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A new dawn for PPPs

29 September 2025

 

This package also includes: 
> AGENDA: GCC pushes PPPs to deliver $70bn pipeline
> NCP: Saudi Arabia’s NCP powers $190bn PPP push

There has been a major shift in the region’s projects market over the past year as governments widen their plans for public-private partnership (PPP) projects. 

In his opening address at the fifth PPP Mena Forum in Dubai in September, Nasser Massoud, founder and managing director of concept realisation and chair of the social sector PPPs chapter at the World Association of PPP Units & Professionals, outlined how PPPs will help countries across the Middle East and North Africa (Mena) region to realise their economic and social visions, such as Saudi Arabia’s Vision 2030, Oman’s Vision 2040 and the UAE Centennial 2071. 

“At the heart of these visions lies infrastructure and service improvement, healthcare systems that improve lives, schools and housing that target communities, airports and transport networks that connect, and projects that ensure sustainability for generations to come. Governments cannot do this alone. Partnerships are no longer simply financing mechanisms. They are strategic enablers of national transformation,” he said.

Risk and rewards

For the private sector to come in, PPP projects need to be bankable. “PPPs need to be resilient and robust. They aim to extend for 15-30 years. Value for money is achieved when the risks are allocated to the party best able to manage them,” Massoud said. He added that governments should avoid overloading private partners with risks beyond their control. 

James Cook, CEO of Tribe Infrastructure Group, who was also speaking at the PPP Mena Forum, noted: “If governments retain too many risks, the private sector is unlikely to participate. If they pass over risks that the private sector cannot manage, bidders will either walk away or price them inefficiently.”

PPPs are not new to the region. In the power and water sector, they have been used for two decades on assets designed for power generation, desalination and sewage treatment. 

In these sectors, the model is tried and tested, with governments signing offtake agreements with the private sector developer company, and while the details vary from project to project, the basic framework and allocation of risk is something the market understands and is willing to take on. 

Outside the power and water sectors, the track record of PPPs is patchy. In the past 20 years, PPPs have been used successfully for the development of airports at Medina in Saudi Arabia and Amman in Jordan, and for universities in the UAE.

There have also been examples of PPP projects that have failed to proceed. The highest-profile was the highway connecting Mafraq and Ghuweifat in Abu Dhabi, but there are others, such as the Union Oasis real estate development in Dubai, and more recently the Bahrain metro scheme. 

In 2025, there is a sense that there is a new dawn as the market prepares itself for a golden age of PPP projects. 

Traditionally, governments have looked to PPPs at times when oil prices have not been high enough to support all of their infrastructure spending plans. While that is the case today, the impetus behind privatisation and PPPs has been building for several years and reflects a growing acceptance that getting the private sector to deliver projects offers benefits beyond reduced capital expenditure requirements.

PPPs will help countries across the Mena region to realise their economic and social visions 

Saudi push

In an interview with the Economist in January 2016, Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud, who at the time was Deputy Crown Prince, discussed the potential of an initial public offering for Saudi Aramco for the first time, and also mentioned that the healthcare, education and military industries sectors, as well as some state-owned companies, could benefit from private sector participation. 

“It will decrease some of the pressure that the government has, and some of them may create good profit,” he said. 

The Vision 2030 document that was released later that year emphasised the role of PPPs in sectors including renewable energy, improving business environments and infrastructure development. The plans outlined the need to encourage private investment and the competitiveness of services, streamline government operations that facilitate private sector contribution and leverage private investments for development projects. These measures aim at improving the overall business environment in Saudi Arabia and easing the private sector’s participation in national economic development.

Nearly 10 years after Vision 2030 was launched, the National Centre for Privatisation & PPP (NCP), which is the government agency responsible for coordinating, structuring and implementing privatisation and PPP initiatives in the kingdom, has 200 planned PPP projects in 16 sectors.

The NCP has already helped to deliver several PPP projects. Saudi contracting firms BEC Arabia and Mobco Group recently announced that they have completed the construction works on the first phase of the Wave 2 PPP schools project in Medina. The $320m scheme involves the financing, design, construction and facilities management of 60 schools for a period of 23 years.

