Act II · The stateStory 19 of 31
Water and the budget
The state buys desalinated water for more than it sells water for, and it plans to buy much more. Its bill for buying water is set to be nearly four times what it was in 2016.
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When the dams are low, Cyprus drinks the sea. Contractors, most of them private companies, run the desalination plants and the state buys what they produce. In 2023 it was more than half of the drinking water the state supplied.
What the Water Development Department pays each year to buy water, almost all of it desalinated, € million. Lighter: the 2026 budget and the 2027 bill.
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State budget, Water Development Department, purchase of water (article 03213), cash basis. 2025 to 2027 from the 2027 budget bill; earlier years from the budget outturns as collected for the sister project Fragmata. The line also covers recycled water, about €7 m in 2024.
What the numbers say
The line in the budget is called "purchase of water". It was €44 million in 2016 and €110 million in 2025. The budget for 2026 has €142 million and the bill for 2027 has €168 million. Almost all of it is desalinated water.
Up to 2025 the rise was price more than volume. The plants produced about 50 million cubic metres in 2021 and 62 million in 2023, and according to the department's reports they produced more than that in 2016, for half the money. The increases budgeted for 2026 and 2027 add volume as well, from new temporary and mobile units.
Price per cubic metre at the five permanent desalination plants, without VAT. Open circle: the price in the contract. Filled: the average actually paid in 2023, after the adjustments the contracts allow.
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Audit Office, special report ΠΕ/01/2025 on water management, Appendix IX and Appendix XII, with data from the Water Development Department. The selling price is the bulk price charged to the water boards of the time.
Each plant has a price in its contract, between €0.51 and €0.87 a cubic metre. The price actually paid is adjusted during the contract, and desalination runs on electricity, so the cost of energy is the likely reason it rose. In 2023 the state paid on average between €1.02 at Larnaca and €1.75 at Dhekelia.
The state then sold water in bulk to the water boards of the time at €0.82 a cubic metre. At every one of the five plants it paid more than that.
There is one more cost. The contracts guarantee the plants a minimum, so the state pays a standby charge for water it does not order. In 2023 that came to €5.4 million, VAT included.
What it means for you
Your water bill does not show this. You pay your district organisation, which buys water in bulk from the state; at the time of the audit the bulk price was €0.82 a cubic metre. The desalinated part of that water cost the state up to about twice as much to buy; water from the dams costs less. Whatever the price does not cover comes from the general budget.
In 2025 the Water Development Department spent €239 million in all and took in €49 million from selling drinking water. In the 2027 bill it spends €288 million, which also covers dams and irrigation. That is about €290 for every resident, before what it earns back from selling water.
It is part of a larger pattern. Cyprus spends 2.1% of its economy on housing and community services, three times the EU average of 0.7%, and water supply is more than a third of that: €267 million in 2024, up from €146 million in 2019.
What people argue
Should water cost what it costs to make? EU water law asks that the price of water recover its cost, and Cyprus has promised the EU higher water charges as part of its green tax reform; regulations raising them are now in force. The argument for is that a price below cost invites waste in a country that is short of water. The argument against is that water is a necessity and that households and farmers would carry the increase.
More plants, or less waste? On 2 September 2026 the cabinet approved three more permanent plants, at Dhekelia, Agia Thekla and Polis Chrysochous, alongside one already approved for east Limassol. The announcement gave no cost. The case for more plants is that rainfall can no longer be relied on. The case against relying on them alone is that water saved, by mending leaking networks or reusing treated water, does not have to be bought.
Which side convinces you?
More plants, or less waste?
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Who carries the risk on price? In 2023 the state paid far more than the prices in the contracts at every plant, so the risk of rising costs sits with the state and not with the contractor. The audit table that shows this does not say what the adjustment is for; energy is the obvious candidate.
How we know
The purchase-of-water line for 2025, 2026 and 2027 is from the 2027 budget bill, on a cash basis. Earlier years are from budget outturns collected for our sister project Fragmata and were not re-read for this story. The line also includes recycled water bought from the district organisations, about €7 million in 2024, and the budget does not separate it.
Prices per cubic metre, volumes and the standby charge are from the Audit Office's special report ΠΕ/01/2025 on water management, with data supplied by the Water Development Department; prices are without VAT. The department's own annual report gives slightly lower volumes. The €0.82 bulk price is from the same report and predates the higher water charges now in force, so it may have changed.
The three new plants are from the cabinet's announcement of 2 September 2026.
The comparison of what the department spent and what it earned from selling water is from the budget. The two lines do not cover exactly the same water, since sales include water from the dams, so the difference between them is not an official subsidy figure. No official figure for the subsidy exists.