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  GE Vernova signs 24GW Iraq agreement

  11 April 2025

  US-headquartered energy technology provider GE Vernova has signed a memorandum of understanding (MoU) with the Iraqi government for the establishment of 24GW of combined-cycle gas turbine power plants in the country.

  Iraq Prime Minister Mohammed Al-Sudani oversaw the MoU signing, which falls within a strategic cooperation framework with the US-based original equipment manufacturer.

  The MoU includes provisions for securing external financing through "major global banks",  the Iraq Prime Minister's Office said in a Facebook post on 9 April.

  Iraq's Electricity Ministry (MoE) also signed a second MoU, with UGT Renewable Group, to implement a "fully integrated solar power project with a capacity of 3GW along with battery energy storage systems of up to 500 megawatt-hours (MWh)".

  The prime minister's office said the MoU includes the modernisation of power transmission and distribution lines; the development of up to 1,000 kilometers of new high-voltage direct current (HVDC) transmission infrastructure; and a two-year programme for technology transfer, training, operation and maintenance.

  It is unclear if the power and transmission scope falls within the GE Vernova or UGT Renewable Group's MoU.  

  The statement added that the project will be financed by the US Export-Import Bank (Exim), the UK Export Finance Agency, and JP Morgan, which will serve as the lead arranger.

  Al-Sudani also presided over the signing of a third MoU between the Federation of Iraqi Chambers of Commerce and the US Chamber of Commerce to formalise and expand the economic cooperation between the two countries.

  In February, GE Vernova completed the upgrades of “several key” power plants in Iraq.

  The overall upgrade project covers 46 gas turbines across 12 power plants, adding up to 500MW to Iraq’s national grid before the summer of 2025.

  According to GE, some of the power plants included in this project have already transitioned from heavy fuel oil (HFO) to natural gas, with a capacity increase of approximately 260MW. These plants include Ninawa, Al-Diwaniyah, Hilla, Karbala, Shat Al-Basra, Najibiya, Samawa, Dhiqar, Al-Khairat and Al-Haidariya.

  GE Vernova added that other plants are expected to be modernised within the summer of 2025, with an expected additional increase in capacity of approximately 250MW.

  In addition, the firm announced the successful installation of its Advanced Gas Path (AGP) upgrades on several 9. E gas turbines powering the Al-Quds and Dhiqar power plants, and MXLII upgrades on 13E2 gas turbines powering the Al-Mansouriya power plant.

  Iraq periodically suffers from power outages, especially during the summer months, when increased cooling requirements overwhelm its power plants and electricity grid.  

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  Jennifer Aguinaldo
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  Egypt outlines future rail project plans

  11 April 2025

  Egypt is undertaking a transformative expansion of its railway infrastructure, aiming to enhance connectivity, boost economic development and promote sustainable transportation.

  According to the official website of the National Authority for Tunnels (NAT), eight key projects, including metro lines, high-speed rail and light rail transit (LRT), are currently in the study stage.

  The first project entails the extension of Cairo Metro Line 1 to Shubra El-Kheima. The project involves extending the metro’s Line 1 from El-Marg north to Shubra El-Kheima, spanning about 19 kilometres (km) with 14 stations.

  

  The second project, Cairo Metro Line 6, is a 34km-long line running parallel to Line 1. It will run north-south through the Greater Cairo neighbourhoods of Shubra El-Kheima and New Maadi, ending at the beginning of Ain El-Sokhna Road, Al-Khosos.

  

  The third project is Line 4 of the high-speed train network extending from Port Said to Abu Qir in Alexandria.

  Located in the North Delta region, the network will link Port Said and Abu Qir City in Alexandria. The line will have a total length of about 250km and 14 stations, passing through six governorates: Port Said, Dakahlia, Damietta, Kafr El-Sheikh, Beheira and Alexandria.

  

  The line will ultimately connect with the Alexandria metro system, which is under construction. NAT and the French-Egyptian consortium of the local Orascom Construction and Colas Rail signed a €1.3bn ($1.39 bn) contract to build the Alexandria metro system.

  The expansion of Cairo Metro Line 4 is part of NAT’s planned comprehensive railway programme.

  Cairo Metro’s Line 4 is expected to be built in four phases, with the first phase already under construction. The first phase stretches 19km and has 17 stations, starting from the western ring road and ending in Fustat, Old Cairo. 

  NAT is currently studying phases two, three and four of Line 4.

  The second phase of the project will extend over 33km and include 22 stations, connecting Fustat, Nasr City and New Cairo.

  The third phase aims to connect the Ashgar Gardens and Al-Hosary areas with a rail line that will span over 16km.

  The fourth phase will be over 38km long and will connect the Al-Rehab area with the capital’s international airport to the east of Cairo.

