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  Momentum builds in Iraq’s post-war construction sector

  12 May 2026

  

   

  In October last year, Iraq awarded an estimated $764m contract to develop Baghdad International airport on a public-private partnership (PPP) basis to a consortium comprising Luxembourg-based Corporacion America Airports and local firm Amwaj International.

  The move is the latest sign of international investors’ growing appetite for projects in Iraq as part of the country’s post-war reconstruction drive.

  Iraq has been recovering gradually since the war. Initially, the government prioritised infrastructure and public housing to stimulate economic growth, improve living standards and attract foreign investment.

  More recently, benefiting from higher oil prices and a period of relatively stable governance, Baghdad has expanded its focus to reconstructing and modernising the country’s deteriorating infrastructure.

  Looking ahead, Iraq’s construction industry is expected to register an average annual growth rate of 4.8% between 2025 and 2028, supported by further investment in energy, infrastructure and housing projects, according to UK analytics firm GlobalData.

  Real estate projects

  Iraq plans to develop more than 21 residential cities across the country. According to local media reports published in May, Iraq’s Ministry of Construction & Housing said the projects are being developed in co-operation with private real estate developers.

  The report added that the residential cities are located in Baghdad, Mosul, Karbala, Babylon, Basra, Najaf, Dhi Qar, Maysan and Wasit.

  Another major announcement came in October last year, when UAE-based developer Damac Properties launched the Damac Hills Baghdad masterplanned community, its first real estate project in Iraq.

  Damac Hills Baghdad forms part of a larger development spanning 6.2 million square metres (sq m). The community is located near Abbas Ibn Firnas Square, close to Baghdad International airport.

  The project is in line with the Iraq National Investment Commission’s drive to attract greater foreign investment into the country.

  The latest foreign investment-backed scheme follows Egyptian real estate developer Ora Developers beginning construction last year on the Al-Wardi residential city project. The development will include more than 100,000 residential units covering about 61 million sq m on the southeastern side of Baghdad.

  Last year, another Egyptian firm, Talaat Moustafa Group Holding, said it was in negotiations with the National Investment Commission to develop a mixed-use project. Covering an area of about 14 million sq m and located southwest of Baghdad, the project is expected to include about 45,000 residential units.

  In 2024, Abu Dhabi-based developer Eagle Hills announced that it had secured land for a $1.5bn project in Baghdad that will include a golf course, residential components, a five-star hotel, a spa and a resort club.

  These projects continue the trend of renewed confidence among international investors in Iraq’s construction sector.

  Transport schemes

  In addition to the Baghdad International airport PPP award, Iraq has recently accelerated plans to develop the country’s wider infrastructure network.

  Earlier this year, Iraq announced that it would redesign the long-delayed Baghdad Metro project in a bid to reduce capital expenditure on the project.

  According to media reports, earlier proposals relied heavily on underground construction, making the project economically unviable.

  Last year, Iraq’s Ministry of Transport announced plans to build the Basra-Shalamcheh railway project, a 36-kilometre cross-border rail link connecting Iraq and Iran.

  In the ports sector, Iraq’s Aloreen Company for Investments secured up to $120m in financing in March from the International Finance Corporation, part of the World Bank Group, to expand the container-dedicated Terminal 2 at Umm Qasr Port in southern Iraq.

  Located about 70km south of Basra, Umm Qasr Port is Iraq’s main maritime gateway and its only deep-water port, handling most of the country’s containerised and general cargo.

  In October, Iraq said it would select three firms from an 11-company shortlist to manage and operate Al-Faw Grand Port, located in the southern city of Basra.

  The first phase of the project is scheduled for completion by the end of this year, while the second phase is expected to be completed by 2029.

  Projects pipeline

  Iraq has about $96bn-worth of projects in the planning and pre-execution stages across its construction and transport sectors.

  The construction sector accounts for about $69bn of this pipeline, while the transport sector has projects valued at around $17bn.

  The short-term outlook for both sectors remains positive, with the government committed to economic revitalisation through infrastructure projects.

