Region plans vital big grid connections
29 May 2023

The mantra “there will be no transition without transmission” dominated this year’s World Utility Congress, which was organised by Abu Dhabi National Energy Company (Taqa) and held in the UAE capital on 8-10 May.
“There will be no transition without interconnectivity with our neighbours. If we are not interconnected, we are not using the full capacity of our [electricity] network,” UAE Energy and Infrastructure Minister Suhail bin Mohamed al-Mazrouei said at the congress.
For the GCC states in particular, their ability to procure affordable and large-scale solar energy capacity, and the wide discrepancy in peak demands between the winter and summer months, which often results in substantial idle capacity, make it imperative to connect to other states or regions.
“Links to other GCC states and Central Asia will enable our electricity system to run more efficiently. Some have access to wind, others to solar or hydropower. We also have different peak hours,” Al-Mazrouei said. “We need to consider [these opportunities] and make the investments.”
Boosting transmission
In recent years, there has been a flurry of projects to build or enhance electricity transmission links within the GCC states, as well as with neighbouring countries such as Iraq and Jordan.
Contracts were awarded this year for the construction of overhead transmission lines connecting the GCC grid to Iraq via Kuwait, as well as a link between Iraq and Jordan.
Other projects in the early stages include a second connection between Saudi Arabia and Iraq, Saudi Arabia and the UAE, and the UAE and Oman.
Beyond the GCC, a $1.8bn electricity link between Saudi Arabia and Egypt is under construction. The project will facilitate the exchange of 3,000MW of electricity between the two countries through overhead transmission lines as well as high-voltage, direct current (HVDC) subsea cables.
The most ambitious plans include projects that will pipe electricity from Egypt, Tunisia and Morocco to European countries including Greece, Italy and the UK.
Some have access to wind, others to solar or hydropower. We also have different peak hours … we need to consider [these opportunities] and make the investments
UAE Energy and Infrastructure Minister Suhail bin Mohamed al-Mazrouie
Shifting peaks
Energy security has spurred investments to interconnect electricity grids between national borders and time zones. The pace of development is reminiscent of the advent of data interconnectivity two decades earlier.
Grid interconnections are also critical for the integration and optimisation of renewable energy, according to Jessica Obeid, a partner at New Energy Consult.
“Grid interconnections enable efficient management and mitigations of stability challenges linked to the integration of variable renewable energy such as wind and solar into the grid,” she says.
These interconnections enable the deployment of renewable energy where land is vast and resources are abundant, to be dispatched in energy load centres.
More importantly, they reduce the curtailment of renewable energy systems through electricity exchange, balancing supply and demand at various periods.
UK startup Xlinks aims to connect Morocco to the UK via four HVDC subsea cables stretching 3,800 kilometres across the Atlantic. “Long distance interconnectors solve the intermittency of renewables as the sun is always shining or wind is always blowing elsewhere,” says Simon Morrish, Xlinks’ CEO.
“The idea is to generate clean energy and then move it to meet demand, which is much more economic than relying solely on domestic capacity.”
Xlinks aims to generate 10.5GW through solar and wind farms in Guelmin Oued Noun and pipe about 40 per cent of that energy through subsea cables that will have to pass through Spain, Portugal and France. The UK will receive 3.6GW of clean, affordable energy – equivalent to 8 per cent of its electricity needs – by 2030.
Soaring data demand drives boom
Desertec’s long shadow
The scale of Xlinks’ ambition draws comparison with an earlier project, the Desertec Industrial Initiative (Dii), which launched in 2009, but ironically has yet to see the light of day.
Dii had planned to build renewable energy plants globally, including in Morocco, and supply up to 15 per cent of Europe’s power demand by 2050.
Xlinks’ proponents expect to succeed where Desertec failed, however. “Generation costs are more than 90 per cent lower than they were then, which makes the project economically – as well as politically – attractive,” Morrish says.
Xlinks’ point-to-point design with an exclusive energy supply for the UK is expected to eliminate challenges associated with trying to use third-party transmission networks.
