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  Read the April 2025 MEED Business Review

  3 April 2025

  Download / Subscribe / 14-day trial access

  Governments in the Middle East and North Africa (Mena) region are digging deep to find solutions to the challenges posed by booming populations and rapidly growing cities. It is hoped that by expanding their underground infrastructure, major urban
  centres such as Dubai, Riyadh and Doha can alleviate the mounting pressure that is being put on their existing transport and utility networks.

  Subterranean transport projects, such as the high-profile Dubai Loop scheme being planned by the Roads & Transport Authority in partnership with Elon Musk's The Boring Company, or the recently completed metro systems in Riyadh and Doha, promise to tackle urban congestion and slash commute times. Meanwhile, through large-scale underground utilities schemes like the Dubai Strategic Sewerage Tunnels project, the traditional wastewater network can be upgraded without disturbing the existing cityscape.

  As a result, while governments globally are curtailing public infrastructure spending to reduce public debt, GlobalData has revealed that the Mena region has a tunnel construction pipeline worth $128.6bn.

  In the April edition of MEED Business Review, we take an in-depth look at the various subterranean transport and utility projects that are in the pipeline in the Mena region, and examine the outlook for major tunnelling projects globally. 

  MEED's latest issue also includes a comprehensive report on the region's tourism and hospitality sector, as Saudi Arabia strives to join Qatar and the UAE as one of the GCC’s leading leisure tourism destinations. Indeed, the kingdom dominates when it comes to hospitality-linked project activity, with contracts worth a total of $4.4bn awarded last year.

  Saudi Arabia is also the focus of this month’s exclusive 21-page market report, which finds the kingdom looking forward to a positive year in 2025. As Riyadh takes the diplomatic initiative, particularly as an intermediary in the Ukraine conflict, the kingdom's non-oil economy is also going from strength to strength.

  Although lower oil prices are expected to slightly dent revenues this year, Saudi Aramco is planning sustained capital expenditure and remains intent on projects to expand the production of high-value petrochemicals. Meanwhile, 2025 is expected to be a year of stable profitability for Saudi Arabia’s banks, and is set to be the busiest year ever for the power sector. Construction awards also remain up as Riyadh shifts its focus to delivering the infrastructure and transport projects that are needed for the kingdom’s hosting of upcoming international events.

  This issue is also packed with analysis. We find out how BP’s planned $25bn investment in Iraqi oil fields will benefit Chinese contractors, round up the top five GCC data centre projects, look at why the rapid deployment of low-cost solar power is causing a surge in battery energy storage demand, and discover that Riyadh's need to diversify its sources of project financing has led to a sharp rise in the value of public-private partnerships in Saudi Arabia.

  In the April issue, the team also speaks exclusively to CEO of Edmond de Rothschild Asset Management UK and global head of infrastructure and structured finance, Jean-Francis Dusch, about Saudi infrastructure investment opportunities; and talks to Mark Thomas, group CEO of Bapco Energies, about how the state energy conglomerate plans to secure Bahrain’s hydrocarbons potential.

  We hope our valued subscribers enjoy the April 2025 issue of MEED Business Review. 

  

   

  Must-read sections in the April 2025 issue of MEED Business Review include:

  > AGENDA: 
  > Traffic drives construction underground
  > Muted public spending hinders global tunnelling

  > CURRENT AFFAIRS:
  > Chinese contractors to benefit from BP’s investment in Iraq

  INDUSTRY REPORT: Tourism and hospitality > Beaches and luxury drive regional tourism > Region’s hotel projects pipeline balloons

  > INTERVIEWS:
  > Investing in Saudi Arabia’s infrastructure opportunities
  > 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 MARKET REPORT: 
  > COMMENT: Riyadh enjoys buoyant fortunes
  > GOVERNMENT: Riyadh takes the diplomatic initiative
  > ECONOMY: Saudi Arabia’s non-oil economy forges onward
  > BANKING: Saudi banks work to keep pace with credit expansion
  > UPSTREAM: Saudi oil and gas spending to surpass 2024 level
  > DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
  > POWER: Saudi power sector enters busiest year
  > WATER: Saudi water contracts set another annual record
  > CONSTRUCTION: Reprioritisation underpins Saudi construction
  > TRANSPORT: Riyadh pushes ahead with infrastructure development
  > DATABANK: Saudi Arabia’s growth trend heads up

  > MEED COMMENTS: 
  > Saudi Arabia is high-rise capital of the world
  > Dubai needs to deliver more metro lines
  > US and UAE power play gains momentum
  > Libya’s new oil licensing round could be make or break

  > GULF PROJECTS INDEX: Gulf index sees minor correction

  > FEBRUARY 2025 CONTRACTS: Project awards slump notably in February

  > ECONOMIC DATA: Data drives regional projects

  > OPINION: Is this the end for Middle East studies?

  > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

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

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  MEED Editorial
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  Abu Dhabi balances AI and net-zero with $9.8bn infra spend

  3 April 2025

  Abu Dhabi National Energy Company (Taqa) and Emirates Water & Electricity Company (Ewec) have officially confirmed the scale of the power generation and grid infrastructure being planned to support the UAE capital's artificial intelligence (AI) strategy.