  

  The fifth project is phase five of the LRT system that links Cairo to the New Administrative Capital and 10 Ramadan City.

  Construction on the first and second phases is complete, while work is progressing on phases three and four of the scheme. According to data from the regional projects tracker MEED Projects, Beijing-headquartered China Railway Group and Avic International are responsible for all the construction work.

  

  The fifth phase of the project extends from the New Administrative Capital, crossing the Cairo-Ain Sokhna Road, to the industrial zone of the New Administrative Capital. It is about 7.8km long and has one station.

  The fifth phase of Cairo Metro’s Line 3 comprises the sixth project. It will extend over 7.5km and include five stations to connect Heliopolis with Cairo International airport.

  The construction works on Line 3 are largely completed. In April, NAT signed a memorandum of understanding (MoU) for package 4b of the fourth phase with a consortium led by Vinci, Bouygues, Arab Contractors and Orascom Construction to submit the initial design and the technical and financial presentation of the project.

  

  The seventh project comprises the rehabilitation and maintenance of Cairo Metro’s Line 2. The scope involves modernising 39 Line 2 trains to reduce travel times, accommodate increasing passenger numbers and reduce maintenance costs.

  The construction works on Line 2 began in 2010 and were completed in 2023.

  The final NAT project comprises a line extending from the end of the second phase of Cairo Metro’s Line 4 at Al-Rehab to Cairo International airport.

  It will pass through New Cairo, Madinaty, Shorouk, Badr City and New Heliopolis and end at the New Administrative Capital to connect with the light rail train at the international airport station.

  

  According to MEED Projects, Egypt has been the most active market for the rail sector in the Mena region, with contracts worth over $34bn awarded in the past decade.

  Line 6 plan 

  In November last year, MEED reported that Egypt is planning to issue the tender for the construction of Cairo Metro Line 6 in 2025. The project will be constructed in two phases, and works will be completed in eight years.

  In October last year, Egypt’s Ministry of Transport appointed a joint venture of French engineering consulting firms Egis and Setec as the consultants to study the second phase of Cairo Metro Line 6.

  In November 2022, MEED reported that France’s Alstom had signed a framework agreement with NAT to design, build and maintain Cairo Metro Line 6.

  This was followed by NAT signing a memorandum of understanding (MoU) with Alstom for Line 6 in March 2022.

  At the time of the MoU signing, Alstom was expected to work in consortium with French engineering company Colas and local companies Arab Contractors and Orascom on the project. Construction is expected to require six years to complete.

  The project is backed by French funding as part of agreements signed by France’s Finance Minister Brune Le Maire during a trip to Egypt in 2021.

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  Yasir Iqbal
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  UAE banks dig in for new era

  11 April 2025

  

   

  Gulf decision makers, like their counterparts elsewhere in the world, are gauging the potential impact of the world’s new tariff regime.

  Amid the global economic turmoil emanating from Washington DC, UAE banks have reason to be confident about their prospects of withstanding the negative effects, after a strong 2024 that saw double-digit credit growth and solid profits across the board.

  Full-year loan growth stood at 11% in 2024, notes ratings agency Fitch Ratings, while UAE banks’ profits reached a record-high level, with a 19.1% return on average equity.

  Surprising success

  Loan growth surprised on the upside, reflecting stronger activity from government-related entities (GREs), which has provided good business for Emirati banks. For example, majority government-owned Emirates NBD had almost one-quarter of its loan book exposed to the Dubai government and its GREs. 

  The broader outlook is positive for UAE banks in 2025. Amid healthy operating conditions and robust liquidity, lending growth should remain close to double figures this year.

  The combined net income of Fitch-rated banks was AED80bn ($19.8bn) in 2024, up from AED76bn ($18.8bn) in 2023. This rise was driven by a 10% expansion of the banks’ pre-impairment operating profit, contained loan impairment charges – due to the favourable operating environment – and strong coverage of already crystallised problem loans at most banks, said Fitch Ratings.

  The UAE’s largest bank, First Abu Dhabi Bank (FAB), reported a 13% year-on-year increase in pre-tax profits to AED19bn ($4.7bn), supported by revenue growth of 15%. 

  “UAE banks are at the top of the cycle,” says Anton Lopatin, UAE bank analyst at Fitch Ratings. “At Fitch, we’ve upgraded a lot of standalone ratings for banks in the last 24 months. Together with other factors that reflected that in the last two years we have seen some the highest profits ever in the UAE, because of the strong liquidity and the healthy economic environment.”

  Although profitability is expected to decrease marginally in 2025, UAE banks will continue to benefit from solid internal capital generation and high shareholder support, according to S&P Global, another ratings agency.