The construction period was three years under a build, maintain and transfer model. A consortium comprising local firms Vision Invest and Al-Omran Group, and Canadian engineering firm AtkinsRealis is developing the project, while Saudi Arabia’s Education Ministry and Tatweer Buildings Company (TBC) are the joint procurers of the scheme.

The first phase, which is referred to as Wave 1, included the development of 60 schools in Jeddah and Mecca and achieved financial close in 2021.

Speaking at the PPP Mena Forum, Tatweer Mosaab R Alburshid, chief PPP officer at TBC, said that attentions in Saudi Arabia are now turning to brownfield projects. “We’re thinking beyond construction – integrating education services and ensuring access to communities,” he said. 

“That evolution is partly pragmatic. With more than 18,000 schools nationwide requiring rehabilitation, the kingdom needs models for refurbishment, as well as new builds.”

Alburshid also said: “Attendance rates in our PPP schools jumped from around 70% to 95%”, noting that for him, this is the proof that “social infrastructure PPPs must be judged not only by on-time delivery or lifecycle cost, but by whether they change lives at scale”.

UAE momentum

PPPs are also gaining momentum in the region’s second-largest projects market, the UAE. In 2022, a new federal PPP law was agreed, and emirate-level PPP laws exist in both Abu Dhabi and Dubai.

Abu Dhabi in particular has thrown its weight behind PPPs in recent years, and to support those efforts has formed several entities. In 2019, it formed the Abu Dhabi Investment Office (Adio) to work with government entities to attract private sector investment into projects in the emirate.

In 2023, it formed the Abu Dhabi Projects & Infrastructure Centre (Adpic) to oversee and manage capital projects in the emirate in the fields of housing, infrastructure, tourism, community facilities and education.

In May 2025, Adpic signed a memorandum of understanding  with Gridora to deliver transport infrastructure projects in the UAE capital. Abu Dhabi-based investment entities ADQ, International Holding Company and Modon Holding formed Gridora in April to support private and PPP entities in delivering infrastructure developments.

These efforts have resulted in successes. For example, in 2022, Adio awarded the contract for the Zayed City Schools project, the UAE’s first PPP in school infrastructure, to a consortium led by construction group Besix and Australia’s Plenary. The contract covers the design, build, finance, maintenance and transfer of three campuses with a capacity of 5,360 students.

In Dubai, PPPs are also being relied upon to deliver major infrastructure projects. Dubai Municipality has tendered the first two packages of the $22bn Dubai Strategic Sewerage Tunnels project, which will convert the existing sewerage system from a pumped system to a network of deep gravity sewers. The project is split into six PPP packages with concession periods of 25-35 years.

In Dubai, PPPs are also being relied upon to deliver major infrastructure projects

Pipeline pressures

As the Mena PPP pipeline grows, capacity will become an issue. The region’s PPP resources are finite, and while they are expected to grow, they are unlikely to grow quickly enough to satisfy all of the projects that are planned. However, consultants are already working with government bodies on a phasing plan that reflects national priorities, to prevent projects going out to tender and not attracting enough serious bidders. 

The related concern for developers is that some of the planned projects will not proceed. Bidding for PPP projects is a costly and time-consuming exercise, so developers need to be confident that projects will move forward. 

“As a developer, the two big challenges are pipeline credibility and project preparation,” said Lennert Rasking, head of infrastructure at Besix Middle East, at the PPP Mena Forum.  “We need visibility on what will actually proceed.” 

As the region stands at the cusp of a golden age for PPP projects, early momentum must come with bankable projects, proper risk allocation, credible pipelines and scaled-up capacity. If the region gets those fundamentals right,
PPPs will move from a novel solution to a default option for delivering infrastructure. 

Main image: Medina airport was the first airport PPP for the GCC aviation sector

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Colin Foreman

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

    > AGENDA 1: A new dawn for PPPs
    To see previous issues of MEED Business Review, please click here
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