  The picture emerging from today's announcement indicates a total investment of AED36bn, or roughly $9.8bn.

  This is split between the round-the-clock solar photovoltaic plus battery energy storage system project, announced by Ewec and Abu Dhabi Future Energy Company (Masdar) in January, which will require an estimated $6bn.

  Today's announcement said an advanced grid infrastructure project will account for 25% of the total investment, which equates to about $2.45bn. This implies that the build, own and operate contract for the Al-Dhafra open-cycle gas turbine (OCGT), which Taqa will own 100%, will require roughly $1.35bn.

  The chosen energy infrastructure combination shows Abu Dhabi's resolve to address the high energy density of the nascent AI sector and its commitment to achieving net-zero emissions long term. 

  These major investments provide a glimpse into the scale and urgency of Abu Dhabi's AI ambitions.

  In January, for instance, the government said it plans to deploy AED13bn for a three-year digital strategy to make Abu Dhabi the first government globally to fully integrate AI into its digital services by 2027.

  The strategy includes achieving 100% adoption of sovereign cloud computing for government operations and digitising and automating 100% of processes to streamline procedures, enhance productivity and improve operational efficiency.

  The strategy is projected to contribute AED24bn to Abu Dhabi’s GDP by 2027 while creating more than 5,000 jobs to support emiratisation efforts.

  Abu Dhabi-owned data centre operator, Khazna Data Centres, is also preparing for a major capacity expansion. Construction is under way for the state's first 100MW data centre in Ajman.

  In addition, UAE AI and technology fund MGX and US-based private equity investor Silver Lake recently acquired a minority stake in Khazna, while Abu Dhabi AI firm G42 remains the company's majority shareholder.

  A meeting between US President Donald Trump and Abu Dhabi deputy ruler, Sheikh Tahnoon Bin Zayed Al-Nahyan, at the White House in March, also provides a key highlight to Abu Dhabi's unfolding AI pursuit.

  The formation of a $25bn joint venture between Abu Dhabi's ADQ and US-headquartered Energy Capital Partners (ECP) to build data centres in the US preceded that meeting.

  However, in the minds of some observers, the real diplomatic objective of the UAE is to gain easier access to US-made graphics processing units (GPUs), which are vital to the successful implementation of its AI strategy.

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  Jennifer Aguinaldo
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  Taqa and Ewec sign Dhafra OCGT and grid contracts

  3 April 2025

  Abu Dhabi National Energy Company (Taqa) and state utility and offtaker Emirates Water and Electricity Company (Ewec), have signed a 24-year power-purchase agreement (PPA) to build, own and operate an open-cycle gas turbine (OCGT) project in Abu Dhabi.

  The Al-Dhafra OCGT project will have a capacity of 1,000MW.

  Taqa will own the project 100% and will undertake the operation and maintenance (O&M) of the plant, the firms said in a joint statement issued on 3 April.

  MEED previously reported that the Italian original equipment manufacturer, Ansaldo Energia, will be supplying gas turbines for the project.

  The project's engineering, procurement and construction (EPC) contract is also expected to be formally awarded imminently to a team of South Korean and local contractors, according to industry sources. 

  In addition to the Dhafra OCGT project, Taqa Transmission, previously Transco, agreed to develop advanced power grid infrastructure to integrate the additional generation capacity to new sources of energy demand, enabling access to "reliable power with a low carbon footprint".

  According to Taqa and Ewec, both schemes will support the round-the-clock solar and battery energy storage system (bess) project, which Abu Dhabi Future Energy (Masdar) and Ewec announced in January.

  Related read: Masdar meets renewable’s moonshot challenge

  That project, comprising 5.2GW of solar photovoltaic (PV) plant and 19 gigawatt-hours of bess plant, aims to deliver up to 1GW of "baseload" power from renewable sources "24 hours a day, seven days a week".

  These projects aim to directly advance the UAE National Strategy for Artificial Intelligence 2031, and the UAE Net Zero by 2050 initiative.

  "The collaboration between Ewec, Taqa and Masdar will drive investment of around AED36bn ($9.8bn) in energy supply infrastructure in Abu Dhabi with around 75% of that to be invested in renewable and conventional power generation.

  "The remaining 25% will be invested in grid infrastructure, which will be added to the regulated asset base and will receive the regulated return," the firms said.

  The round-the-clock solar plus bess project is understood to require $6bn in investment, which implies that the BOO contract for the Dhafra OCGT is roughly $1.35bn.

  The advanced grid infrastructure will account for the remaining $2.45bn.

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  Jennifer Aguinaldo
• 
  Wood shares drop after financial warning

  3 April 2025

  Shares in the UK-based engineering company Wood Group dropped by 25% after it announced that accounting issues would delay the publication of its full-year results for 2024.

  The company, which has numerous project contracts around the Middle East and North Africa, said it had identified “material weaknesses and failures” in its financial culture within its projects business unit, following an independent review conducted by financial services company Deloitte.