Although the technologies are all mature, Morrish says iterations have led to a much lower levelised cost of transmission over these distances. There is also more expertise for the HVDC system beyond the original equipment manufacturers.
Average electricity prices in Europe have increased significantly over the past 10 years and power delivered from the Middle East and North Africa (Mena) region is competitive with other reliable low-carbon solutions, according to Morrish.
The existence of clear renewable targets in Europe could also benefit Xlinks’ project, as well as similar schemes, such as the EuroAfrica Interconnector, which aims to link Egypt to Cyprus and Greece, and the Elmed Mediterranean project that links Tunisia to Italy.
Morocco’s renewable energy leadership, which includes having implemented legislation designed to facilitate the export of renewable energy, is another positive factor.
“Previous projects have typically focused on the recipient jurisdiction, such as Europe, rather than understanding the drivers for the generation country,” says Morrish. “By focusing on the benefits to the Mena region, in this case Morocco, Xlinks has obtained support from both Morocco and the UK.”
The 13-year gap between Desertec and Xlinks has not necessarily changed the mindset of some industry players, who are just beginning to grasp the complexities involved in other decarbonisation technologies such as green hydrogen and carbon capture and storage.
“It is an excellent concept, but it will be exceptionally difficult, if not impossible, to execute given the high demand for HVDC cables, financing and political considerations,” says a Dubai-based contractor.
Unlike the more reasonably- structured interconnections between the GCC or Mena states, the scale and scope of Xlinks’ scheme and other similar projects will require export credit and multilateral development agency support in combination with project finance debt. Experts say this is critical, but not entirely unprecedented.
For instance, Taqa’s decision to contribute $31m in the startup’s early funding round, which also includes $6.2m from UK-headquartered Octopus Energy, appears to signify investor appetite for the project. The scheme is expected to boost foreign direct investment and create thousands of jobs in Morocco during its construction phase.
Electricity demand is increasing at alarming rates, in direct relation to the impact of climate change and the increases in temperatures, cooling and water demand, which reduces the available supply for exports
Jessica Obeid, New Energy Consult
Political undertones
In December 2022, Saudi Investment Minister Khalid al-Falih said the kingdom is keen to join an agreement between four countries to export clean electricity from Azerbaijan to Europe.
He was referring to an accord signed by Azerbaijan, Georgia, Romania and Hungary to build an undersea cable in the Black Sea transmitting energy from Caspian Sea wind farms to Europe.
The agreement involves a 1,100-kilometre, 1GW cable running from Azerbaijan to Romania. It is part of broader EU efforts to diversify energy resources away from Russia amid the Ukraine war.
This provides an alternative to Saudi Arabia’s grid expansion plans, and to the Saudi-Egypt link, as Egypt itself is involved in negotiations to link its electricity grid to Italy, Cyprus and Greece.
Beyond financing, there are other challenges for both intra-Mena and intercontinental grid connections.
An efficient electricity exchange market is necessary, notes Obeid. Another key issue is the unsustainable increase in demand in Mena states.
Figure1: Saudi-Egypt interconnector route

“Electricity demand is rising alarmingly, in direct relation to the impact of climate change and the increases in temperatures, cooling and water demand, which reduces the available supply for exports,” she says.
Plans to interconnect with Iraq, which has been heavily reliant on Iran for energy imports, can also be tricky. “The incentive is mostly political. Many countries have expressed interest in connecting their grids to Iraq’s, but none of these projects have yet materialised,” says Obeid.
“Linking Iraq to the Saudi grid is bound to be more viable and cheaper for Iraq compared to alternative options such as electricity exports from Jordan. But that is pending a political decision and would get Saudi Arabia and the GCC political and economic influence in Iraq.”
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Dewa and Masdar reached financial close for the $1.5bn project in 2024. Once completed, the sixth phase will increase the solar park’s total production capacity to 4,660MW.
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Adnoc Onshore extends bid deadline for field facilities project3 August 2026

Abu Dhabi National Oil Company’s onshore business (Adnoc Onshore) has given contractors extra time to prepare bids for a project to build on-plot and off-plot facilities at the Rumaitha and Shanayel fields, part of the Northeast Bab cluster of oil fields in Abu Dhabi.