  Taxes, rates and regulations

  UAE banks, like other companies active in the country, have also had to cope with the introduction of corporate tax, imposed in mid-2003 at an average 9% rate. Even so, UAE banks realised a high return on equity in 2024, despite it being the first full year in which banks paid corporate tax. 

  UAE banks have benefited from the higher-for-longer interest rates, an avenue of earnings that is gradually closing off in light of the US Federal Reserve’s protracted series of rate cuts. Nonetheless, analysts see the impact remaining supportive through 2025.

  “The market consensus is that in 2025, there will be a maximum of two cuts in interest rates. That would mean banks would likely report another return on average equity close to 20% again, in line with what we saw last year,” says Lopatin.

  Another source of support is the new credit risk management standards introduced by the UAE Central Bank in November, which are likely to strengthen banks’ long-term creditworthiness.

  “From a ratings agency perspective, this is positive, as … target banks have to become more prudent in terms of how they classify loans, and how they book provisions against new impairment cases. This means they should be more conservative than they used to be,” says Lopatin.

  The standards are aimed at improving the transparency of the banks’ asset quality and ensure stronger provision coverage for problem loans. Consequently, capital and profitability metrics should face less pressure in times of stress, notes Fitch.

  “The Central Bank of the UAE targets the sector average impaired loan ratio to be less than 5% in the long-term. The current average is 4%, but we are in the positive part of the cycle,” says Lopatin.

  Some banks may report higher Stage 2 or Stage 3 loans ratios due to the new standards, but Fitch maintains its forecast sector-average impaired loans ratio at 4% for 2025 because the impact on most large and medium-sized banks is likely to be limited, and robust growth should continue to dilute increases in Stage 3 loan ratios.

  Pressure has been exerted on banks to offload some of their bad loans, most notably in Abu Dhabi.

  The process got rolling in 2023, when Abu Dhabi Commercial Bank (ADCB) offloaded a $1.1bn loan portfolio to US investment fund Davidson Kempner, as part of a move to rid its balance sheet of corporate defaults. The lender is now looking to package off more non-performing loans by the end of 2025 and is reported to be in the early stages of studying such a deal.

  In January, FAB also announced its intention to offload some impaired loans and is reportedly looking to sell its portfolio of non-performing loans worth about $800m to Deutsche Bank. This process mirrors what is happening in Saudi Arabia, where the authorities want banks to securitise some of the impaired loans.

  Opportunities abroad

  While the domestic economic upturn and the servicing of GREs’ credit needs will underpin future Emirati bank growth, lenders also continue to look out for new opportunities beyond the GCC home market.

  Turkiye is one of the more promising prospects for UAE banks to grow their footprints. Although an attempt last year by FAB to acquire a stake in the country’s fourth-largest private bank, Yapi Kredi, did not go through, in January Dubai Islamic Bank announced an increase in its shareholding in Turkish financial services provider TOM Group from 20% to 25%.

  Meanwhile, Emirates NBD and FAB acted as coordinators and bookrunners on a $1.2bn loan for Turkiye Wealth Fund in March of this year. The sovereign fund raised a two-year syndicated loan from 20 banks.

  Overseas expansion, mixed with continued domestic credit growth opportunities, should help UAE lenders maintain their recent performances – whatever global headwinds result from US President Donald Trump’s new era of trade barriers.

  ---

  MEED’s May 2025 report on the UAE includes:

  > GOVERNMENT & ECONOMY: UAE looks to economic longevity
  > BANKING: UAE banks dig in for new era
  > UPSTREAM: Adnoc in cruise control with oil and gas targets
  > DOWNSTREAM: Abu Dhabi chemicals sector sees relentless growth
  > POWER: AI accelerates UAE power generation projects sector
  > CONSTRUCTION: Dubai construction continues to lead region
  > TRANSPORT: UAE accelerates its $60bn transport push
   

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  James Gavin
• 
  Madinat Zayed project has three bidders

  11 April 2025

  

   

  A team comprising Belgium’s Besix and Egypt’s Orascom Construction is understood to have submitted a third bid for the contract to develop and operate the Madinat Zayed open-cycle gas turbine (OCGT) power generation plant project in Abu Dhabi.

  Two other teams, led separately by France’s Engie and Saudi Arabia’s Aljomaih Energy & Water, submitted bids for the Madinat Zayed OCGT independent power producer (IPP) project on 28 March, as MEED reported.

  Aljomaih is understood to have partnered with the local Etihad Water & Electricity (Etihad WE) and China Energy Engineering Corporation (CEEC) for its bid, while Engie has partnered with China’s Sepco 3, according to industry sources.

  The Madinat Zayed IPP is expected to begin commercial operations in Q3 2027. It will provide up to 1,500MW of backup generation, which can be operational “at very short notice”. 

