development project like Red-Dead, as well as another desalination plant in Gaza.

The Red Sea-Dead Sea pipeline project got going with studies completed by the World Bank in 2013 that were funded by European countries. Then the European Investment Bank and Agence Francaise de Developpement followed up with more recent studies. The aim is to:

• generate potable water in an area where it is scarce, particularly in the context of the Syrian refugee crisis, because many refugees fled to Jordan, exacerbating water scarcity. The water will be used by Jordan, Israel and Palestine
• desalinate Red Sea water and, instead of putting the brine that’s left over back into the Red Sea, to send it through a 220km pipeline to the Dead Sea
• generate hydroelectricity at stations along the pipeline as the water falls from sea level to 400m below sea level at the Dead Sea

This is important because the Dead Sea is disappearing due to agricultural and industrial use.

The technical assistance was essentially to verify that the project would have a positive impact on society and be economically justified. In detail this included five separate studies managed by the EIB that included things you might not have expected a bank to concern itself with, such as:

• risk analysis of whether the ground water might be contaminated by leaks or a burst pipe
• a survey and analysis of reef larva in the Red Sea
• a study of alternatives for the intake pipe drawing water from the Red Sea into the desalination pipe

All this technical assistance for the Red Sea-Dead Sea pipeline was paid for with grants. The studies managed by the EIB cost about EUR 3 million.

Tweet us @EIBMatt or @AllarTankler. We’d love to hear questions you’d like us to pose about financial issues and your ideas for the subjects of future episodes.

Subscribe to ‘A Dictionary of Finance’ podcast via the iPhone podcast app, Stitcher or Spotify. Please rate the podcast on those platforms, too