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Adnoc Onshore issued the main tender for the engineering, procurement and construction (EPC) works package for the Rumaitha and Shanayel on-plot and off-plot facilities project on 19 June, MEED previously reported.
The project operator has now extended the deadline for contractors to submit technical bids to 5 August, from 2 August previously, according to sources. The prior deadline had been 30 July.
Adnoc Onshore issued the expression of interest for the Rumaitha and Shanayel on-plot and off-plot facilities project in early December, with contractors submitting their responses later that month, MEED previously reported.
The prequalification and ongoing tendering process is understood to result from Adnoc Onshore revising its strategy for executing EPC works on an earlier, larger project covering the Northeast Bab cluster, which comprises the Al-Nouf, Rumaitha and Shanayel fields.
MEED reported in December that Adnoc Onshore had cancelled the engineering, procurement and construction management (EPCm) phase it launched in 2024 for the Northeast Bab on-plot and off-plot facilities project in favour of executing the scheme under a conventional EPC model.
The operator awarded a contract to state-owned China Petroleum Engineering & Construction Corporation (CPECC) to carry out EPCm services for the Northeast Bab off-plot facilities package in October 2024. However, the contract was subsequently cancelled last year.
Separately, Adnoc Onshore received bids during the second quarter of 2025 for the EPCm tender covering the Northeast Bab on-plot facilities package, but that procurement process was also later cancelled.
Project scope of work
The detailed scope of work on the Rumaitha and Shanayel on-plot and off-plot facilities project is as follows:
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- Water injection system: New water injection system, including surface water injection pumps, necessary connections and controls from produced water systems, headers, chemical dosing, power and controls, etc.
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Off-plot facilities:
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MEED previously reported that Adnoc Onshore had awarded EPC works on the Southeast off-plot facilities project to state-owned China Petroleum Engineering & Construction Corporation (CPECC), with the value of the contract estimated to be around $1.2bn.
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READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDFSaudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.
Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:
> WORLD CUP: What the 2026 World Cup means for Saudi Arabia 2034> MARKET FOCUS: Maghreb fortunes diverge> INDUSTRY REPORT: GCC banks prove resilient amid turmoil> LEADERSHIP: Private capital and the GCC infrastructure inflection> INTERVIEW: Developers look beyond standalone solarTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/18022436/main2622.jpg -
Lebanon seeks interest for power generation projects3 August 2026
Lebanon’s Electricity Regulatory Authority (ERA) has invited the private sector to submit expressions of interest (EoIs) for several upcoming power generation projects.
The EoI covers up to five grid-connected solar photovoltaic projects with a combined installed capacity of 350MWp. The projects are also expected to include battery energy storage systems (bess) with a combined capacity of 1,000MWh.
The regulator is also seeking proposals for distributed dual-fired thermal power plants with net capacities ranging from 20MW to 100MW. The plants are expected to operate on natural gas as the primary fuel and heavy fuel oil as a backup fuel.
The submission deadline is 31 August.
Regulatory progress
The EoI follows the establishment of Lebanon’s Electricity Regulatory Authority earlier this year, more than two decades after it was envisaged under Law No. 462/2002 but not implemented due to political delays. The electricity sector had previously been overseen by the Ministry of Energy & Water and state utility Electricite du Liban.
Lebanon’s electricity sector continues to face insufficient generation capacity, fuel supply constraints, ageing generation assets and limited grid flexibility. These challenges have led to prolonged electricity shortages and increased reliance on private diesel generation and distributed solar systems, prompting the government to seek additional private investment in new generation capacity.
IPP model
According to the EoI document, the projects are expected to be structured as independent power producer (IPP) schemes. Any future contractual arrangements, including power-purchase agreements, will be determined by the competent public authority under the applicable legal framework.
The ERA said the EoI is open to private investors, IPP operators, engineering, procurement and construction contractors, equipment suppliers and consortiums. It is intended to assess market interest, identify potential generation projects and evaluate the technical and financial capabilities of prospective developers.
