meed-logo

line1 line2 line3
SIGN IN / REGISTER

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.” 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10842129/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • US DFC approves $1.8bn financing for Jordan National Water Carrier

    24 September 2026

    The US International Development Finance Corporation (DFC) has approved a loan of up to $1bn and political-risk insurance of up to $800m for Jordan’s National Water Carrier Project.

    The $1bn loan will be provided to National Carrier Project Company (NCPC) to finance the design, development, construction, operation and maintenance of the project’s seawater desalination plant, water conveyance system and dedicated solar generation plant.

    The $800m of political-risk insurance will be provided to Paris-based investment and utility firms Meridiam and Suez, which are developing the project.

    The National Water Carrier, also known as the Aqaba-Amman Water Desalination and Conveyance Project, is being developed under a public-private partnership between Jordan’s Ministry of Water & Irrigation and NCPC, a special-purpose vehicle owned by Meridiam (90%) and Suez (10%).

    The project involves the design, development, construction, operation and maintenance of a seawater desalination plant, a water transmission system and dedicated renewable power generation facilities under a build-operate-transfer model.

    Jordan signed the project’s final technical and legal agreement with Meridiam in April, following months of negotiations. 

    The project’s capital cost was put at about $4.3bn, with total costs including financing estimated at $5.8bn.

    Financial close has not yet been completed. The project’s technical director said in July that the final agreements required for financial close were still being prepared, with construction expected to start in the fourth quarter of 2026. Water pumping is scheduled to begin in the fourth quarter of 2030.

    Jordan’s cabinet approved a $97m financing agreement with the French Development Agency in July as the government continued to complete the project’s financing arrangements.

    The cabinet also approved a package of facilities and exemptions for the National Water Carrier Project on 17 September to help finalise start-up procedures for the project in the Aqaba Special Economic Zone.

    Jordan’s water needs

    The Aqaba-Amman water desalination and conveyance project will desalinate 300 million cubic metres of seawater annually. It will also include a 450-kilometre pipeline and pumping systems reaching elevations of up to 1,100 metres.

    The project is intended to help address Jordan’s severe water scarcity. As one of the world’s most water-stressed countries, Jordan consumes nearly 1 billion cubic metres of water a year.

    The domestic sector consumes approximately 50% of this, with only 61 cubic metres of water available per person a year, far below the global absolute water scarcity level of 500 cubic metres of water per capita.

    According to the government, the scheme will increase overall water supply by 40%, with per capita availability expected to rise to 110 cubic metres annually.

    Annual output from the Water Carrier Project will be nearly equivalent to the total storage capacity of all dams in the kingdom and almost three times the output of the Disi Water Project.

    The project is expected to supply about 40% of Jordan’s drinking water needs, with operations scheduled to begin in 2030. It will also include a 280MW solar photovoltaic plant in Al-Quweira covering roughly 30% of the project’s energy needs.

    Financing

    The government previously said the project had secured about $663m in grants from international partners, including the US, the European Union, Germany, the Netherlands, the UK, France, Italy, Japan and the Green Climate Fund.

    The Jordanian government is contributing $722m.

    Meridiam is arranging about $2.9bn in private sector financing from international financial institutions. The financing package includes support from institutions including the World Bank Group, European Investment Bank, European Bank for Reconstruction & Development, Islamic Development Bank, Proparco, Japan International Cooperation Agency and the Opec Fund for International Development.

    A consortium of Jordanian banks led by Housing Bank is providing up to $1.1bn in local financing, with the Social Security Investment Fund also taking an equity stake alongside Meridiam.

    Local manufacturing

    The project is also beginning to generate associated industrial investment.

    On 30 August, Jordan’s cabinet approved the establishment of a steel pipe manufacturing and coating plant in Aqaba with investment of up to JD120m ($169m). The plant is expected to allocate 50% of its production to the National Water Carrier and create about 420 jobs. Its output will also be available for future water, gas transmission and pumping projects.

    The Aqaba Special Economic Zone Authority and the Ministry of Water & Irrigation also launched a dedicated single-window platform in August to streamline licensing and permitting for the National Water Carrier project.