  “Gas-fired plants like Madinat Zayed are key to ensuring a reliable energy supply while the country transitions to a decarbonised water and electricity system,” state utility and offtaker Emirates Water & Electricity Company (Ewec) said when it issued the tender for the contract in July last year.

  “[This type of plant] will be particularly important for supporting the growth of solar power, providing crucial flexibility during peak power demand periods and acting as a bridge to a future powered exclusively by clean and renewable sources.”

  Major capacity buildout

  Abu Dhabi’s current electricity generation installed capacity is about 22GW, with gas-fired plants accounting for 68.7% of the total and renewable and nuclear power contributing 12% and 19%, respectively.

  Construction work is under way for the 1.5GW Al-Ajban solar photovoltaic (PV) power plant and a 2.5GW combined-cycle gas turbine (CCGT) plant in Fujairah.

  Six major generation projects in Abu Dhabi are expected to be awarded this year. These are the 2.5GW Taweelah C CCGT scheme, the Al-Khazna and Al-Zarraf solar PV schemes, the Al-Sila wind facility and Bess 1, in addition to the Madinat Zayed OCGT scheme.

  In January, Ewec and Abu Dhabi Future Energy Company (Masdar) signed a power-purchase agreement for a 5,200MW solar PV plant with a 19 gigawatt-hour battery energy storage system, which is expected to provide round-the-clock solar power.

  The project is expected to reach financial close this year.

  Related read: AI accelerates UAE power generation projects sector

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  READ THE APRIL 2025 MEED BUSINESS REVIEW – clck here to view PDF

  Regional construction heads underground; Riyadh reaps both diplomatic and economic success; Luxury GCC hospitality projects drive tourism

  Distributed to senior decision-makers in the region and around the world, the April 2025 edition of MEED Business Review includes:

  > AGENDA 1: Traffic drives construction underground > AGENDA 2: Muted public spending hinders global tunnelling > IRAQ: Chinese contractors to benefit from BP’s investment in Iraq > TOURISM 1: Beaches and luxury drive regional tourism > TOURISM 2: Region’s hotel projects pipeline balloons > EDMOND DE ROTHSCHILD: Investing in Saudi Arabia’s infrastructure opportunities > BAPCO: Securing Bahrain’s hydrocarbons potential > DATA CENTRES: GCC’s top five data centre projects > POWER: GCC battery storage pipeline hits over 55GWh > SAUDI PPPs: Rise in PPPs reflects Saudi budgetary pragmatism > SAUDI ARABIA REPORT: Riyadh enjoys buoyant fortunes > GULF PROJECTS INDEX: Gulf index sees minor correction > CONTRACT AWARDS: Project awards slump notably in February > ECONOMIC DATA: Data drives regional projects > OPINION:  Is this the end for Middle East studies?

  To see previous issues of MEED Business Review, please click here

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  Jennifer Aguinaldo
• 
  Aramco subsidiary to buy LNG from US facility

  11 April 2025

  Register for MEED’s 14-day trial access 

  Saudi Aramco has signed a sale and purchase agreement with US-based NextDecade Corporation (NextDecade) for liquefied natural gas (LNG) from a planned fourth train at the Rio Grande facility located at the Port of Brownsville in the US state of Texas.

  An Aramco subsidiary will purchase up to 1.2 million tonnes a year (t/y) of LNG for 20 years on a free-on-board basis, at a price indexed to Henry Hub, subject to a positive final investment decision (FID) on Rio Grande train 4.

  Achieving a positive FID on Rio Grande train 4 will be subject to, among other things, entering into appropriate commercial arrangements, and obtaining adequate financing to construct the train and related infrastructure, NextDecade, the operator of the project, said.

  The giant Rio Grande facility is expected to have a total liquefaction capacity of 48 million t/y.

  The sale and purchase agreement between Aramco and NextDecade converts a previous non-binding heads of agreement signed last June.

  ALSO READ: Aramco raises stake in LNG project financier MidOcean Energy

  NextDecade signed a similar LNG supply deal last May with Abu Dhabi National Oil Company (Adnoc). As part of this offtake agreement, Adnoc will purchase 1.9 million t/y of LNG on a free-on-board basis at a price indexed to Henry Hub. This deal is also subject to an FID by NextDecade on the fourth and fifth processing trains at the Rio Grande complex.

  In addition to the offtake agreement, Adnoc also acquired an 11.7% stake in phase one of the Rio Grande LNG export project, marking its first investment in the US. Adnoc acquired the equity stake in the first phase of the project through an investment vehicle of US-based Global Infrastructure Partners (GIP).

  Adnoc acquired a portion of GIP’s existing equity interest in phase one of the Rio Grande LNG project, while NextDecade retains its previously announced expected economic interest in phase one, as well as its interests in the planned train 4 and train 5 expansion capacity.

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  Indrajit Sen