Respondents are required to provide information on their technical and financial capabilities, proposed project locations, grid connection plans and relevant project experience.
For solar projects, developers are required to provide details including module and inverter technology, annual generation estimates and battery storage specifications where applicable. Thermal project submissions must include information on technology type, efficiency, fuel strategy, emissions performance and readiness for future natural gas operation.
The EoI states that developers will be responsible for land acquisition or leasing, permitting, financing, design, construction, grid interconnection, commissioning, and long-term operation and maintenance of the projects.
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Saudi economy swings to 4.8% contraction3 August 2026
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Saudi Arabia’s economy contracted 4.8% year-on-year in the second quarter of 2026, as a sharp fall in oil activities outweighed continued growth in the non-oil economy, according to flash estimates from the General Authority for Statistics (Gastat).
The contraction was driven by a 24.7% year-on-year drop in oil activities, which cut 5.4 percentage points from the headline figure. Non-oil activities grew 0.6% and government activities rose 0.9%, contributing 0.4 and 0.1 percentage points respectively. Net taxes on products added a further 0.1 percentage points.
On a seasonally adjusted basis, real GDP fell 4.9% from the first quarter, with oil activities down 21.5% quarter-on-quarter. Non-oil activities eased 0.5% over the same period, while government activities rose 0.2%.
The second-quarter figures mark a reversal from the first quarter, when the economy grew 3% year-on-year. In the first quarter, both oil and non-oil activities expanded by 2.9% and government activities rose 1.5%, with growth recorded across all major sectors. Oil activities have since swung from that modest expansion to a steep contraction, while non-oil growth has slowed from 2.9% to 0.6%.
The divergence between the oil and non-oil economy has widened as a result. While crude output fell steeply in the second quarter, the broader non-oil sector, the focus of the kingdom’s economic diversification programme, continued to expand, albeit at a slower pace than in the opening months of the year.
Public finances
The contraction came in a quarter when higher oil revenue improved the public finances. The budget deficit narrowed to SR34.29bn in the second quarter, down from SR125.71bn in the first, as oil revenue rose 22% year-on-year to SR185.13bn, according to the Finance Ministry’s quarterly budget performance report. Total revenue reached SR338.78bn, up 12% on the same period of 2025, while non-oil revenue increased 3% to SR153.66bn.
Total spending rose 11% year-on-year to SR373.07bn. The sharpest increases were in grants, up 199% to SR1.24bn, subsidies, up 73% to SR13.27bn, and financing expenses, up 41% to SR16.81bn. Capital spending rose 16% to SR46.23bn.
For the first half, the deficit totalled SR160bn, financed entirely through borrowing with no drawdown on government reserves. Revenue for the six months rose 6% year-on-year to SR599.76bn, while spending increased 15% to SR759.76bn. Actual first-half spending reached 58% of the full-year budget of SR1.312tn. Health and social development recorded the highest sectoral outlay at SR170.61bn, followed by the military at SR124.57bn and education at SR109.73bn.
Public debt reached SR1.684tn by the end of the first half, up from an opening balance of SR1.519tn. Domestic debt stood at SR1.060tn and external debt at SR624.9bn. The government reserve closing balance was SR399.07bn.
The kingdom has continued to tap the domestic debt market. The National Debt Management Centre closed its July 2026 issuance under the Saudi Arabian Government riyal-denominated sukuk programme at SR5.35bn, divided into five tranches. The largest, at SR3.83bn, matures in 2031, with further tranches of SR515m maturing in 2033, SR204m in 2036, SR300m in 2039 and SR500m in 2041.
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Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:
> WORLD CUP: What the 2026 World Cup means for Saudi Arabia 2034> MARKET FOCUS: Maghreb fortunes diverge> INDUSTRY REPORT: GCC banks prove resilient amid turmoil> LEADERSHIP: Private capital and the GCC infrastructure inflection> INTERVIEW: Developers look beyond standalone solarTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/18015899/main.gif