  These initiatives are expected to attract investors, create local employment opportunities and generate significant revenues. At the same time, securing funding for major metro and airport developments will be important in maintaining investor confidence.

  Further investment, together with continued political stability and clearer regulatory frameworks, will be vital if the government is to achieve its goals, sustain the country’s recovery and support long-term economic expansion.

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  MEED’s June 2026 report on Iraq also includes:

  > OVERVIEW: Iraq enters era of resilience, reform and rising risks
  > OIL & GAS: Iraqi oil and gas sector in crisis
  > POWER & WATER: Focus shifts to delivery of Iraq utilities expansion

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  Yasir Iqbal
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  Orasqualia signs Egypt biogas plant deal

  12 May 2026

  A joint venture of Egypt’s Orascom Construction and Spain-headquartered Aqualia has signed an agreement with Egypt’s New Urban Communities Authority to implement a biogas power generation unit at the New Cairo wastewater treatment plant (WWTP).

  The Orasqualia joint venture will develop a facility to convert wastewater-derived biogas into renewable energy. The project is expected to cover 60%-70% of the plant’s electricity demand, equivalent to about 13,140 megawatt-hours a year.

  The biogas unit will be integrated into the existing New Cairo WWTP, which has been operational since 2013 as Egypt’s first public-private partnership wastewater project.

  The scope of works includes the construction of a biogas plant, sludge digestion systems for methane production, biogas-fired generators, organic fertiliser processing units, and associated electrical and control systems.

  The project, estimated to cost $40m, is also expected to improve operational efficiency and reduce operating costs at the facility.

  According to MEED Projects data, Aqualia has served as the main contractor on at least eight major desalination and treatment projects across Egypt, Tunisia and Algeria.

  A joint venture of Orascom and Aqualia previously signed a $320m engineering, procurement and construction contract for the Abu Rawash WWTP expansion project in Giza, which was completed in 2022.

  > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

  

  https://image.digitalinsightresearch.in/uploads/NewsArticle/16797315/main.jpg

  Mark Dowdall
• 
  Focus shifts to delivery of Iraq utilities expansion

  12 May 2026

  

   

  Iraq’s power and water sector recorded its largest year of investment on record in 2025, with more than $17bn in combined contract awards.

  Several long-planned water infrastructure schemes finally reached contract award stage amid mounting supply pressures in the south of the country and a growing reliance on new desalination projects.

  Iraq awarded $10bn-worth of water infrastructure contracts between January 2025 and May 2026, according to regional projects tracker MEED Projects.

  This compares with just $1.8bn in total awards across 2022, 2023 and 2024, when only one seawater desalination plant reached the contract award stage.

  Desalination projects

  Attention is now turning to the delivery phase of new plants led by a series of major desalination and water treatment projects in Basra governorate.

  In February, Iraqi officials said the flagship $2.42bn Basra seawater desalination plant could be financed through the Iraqi-Chinese Fund, weeks after the main engineering, procurement and construction (EPC) contract was awarded to PowerChina.

  Located on the Arabian Gulf coast in Al-Faw, the plant is designed to produce 1 million cubic metres a day (cm/d) of potable water. The project also includes a water transmission network supplying 11 cities and a dedicated 300MW power plant.

  Baghdad had earlier announced plans for four additional desalination plants across the province in July 2025. These include the Shatt Al-Arab plant, planned to produce 120,000 cm/d of desalinated water, and the Al-Faw and Al-Siba plants, each with a capacity of 72,000 cm/d.

  The joint venture of Baghdad-headquartered Al-Rida Investment Group and PowerChina has been appointed as the main contractor for each project, with construction expected to begin in the third quarter of 2026.

  Additional schemes include the $72m Safwan desalination plant and the $70m Abu Flous desalination project. Abu Flous is being undertaken by the Ministry of Water Resources and is designed to have a capacity of 72,000 cm/d.

  The push to advance new projects follows warnings issued last year by Iraq’s High Commission for Human Rights about a worsening humanitarian situation linked to declining river flows and rising salinity levels in the Shatt Al-Arab waterway.

