Bridging the infrastructure capacity gap
2 April 2024

The Middle East and North Africa (Mena) region faces a massive infrastructure gap, with estimates of the shortfall ranging from $75bn to $100bn annually.
This translates to a cumulative need for $2-2.5tn in infrastructure investment alone by 2050. Bridging this funding gap will require a drastic increase in the level of investment.
In 2020, the World Bank stated that Mena countries needed to spend at least 8.2% of GDP to meet their infrastructure goals through to 2030. However, it had been averaging a spend of just 3% over the prior decade – mostly from public sector funds, alongside multilateral and bilateral debt financing.
In the intervening years, the additional fiscal constraints imposed by the pandemic and global economic shocks, such as food price inflation, have further hindered regional public spending on infrastructure.
In 2023, the ICD-Refinitiv OIC Infrastructure Outlook valued the region’s outstanding funding gap for infrastructure development at $994bn. The gaps included a $685bn shortfall in investment in road infrastructure; a $111bn funding gap in the water sector; a $65bn gap in telecoms; $47bn in rail; $34bn in port infrastructure; $27bn in electricity network investment; and $25bn in airport infrastructure investment.
This funding gap has real, material impacts on economic prosperity and the prospects for economic growth. The shortfall in investment in road infrastructure, for example, is estimated to cost the Mena region a staggering 5.5% in GDP a year due to inefficiency and accidents, according to the World Bank.
A 2020 study in the Review of Middle East Economics and Finance found that manufacturing firms in the Mena region faced the most severe durations of power outages a month of any region, at 64 hours a month. The perceived value of the business losses due to these power outages was estimated to be around 4.8% of total sales.
Meeting the region’s annual investment needs could generate about 2 million direct jobs and 2.5 million direct, indirect and induced infrastructure-related jobs, according to the OECD.
This is critical when half of the region’s population is under 24 years old, and 29% are not in employment, education or training, as per the OECD figures.
Another very tangible infrastructure gap is water capacity. The current annual water shortage in the Mena region is about 42 cubic kilometres, but by 2050, this is projected to grow fivefold to 199 cubic kilometres a year under average climate scenarios and potentially up to 283 cubic kilometres a year under drier conditions.
These examples highlight the need for substantial investments to bridge the infrastructure deficiencies, ensure the conditions for economic growth, and enhance overall sustainability in the Mena region.
To address the challenges, a comprehensive and multi-faceted approach is needed to incentivise the private sector to support regional infrastructure investments. This includes governments establishing clear policy directions and regulatory frameworks to attract private capital mobilisation.
This funding gap has real, material impacts on economic prosperity and the prospects for economic growth
Technological adaptation
In parallel with the need for governments to proactively improve the conditions for investment, the delivery of future infrastructure requirements also anticipates the adoption of emerging technology.
The goal of many countries to achieve net zero by 2050 also layers further complexity onto existing infrastructure challenges. Regional efforts such as the Middle East Green Initiative and the Circular Carbon Economy framework nevertheless demonstrate the region’s commitment to achieving its net-zero targets.
Reaching net zero will entail building infrastructure that is not just bigger and better, but smarter. At the Global Infrastructure Initiative Summit hosted by McKinsey in Dubai in February, disruptive thinking and technology were identified as vital to the industry’s evolution to meet the needs of a net-zero future.
Industry leaders called for a nuts-and-bolts overhaul of the industry from the bottom up, with more sustainable alternatives to even centuries-old staples such as Portland cement and rebar. The digitalisation of the industry and the advent of machine-learning and AI also hold huge potential for cutting waste and designing more organic, efficient structures.
The summit highlighted that solving future infrastructure requirements will also likely necessitate overcoming technology hurdles and bringing costs down through research and development, much like the costs of solar power or reverse osmosis desalination have come down in the region.
Alistair Green, a senior partner in McKinsey’s global infrastructure practice, pointed to the technologies that “are not at conviction, yet: the technology hasn’t even really been proven outside of the lab – like flow batteries, which are an alternative to lithium-ion batteries that can be used for grid-scale storage of long duration, energy storage. This is a technology problem that we’re actively investing in researching in order to bring the costs down.”
Strategy& and engineering consultancy Dar recently reported that sustainable construction technologies can potentially reduce lifecycle emissions from the Mena region’s $2tn construction pipeline through to 2035 by 50%-60% for planned projects. Simple changes can be highly effective, such as incorporating dynamic facades into building designs, which can deliver energy savings of up to 55% in hot countries.