    Once operational, the project is expected to remain under the PPP structure for 26 years before ownership transfers to the Jordanian government.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19943001/main.jpg
    Mark Dowdall
  • Hitachi wins Al-Mashaer Al-Muqadasah metro revamp

    24 September 2026

    Saudi Arabia Railways (SAR) has signed a contract with Japan’s Hitachi Rail to revamp the Al-Mashaer Al-Muqadasah metro project in Mecca.

    The 18-kilometre line includes nine stations and has a design capacity of about 72,000 passengers an hour in each direction.

    The scope includes upgrades to improve reliability, operational performance and long-term maintainability.

    SAR chief executive Bashar Al-Malik and Hitachi Rail’s Middle East and Africa signalling and rail solutions vice-president, Carlo Piacenza, signed the contract.

    The rail line operates during the Hajj period and transports pilgrims between Mina, Muzdalifah and Arafat.

    It was developed to reduce reliance on buses, ease congestion on pilgrimage routes, and improve safety and crowd management during Hajj.

    The Saudi authorities procured the project on a fast-track basis to meet a fixed operational deadline for Hajj. It entered initial operation in 2010, with China Railway Construction Corporation acting as the main contractor for civil works and overall delivery.

    Hitachi Rail supplied key rail systems, including signalling and telecommunications. SAR subsequently assumed responsibility for the asset and has led later improvement and upgrade programmes.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19941437/main.jpg
    Yasir Iqbal
  • Contractor wins 6GW data centre campus infrastructure

    24 September 2026

     

    Dammam-based construction firm Alyamama Company has won a contract to develop infrastructure for a planned 6GW hyperscale artificial intelligence (AI) data centre campus in Riyadh.

    The project will be delivered on an early contractor involvement (ECI) basis. Under the ECI process, selected contractors are required to submit methodologies and design proposals, after which one team will be selected to deliver the construction works.

    Saudi Arabia’s AI company Humain, owned by the Public Investment Fund (PIF), tendered the contract in May, as MEED reported.

    The scope of infrastructure work covers:

    • Construction of 380kV/132kV/33kV electrical distribution network, two substations with a capacity of 500MVA and 200MVA, bulk supply point (2,000MVA)
    • Water network and fire protection systems
    • Sewage treatment plant and wastewater network
    • Stormwater systems
    • Roads
    • Underground cable and fibre optic networks
    • Landscaping works

    The client is being supported by Canadian engineering firm Hatch, France’s Egis and US-based firm JLL.

    The development will be built on a 24-square-kilometre site in the Al-Saad area in east Riyadh. It will be delivered in two phases across six plots, each with a capacity of 1GW.

    Humain was launched in May last year to operate and invest across the AI value chain.

    Humain is building full-stack AI capabilities across four core areas: next-generation data centres, hyper-performance infrastructure and cloud platforms, and advanced AI models, including Allam.

    Also in May 2025, Humain signed preliminary deals with US chipmakers AMD and Nvidia to build multibillion-dollar advanced digital infrastructure in the kingdom.

    AMD said it will invest up to $10bn to deploy 500MW of AI compute capacity in Saudi Arabia over the next five years.

    In October 2025, PIF and Saudi Aramco signed a non-binding term sheet setting out key terms under which Aramco would acquire a minority stake in Humain, with PIF retaining majority ownership.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19940798/main.jpg
    Yasir Iqbal
  • Algeria officially launches major phosphate project

    24 September 2026

    Algeria’s Minister of State and Minister of Hydrocarbons, Mohamed Arkab, has officially launched the construction of the country’s Integrated Phosphate Project (IPP) during a visit to the province of Annaba.

    This major phosphate project spans the provinces of Annaba, Souk Ahras, Tebessa and Bir El-Ater.

    The scope of the IPP includes:

    • A raw phosphate extraction and beneficiation complex at the Bled El-Hadba site (Bir El-Ater): designed for 5.5 million tonnes a year (t/y) of ore extraction and 3.2 million t/y of phosphate concentrate production
    • An industrial complex at the Oued Keberit site: to include several production units, with the capacity to produce 2.4 million t/y of phosphate fertilisers as well as 570,000 t/y of nitrogen fertilisers
    • Port facilities at the port of Annaba: for exporting surplus fertiliser production
    • Utilities and auxiliary infrastructure

    In a statement, the Ministry of Hydrocarbons said that Arkab’s official visit was taking place “within the framework of periodic field monitoring of the project’s implementation stages”.