  Wood said the failures included “inappropriate management pressure and override to maintain previously reported positions”, and led to instances of information withheld from Wood’s auditors.

  It also said there was an inappropriate “over-optimism and/or lack of evidence in respect of accounting judgements”.

  Wood has project contracts in Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, where the company opened its third office in Sharjah.

  The firm’s regional projects pipeline includes pre-front-end engineering and design (pre-feed) work on Saudi Aramco’s Southern and Northern Areas project in Saudi Arabia.

  It is also working on an integrated feed, detailed design, procurement support, and construction and commissioning assistance for TotalEnergies in Iraq.

  In its latest statement, Wood said: “We are committed to implementing a detailed remediation plan, including necessary follow-on actions from the review, to continue to strengthen the group’s financial culture, governance and controls.

  “This will include actions on culture, controls and organisational structure.”

  As a result of the initial report from Deloitte, Wood said:

  • A number of prior year adjustments are expected to be required for the income statement and balance sheet
  • Issues identified in a limited number of contracts in the Projects Business Unit, particularly in relation to legacy lump-sum turnkey projects
  • Issues with the application of relevant accounting standards, such as holding specific amounts on the projects balance sheet that should have been written off
  • Gaps and deficiencies within the application of controls, which relate to the monitoring and reporting of project positions within the Projects Business Unit
  • No material issues identified in our other business units (Consulting, Operations and Investment Services)

  Extensive work is needed to conclude the audit, according to Wood.

  The company has said that it is now expected to have to delay the publication of its full-year accounts and will not publish them for 2024 by 30 April 2025 as was previously expected.

  It also said that if the publication of its results is delayed, the company’s shares will be suspended from trading from 30 April 2025 as work progresses towards completion of its FY24 accounts.

  Commenting on its engagement with lenders, Wood said: “We remain in constructive dialogue with the group’s lenders regarding refinancing options and will engage with lenders in respect of the timing of our FY24 accounts, including putting in place appropriate pre-emptive waivers under our committed debt facilities.”

  Last month, Wood said it had extended the deadline for talks regarding a possible takeover by Dubai-based Dar Al-Handasah Consultants Shair & Partners Holdings (Sidara).

  The new deadline was set for 17 April.

  In its latest statement, Wood said that it remains in discussions with Sidara about a possible cash offer for “the entire issued and to be issued share capital of the company”.

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• 
  Bahrain to tender Sitra IWPP by summer

  3 April 2025

  

   

  Bahrain’s Electricity & Water Authority (EWA) is expected to issue the request for proposals for a contract to develop and operate the state’s fourth independent water and power project (IWPP) by the summer.

  The Sitra IWPP comprises a combined-cycle gas turbine (CCGT) plant that is expected to have a production capacity of about 1,200MW of electricity. The project’s seawater reverse osmosis (SWRO) desalination facility will have a production capacity of 30 million imperial gallons a day (MIGD) of potable water.

  According to a source familiar with the project, the client is expected to tender the contract to develop the Sitra IWPP by July, two months later than initially planned.

  The EWA received statements of qualifications (SOQs) from interested firms in December 2024.

  The nine companies that submitted SOQs were:

  • Al-Jomaih Energy & Water Company (Saudi Arabia)
  • Gulf Investment Corporation (Kuwait)
  • China Machinery Engineering Corporation (China)
  • Korea Electric Power Corporation (Kepco, South Korea)
  • Acwa Power (Saudi Arabia)
  • Jera (Japan)
  • Abu Dhabi National Energy Company (Taqa, UAE)
  • Alghanim International General Trading & Contracting Company (foreign branch, Kuwait)
  • Sumitomo Corporation (Japan)

  The prequalification process for bidders is understood to have been completed.

  Sources tell MEED it is safe to assume that "most, if not all" of the companies that submitted SOQs received a notice of prequalification and are expected to advance to the bidding stage. 

  The integrated plant will replace the previously planned Al-Dur 3 IWPP. 

  It will be developed on a brownfield site and strategically located in Sitra “to ensure resource efficiency and service delivery”. It is expected to be fully operational by the second quarter of 2029.

  The state utility is procuring Bahrain’s first independent water project in Al-Hidd, along with the Sitra IWPP.

  The Al-Hidd SWRO plant is expected to have a production capacity of about 60 MIGD of potable water.

  The two build, own and operate (BOO) projects will be procured under a public-private partnership framework for 20-25 years.

  Sixty representatives from utility developers and contracting firms attended a market-sounding event in Manama on 21 October for the two separate utility BOO projects.

  The EWA’s transaction advisory team for both schemes comprises KPMG Fakhro as the financial consultant, WSP Parsons Brinckerhoff as the technical consultant and Trowers & Hamlins as the legal consultant.

  Bahrain’s first three IWPPs are Al-Dur 1, Al-Hidd and Al-Dur 2.

  MEED understands that the EWA’s Sitra IWPP will likely be Bahrain’s last CCGT plant project. Solar power is expected to account for all future electricity generation capacity.

  Bahrain aims to reach net-zero carbon emissions by 2060.

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  Jennifer Aguinaldo