The key is the level of innovation, not the level of technology. In the right application, a low-tech solution may be more efficient. If a low-tech solution is scalable, it is also likely to be more cost-efficient.
In the arid Ait Baamrane region of Morocco, a 2015 project by the NGO Dar Si Hmad has created the world’s largest operational fog-harvesting system, providing potable water using a system of shore-side nets that capture and condense the fog rolling in off the ocean. Launched after a decade of research, the system yields approximately 22 litres of water a day for each square metre of net. It demonstrates that infrastructure does not need to be expensive or complex to have a positive sustainability outcome.
The most pressing need for the Mena region is to improve the attractiveness of its infrastructure investment opportunities
Accessing finance
Without sufficient finance, the effectiveness of infrastructure development, including technological innovation within the sector, will be throttled. The most pressing need for the Mena region is to improve the attractiveness of its infrastructure investment opportunities.
Many governments, especially in the Gulf, have been focused on encouraging the private sector through better and wider public-private partnership (PPP) arrangements, with mixed results. Some countries have struggled to deliver PPP frameworks with sufficient commercial appeal and bankability, a problem usually linked to unattractive risk allocations on the private sector side.
Nevertheless, the mobilisation of PPPs and the creation of more transparent and efficient regulatory frameworks around them are routinely identified as vital for attracting and mobilising private capital.
The delivery of more sustainable infrastructure with a view to net-zero targets also brings the potential to tap into green finance, including green bonds and sharia-compliant sukuk. Projects targeted towards carbon neutrality open themselves up to more diverse avenues of potential finance, including international climate mitigation and adaptation funds.
Multilateral development banks, such as the Asian Infrastructure Investment Bank, support initiatives like the Catalyst Mena Climate Fund 2, which works to mobilise private capital for infrastructure projects focused on renewable energy, sustainable utility schemes and green hydrogen capacity.
Governments in the region are also taking steps to mobilise climate finance by issuing green sovereign bonds and sukuk to fund clean transportation, waste management and green building schemes.
The UAE’s infrastructure development is guided by the Green Agenda 2030 policy framework. Under this aegis, UAE banks, including Mashreq Bank and First Abu Dhabi Bank, have pledged to mobilise $270bn in green financing by 2030 for environmentally impactful projects.
Infrastructure financing schemes are an important step towards drawing more private sector liquidity into the infrastructure industry, but it is also just a start compared to what will be required to deliver the region’s infrastructure needs.
Deep regional inequality also needs to be addressed. While countries such as Saudi Arabia and the UAE may currently be meeting the World Bank’s 8.2% of GDP infrastructure spending targets, the region’s hydrocarbon importers will likely need far more outside assistance.
For the region as a whole to thrive, countries will also need to work together and synergistically to deliver holistic infrastructure roadmaps. Just as the GCC is working together to deliver the Gulf Railway, the Levant and North Africa must work together to develop their shared infrastructure.
Only through cooperation and joint initiatives will the Mena region stand to bridge its infrastructure gap.
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According to a source, technical and financial offers were opened last month. The utility received bids on 1 July.
Phase seven will add 2,000MW from photovoltaic solar panels and include a 1,400MW battery energy storage system (bess) with a six-hour capacity, providing a total storage capacity of 8,400 megawatt-hours.
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The winning bidder “is likely” to come from one of those three, a source told MEED.
As MEED understands, the previously prequalified Electricite de France did not submit a bid for the project.
Dewa completed the prequalification process for the latest phase of the world’s largest single-site solar park in 2025.
As previously reported, 47 firms submitted their responses to Dewa’s expression of interest request for the contract in March 2025. The main tender was issued last November.
The following companies were among those prequalified to submit main contract bids on the project:
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Meanwhile, construction on the 1,800MW sixth phase of the MBR Solar Park is nearing completion, with commissioning expected by the end of the third quarter.
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.
Dewa increased its flagship solar project’s 2030 installed capacity target by 45% in 2025, from 5,000MW to 7,260MW. This comprises a total investment of AED50bn ($13.6bn).
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> 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/18031819/main.jpg -
Three groups bid for $5bn Asir-Jizan highway3 August 2026

Three groups have submitted bids for an estimated SR20bn ($5bn) contract to develop and operate the Asir-Jizan highway project on a public-private partnership (PPP) basis.
According to sources close to the project, the consortiums that bid are:
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The 136-kilometre Asir-Jizan highway will have three lanes in each direction and include six intersections, 57 bridges totalling 18km and 11 tunnels totalling 9km.