  Alongside municipal water projects, Iraq is also advancing large industrial water infrastructure schemes tied to the energy sector. Last August, Iraq approved the award of the Common Seawater Supply Project package for the Artawi oil field to South Korea’s Hyundai Engineering & Construction.

  The estimated $3.16bn contract covers the engineering, procurement, supply, construction, commissioning and operation of a major seawater treatment facility. Construction is expected to begin in 2026, further reflecting the scale of projects now in the execution stage.

  Power expansion

  In parallel, Iraq’s power sector is undergoing one of its largest expansion programmes in decades as the government attempts to address chronic electricity shortages, diversify fuel sources and strengthen regional grid connectivity. Over $40bn-worth of projects are under execution, following $4.2bn in new contracts last year.

  In August 2025, the Iraqi cabinet approved five major power generation schemes with a combined capacity exceeding 10GW. The projects represent one of the country’s largest-ever single rounds of power project approvals.

  The centrepiece of the programme is three independent power producer (IPP) combined-cycle plants at Al-Faw, Abu Ghraib and Kirkuk, with a total capacity of 7,500MW.

  The largest schemes are the 3,000MW Al-Faw plant in southern Iraq, with US-based General Electric as the EPC contractor, and the 3,000MW Abu Ghraib facility near Baghdad. Both projects will be implemented under 25-year build-own-operate models.

  A 1,500MW combined-cycle plant in Kirkuk will also be developed under long-term power purchase agreements backed by sovereign guarantees from the Finance Ministry. US-based GE Vernova is the technology provider for all three projects.

  Furthermore, the government has approved two thermal power plants in Najaf and Youssifiyah, with planned capacities of 1,500MW and 1,800MW, respectively.

  This is part of a wider 20-year electricity strategy unveiled last year in partnership with Siemens Energy and GE Vernova. The programme aims to add 57GW of new generation capacity through a mix of gas-fired, thermal and renewable energy projects.

  Electricity shortfall

  The scale of the challenge means timely project execution will be critical. Iraq currently produces about 28GW of electricity, according to the Electricity Ministry, but demand during peak summer periods is estimated at more than 50GW. The shortfall continues to result in widespread outages and pressure on the national grid.

  The fragility of the system was exposed again in March, when Iraq suffered nationwide electricity blackouts after a sudden drop in gas supplies to the Rumaila power plant in Basra. The disruption led to the loss of about 1,900MW of generation capacity and triggered a nationwide grid collapse.

  The incident highlighted Iraq’s continued dependence on associated gas production from the oil sector. With regional geopolitical tensions affecting oil exports and production, gas availability for power generation has become increasingly vulnerable.

  Solar plants

  As part of a strategy to diversify energy sources, the country inaugurated the first phase of the 300MW Karbala solar IPP plant in September 2025, marking Iraq’s first utility-scale solar scheme connected to the national grid.

  Developed by a consortium of Norway’s Scatec, Egypt’s Orascom Construction and Iraq’s Al-Bilal Group, the project forms part of the government’s target to add 10GW of solar energy by 2030.

  These plans also include the 1GW solar IPP in Najaf, now under construction and scheduled for commissioning in 2028.

  Looking further ahead, the Iraqi government announced in February that it has allocated more than 140 sites for new solar power plants, following a six-month identification process. The locations are distributed across several regions, including the outskirts of Baghdad and areas such as Nahrawan, Al-Nasr, Al-Salam, Al-Hamamiyat, Taji and Al-Husseiniya.

  Meanwhile, regional interconnection projects are also becoming increasingly important. Iraq is progressing with plans to integrate into the GCC electricity grid through a new 400kV transmission link between Kuwait’s Al-Wafra station and Iraq’s Al-Faw station.

  The first phase of the project will allow 500MW of electricity imports into Iraq, rising to 1,800MW over time. Iraq is targeting full integration of the GCC-Iraq grid by the end of 2026.

