Israel is one of the pioneers and world leaders of desalination of sea water and much of the country's drinking water is today desalinated sea water comming from one of the five main desalination plants all of which are situated on the Mediterranean coast at Palmachim, Ashkelon, Soreq, Hadera and the latest addition Ashdod. There are another few smaller desalination facilities that desalinate brakish ground water pumped from beneath the ground. Together these plants produce over 600 million cubic meters of drinking water.
All the desalination is done using a technology called reverse osmosis which is basicaly a filteration process using very fine membranes that filter the salt out of the water. The concentrated salty water is poured in to the sea or put in huge evaporation pans where the water is evaporated and the slat left behind as a solid.
4 of the 5 plants are operated by investment companies on a Build Operate Transfer (BOT) agreement where the company hands the facility over to government after an agreed period and the water purchased includes the purchase of the facility. The BOT system is controversial because while government contracts to buy a minimum amount and the investor contracts to provide an agreed maximum in fact the sum paid is a function determined by time (20-27 years depending on the specific contracts) and may be anything between the minimum and maximum so government has a vested interest in buying less so determining a lower total cost. To understand just how problematic this is one only has to realize that the desalination plants are working at far less than their capacity (maximum agreed upon) with come claiming that the government could and should double purchase of desalinated water and cut down on the use of other water sources such as the Sea of Galilee which is over used to the extreme.
To put the above in context - while government buys the desalinated water at just under 3 NIS per 1000 liters the same water is sold to the public at 5 to 10 times more meaning that at no point is government "subsidizing" the cost but at the same time it is not uncommon for government to impose restrictions on water use. So while sale of water is ALWAYS profitable and production by desalination could be more than DOUBLED over night government prefers to buy less desalinated sea water and use limited natural recourses while curbing use !
The latest desalination plant to come on line did so in early March 2016 and is the only plant built and operated by the National Water Authourity (Mokorot) via a daughter investment company with 20% of the capital comming from Mokorot and 80% of the capital comming from banks.
All the drinking water in the Negev is desalinated sea water.