The project is one of four planned highway schemes in the kingdom’s privatisation and public-private partnership pipeline.
The route begins in Al-Farah in Asir and extends to the Red Sea through Jizan.
The 30-year contract will follow a design, build, finance, operate and maintain model.
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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.
The project aims to enhance and sustain oil production at the Rumaitha and Shanayel fields at a rate of 45,000 barrels a day (b/d). It forms part of Adnoc Onshore’s contribution to parent company Adnoc Group’s broader objective of increasing oil production capacity to 5 million b/d by 2027 through its Accelerated Integrated Programme 5 (AiP5). Adnoc Group currently has a production capacity of 4.85 million b/d.
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:
On-plot facilities:
- Oil train: One new oil train with slug catcher, two-stage separation, desalting, exchangers for crude heating and stabilisation, and all associated interconnections, utilities and civil/structural works, etc.
- Produced water treatment (PWT): New produced water treatment package to enable 100% produced water reinjection (PWRI), including chemical dosing, tanks, pumps, all associated controls and blending with aquifer water, etc.
- 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.
- Gas handling and export:
- Low-pressure gas compression system
- Medium-pressure gas compression system
- Gas dehydration and regeneration system
- Export gas compression system
- Utilities and offsites: Plant air and instrument air systems, nitrogen generation system, potable water system, vapour recovery system (liquid ejector package), fuel gas import and distribution, closed and open drain systems, hot oil heater, snuffing nitrogen package, enclosed ground flare systems (high-pressure and tank flares), etc.
- Modifications in existing systems, including, but not limited to, installation of a slug catcher at phase-I, connectivity of gas systems, water systems, existing high-pressure compressors modifications, etc
- Electrical, instrumentation and control, and safety: Electrical systems, instrumentation and control system (ICSS, F&G system, field instrumentation, HIPPS, etc.), substation and ITR room building, fire water system, etc.
- Overhead line (220 kV): Installation and extension of overhead lines and 220 KV GIS compound or equivalent power distribution solutions to the central processing plant and other designated areas, as necessary.
Off-plot facilities:
- New gas-lifted oil producers and water injectors installation with necessary piping, controls, etc. and their connections to the new or existing clusters and pipeline networks
- New clusters with facilities such as control panels, ITR, production and test manifolds, headers, chemical injection skids, multiphase flow meters, closed drain systems, HIPPS valves, WHCPs, pig traps, ICSS/telecom extensions, etc.
- Modifications in existing clusters, including the addition or extension of manifolds, headers, additional pipelines with pig traps, ICSS/telecom extensions, chemical injection kids, etc.
- Gathering and injection networks: Construction of new and modified oil gathering and water injection trunklines/laterals, pigging facilities (launchers/receivers), valve stations, block valves, corrosion protection and monitoring, and all associated equipment, etc.
- Export gas pipelines and Adnoc Gas interface: Provision for export gas pipeline and facilities from Rumaitha central processing plant to new manifold station and from NMS to Adnoc Gas, including isolation/blowdown, etc.
- Overhead line: Installation and extension of 33kV overhead lines to clusters, etc., as required.
The tendering exercise for the Rumaitha and Shanayel on-plot and off-plot facilities project is taking place as Adnoc Onshore continues to make progress with EPC works on another, similar project to build off-plot facilities at the Southeast cluster of oil fields in Abu Dhabi, which is also integral to Adnoc Group’s AiP5 campaign.
The Southeast cluster comprises the Asab, Mender, Qusahwira, Sahil and Shah fields and accounts for approximately a third of Adnoc Onshore’s oil production capacity.
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.
The overall scope of work on the Southeast off-plot facilities project includes tying in more than 150 wells across the area’s fields, upgrading remote and central degassing stations, laying more than 270 kilometres of flowlines, digitising wells for remote monitoring, and implementing artificial intelligence-driven telemetry technologies.
MEED also recently reported that CPECC awarded subcontracts on the Southeast off-plot facilities project, in its capacity as the main EPC contractor.
The off-plot facilities project is a component of the overall $2bn-$3bn South East AIP5 development, with the on-plot facilities project forming the other part of the programme.
CPECC is also performing EPC works on the Southeast on-plot facilities project in a consortium with Greece-headquartered Archirodon. Adnoc Onshore awarded an estimated $1.5bn contract for that project to the consortium in December 2024, with EPC works scheduled for completion in 2027.
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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:
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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
Gulf construction holds huge emissions savings potential