    It said: “The project stands as one of the most significant strategic and structural initiatives for the national economy; it aims to develop and exploit national mineral resources and to process and add value to phosphate locally, thereby boosting value-added output and increasing non-hydrocarbon exports.”

    It added: “The integrated phosphate project is part of a comprehensive vision to valorise national mineral resources and develop associated downstream industries.

    “This initiative aims to boost national production of fertilisers and high-value-added chemical products, support food security, create jobs, and contribute to diversifying the national economy and increasing non-hydrocarbon exports.”

    On 12 August, Algeria’s national oil and gas company Sonatrach and the Algerian Chinese Fertilisers Company (ACFC) signed two engineering, procurement and construction (EPC) contracts for the project.

    The contracts were part of the Bled El-Hadba phosphate development project, which is expected to be worth $7bn.

    The contracts were signed by Italy’s Saipem and China Harbour Engineering Company (CHEC) as part of the first phase of the integrated phosphate project.

    Saipem’s contract was worth about €500m ($577m), according to a statement from the Italian company.

    It focuses on constructing fertiliser processing and production facilities.

    The contract with CHEC focuses on constructing port facilities at the Port of Annaba.

    ACFC was created in March 2022 by Algerian companies Asmidal and Manadjim El-Djazair (Manal), which own 56% of the company, and Chinese groups Wuhuan and Tianan, which own the remaining 44% stake.

    Manal and Asmidal are both subsidiaries of Sonatrach.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19927744/main.jpg
    Wil Crisp
  • Design review nearly complete for Libya upstream project

    24 September 2026

     

    US-headquartered KBR is nearing completion of its re-evaluation of the design for the project to develop the J6 North Gialo field in Libya, according to industry sources.

    In June, MEED reported that Libya’s Waha Oil Company (WOC), a subsidiary of state-owned National Oil Corporation (NOC), had launched a review into the tender process for the J6 North Gialo oil field development project, and that this would include re-evaluating the front-end engineering and design (feed).

    The Waha concessions are held by a consortium of Libya’s NOC (59.16%), TotalEnergies (20.42%) and US-based ConocoPhillips (20.42%).

    They are operated by WOC, which is 100% owned by NOC.

    WOC is planning to tender the main contract for the project to develop the J6 field before the end of this year, although it may be tendered in the first quarter of 2027 if there are delays.

    KBR in Libya

    KBR has previously provided engineering services for major national projects in Libya, such as the Great Man-Made River project, which is widely recognised as the largest irrigation project in the world.

    In March, KBR was awarded a contract by Zallaf Exploration, Production & Refining of Oil & Gas Company to provide project management and technical services for the South Refinery project in Libya’s southern city of Ubari.

    Under the terms of the contract, KBR will provide contract management, project management and supporting technical services throughout the engineering, procurement and construction (EPC) phases of the project.

    The EPC work is expected to be executed over a 50-month period.

    In its statement, KBR said the project aligns with its “long-standing commitment to advancing vital oil and gas infrastructure in Libya”.

    Upstream development

    In March, MEED reported that South Korea’s Daewoo had pulled out of the tender process for Libya’s J6 North Gialo oil field development project.

    Daewoo had formed a partnership with Egypt’s Petrojet to participate in the tender process.

    The only other company to submit a bid for the project was UK-based Petrofac, which filed for administration in October last year.

    In January, TotalEnergies signed an agreement extending the Waha concessions agreement up to 31 December 2050.

    This agreement set new fiscal terms, allowing an increase in the production of these concessions that were, at the time, producing about 370,000 barrels of oil equivalent a day (boe/d).

    In January, TotalEnergies said that the deal paved the way for “a new phase of investments, including the development of the North Gialo field, which is expected to add 100,000 boe/d of production”.

    The J6 North Gialo project is the first of three field development projects that WOC has prioritised.

    The other two are known as NC98 and Gialo 3.

    Together, the three projects are expected to double Waha’s production from about 300,000 barrels a day (b/d) of oil to 600,000 b/d.

    The Waha concession covers 13 million acres.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19927052/main.jpg
    Wil Crisp