  ---

  MEED’s June 2026 report on Iraq also includes:

  > OVERVIEW: Iraq enters era of resilience, reform and rising risks
  > OIL & GAS: Iraqi oil and gas sector in crisis

  https://image.digitalinsightresearch.in/uploads/NewsArticle/16797622/main.gif

  Mark Dowdall
• 
  Abu Dhabi announces $15bn infrastructure PPP projects

  12 May 2026

  The Abu Dhabi Investment Office and the Abu Dhabi Projects and Infrastructure Centre have launched a AED55bn ($15bn) public-private partnership (PPP) pipeline of 24 projects to be tendered in 2026 and 2027.

  The projects will be tendered across the transport, infrastructure and social sectors.

  According to a statement published by the Abu Dhabi Media Office, the transport sector accounts for 11 road projects, with AED35bn ($9.5bn) of construction capex, covering more than 300 kilometres of new and upgraded roads, tunnels, intersections and related network works.

  The infrastructure pipeline includes five projects budgeted at AED11bn ($3bn), covering dams, water storage, flood control, stormwater upgrades and urban landscaping.

  Social infrastructure includes eight projects budgeted at AED9bn ($2.5bn), covering sports facilities, specialist healthcare assets, schools and university campuses.

  The statement added that the pipeline forms part of Abu Dhabi’s infrastructure delivery plan and will be executed through PPP structures.

  It is also intended to support company establishment in the emirate, local content objectives, and supply-chain and industrial capacity.

  .@InvestAbuDhabi and @ADPIC_ae have launched a AED55 billion public-private partnership pipeline, marking the next phase of Abu Dhabi’s long-term infrastructure delivery strategy, ahead of preparations to host Abu Dhabi Infrastructure Summit 2026. pic.twitter.com/a8U1LWURSz

  — مكتب أبوظبي الإعلامي (@ADMediaOffice) May 11, 2026

  

  https://image.digitalinsightresearch.in/uploads/NewsArticle/16793904/main.jpg

  Yasir Iqbal
• 
  Saudi Arabia tenders GCC rail link from Kuwait to UAE border

  12 May 2026

  

   

  Saudi Arabia has begun the procurement process to deliver its portion of the GCC railway, which will connect all six member states.

  Saudi Arabia Railways (SAR) issued a tender for design consultancy services for the project on 7 May, with a bid submission deadline of 30 June.

  It includes the concept design, preliminary design and Issued for Construction (IFC) design stages of the network.

  SAR requires the selected consultant to review, update and complete the existing preliminary design of the network.

  The kingdom’s section of the railway will start at Al-Khafji in the Eastern Province, near the border with Kuwait, and end at Al-Batha, at Saudi Arabia’s border with the UAE. The route length in Saudi Arabia will be about 672 kilometres (km).

  The railway will interface with the Kuwait National Rail Road (KNRR) project on the Kuwaiti side. Last year, MEED exclusively reported that the KNRR design contract was awarded to Türkiye’s Proyapi Muhendislik ve Musavirlik Anonim Sirketi.

  The KNRR forms part of the wider GCC rail network. GCC railway projects have been progressing with renewed impetus since the six member states signed the Al-Ula Declaration in January 2021.

  In October last year, the Qatari cabinet approved a draft agreement paving the way for a railway link between Qatar and Saudi Arabia as part of the GCC railway network.

  GCC railway line

  Under the overall plan, the railway will span 2,186 kilometres, beginning in Kuwait, passing through Dammam in Saudi Arabia, reaching Bahrain via a planned causeway, and continuing from Dammam to Qatar, the UAE and, ultimately, Muscat via Sohar in Oman.

  The network’s route length within each member state is as follows: 684km in the UAE, 672km in Saudi Arabia, 306km in Oman, 283km in Qatar, 145km in Kuwait and 36km in Bahrain.

  The railway is designed for passenger trains travelling at 220 kilometres an hour (km/h) and freight trains operating at 80-120km/h.

  With high levels of project activity, governments in spending mode and renewed cooperation under the Al-Ula Declaration, the latest efforts to restart the GCC railway project may make more progress than previous attempts. If completed, the railway could prove transformational for a region that is globally connected but divided between its constituent parts.

  > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

  

  https://image.digitalinsightresearch.in/uploads/NewsArticle/16793841/main.jpg

  Yasir Iqbal