meed-logo

line1 line2 line3
SIGN IN / REGISTER

Cooperation strengthens Gulf markets

21 November 2024

 

The message was loud and clear at the second Gateway Gulf investment forum hosted by the Bahrain Economic Development Board (Bahrain EDB) in Manama in early November. Regional integration will be crucial to the GCC’s ongoing economic success story.

The comments by ministerial speakers and business leaders at the event underscored how the GCC has grown closer both politically and economically since the signing of the Al-Ula declaration in 2021, which effectively ended the Qatar diplomatic dispute that began in 2017, and kickstarted a new era of regional cooperation. 

The drive to bind the GCC as a more integrated economic bloc contrasts sharply with the political backdrop of the first Gateway Gulf. That event in May 2018 started the day President Donald Trump withdrew the US from the Joint Cooperative Plan of Action, better known as the Iran nuclear deal, and was set amid the GCC’s diplomatic dispute with Qatar.

Closer ties

The political backdrop is very different in 2024; the six GCC states enjoy warm relations, and tensions with Iran have cooled following a series of diplomatic rapprochements involving Tehran, Riyadh and Abu Dhabi. 

These diplomatic efforts have resulted in a more stable business environment that has produced robust economic growth, record levels of inward investment and record spending on projects. 

“As with every great moment in history, our region’s progress depends on continued unity and collaboration with current geopolitical complexities. A unified GCC can serve as a stabilising force shaping not only our own future but influencing the future,” said Bahrain’s Finance & National Economy Minister, Sheikh Salman Bin Khalifa Al-Khalifa, during his opening address at Gateway Gulf. 

The stability that the Gulf offers has enhanced its appeal to investors at a time of war and instability in other areas. 

“We have become one of the most promising destinations, not only for those looking to raise capital, but also for those looking to deploy it,” said Sheikh Salman. “Dynamic transformation is sweeping across the region.”

Saudi Arabia’s Investment Minister Khalid Al-Falih also highlighted how the GCC has managed to prosper while other regions struggle with challenges. “GCC countries come out of these tensions stronger. We know how to navigate unfortunate difficulties. We’ve seen it over many, many decades … and if you look at the numbers, our credit ratings are going up, our stock markets are strong, unemployment is coming down across the region,” he said.

Regional integration will be crucial to the GCC’s ongoing economic success story

Attracting investment

Investment funds also play a key role in the region’s success. “The GCC also has [Saudi Arabia’s Public Investment Fund] the PIF and the Emirati, Qatari and Kuwaiti funds that are all well-capitalised sovereign funds that can co-invest with global investors,” said Al-Falih. 

Over the past year, some of the world’s leading investment companies have formed joint ventures with the GCC’s sovereign wealth funds. 

In November, US-based Apollo and Abu Dhabi’s Mubadala Investment Company extended their multibillion-dollar partnership, initially formed in 2022, to capitalise on global private debt and equity opportunities. This extension enhances Apollo’s Capital Solutions division, supporting large-scale investment origination to meet rising demand for private financing. 

The partnership aligns with Apollo’s goal to reach $275bn in annual originations, with a focus on sectors like clean energy and digital infrastructure.

In April 2024, BlackRock and the PIF agreed to establish BlackRock Riyadh Investment Management, a multi-asset investment firm based in Riyadh. The venture began with an anchor investment of up to $5bn from the PIF, aiming to accelerate the growth of Saudi Arabia’s capital markets by supporting foreign institutional investment.

Al-Falih also highlighted changes in how sovereign wealth funds that traditionally used to invest overseas to offset volatility in the oil markets are increasingly looking to domestic investment within the GCC. 

“We are investing globally, but quite frankly, when we look around the world, we can’t find a better location to invest than within the region and in our own economies, which are transitioning,” he said. 

Sheikh Salman echoed Al-Falih’s comments. “I chair Mumtalakat, [Bahrain’s] sovereign wealth fund, and we look at where we deploy capital. What we have found is that the most compelling investment opportunities, with the highest return on equity, are increasingly at home or in the region. 

“Mumtalakat has in effect turned itself into the joint venture partner of choice for inward investment because it provides a higher return on equity versus other investments in other places,” he said.

Many of those investments have involved infrastructure, with notable transactions in oil infrastructure, the power and water sector and real estate. 

An example came in September, when Bahrain’s state-owned Bapco Energies sold a stake in the Saudi Bahrain Pipeline Company (SBPC) to a fund managed by BlackRock. SBPC owns a portion of the 112-kilometre pipeline supplying crude oil from Saudi Aramco to Bahrain’s Sitra refinery.


Sheikh Salman and Saudi Investment Minister Khalid Al-Falih met at Gateway Gulf 2024. Credit: Bahrain News Agency

Another emerging trend could be cross-border mergers and acquisitions across the GCC. Over the past decade, there has been a steady stream of consolidation as companies combine their operations. This has remained within national borders and typically involved government or government-related entities. 

Abu Dhabi, in particular, has been a hotbed for consolidation involving companies in a variety of sectors, including banking, hydrocarbons, industry, real estate and construction. 

The new trend is for companies to merge with other players outside their national boundaries, but within the GCC. Also at Gateway Gulf, Aluminium Bahrain (Alba) chairman Khalid Al-Rumaihi provided an update and insight into the proposed merger of Alba with the aluminium business of Saudi Arabian Mining Company (Maaden). 

The pioneering transaction could pave the way for further consolidation across the region. Al-Rumaihi emphasised that private sector deals need to make business sense when asked about the impact of the deal on future transactions. 

“When we talk about integration in the GCC, the private sector should lead, and we hope that others will look at this [transaction] and explore opportunities. It could happen in banking, it could happen in other industries, but I think it could accelerate, and it needs the transaction to make sense,” he said.

The GCC’s projected growth will provide plenty of opportunities for everyone

Promoting collaboration

As cooperation across the GCC intensifies, seasoned Gulf watchers will be reminded that the region has been through periods of accelerated integration, only to have those efforts dashed due to internal disputes and greater protectionism introduced during economic downturns. The most cited historical example is the single currency project pursued in the early 2000s, which was reportedly aborted after governments could not decide where to locate the GCC Central Bank.

At the same time, other regional projects, such as the GCC rail scheme, had failed to make substantial progress.   

Speaking at Gateway Gulf, Bahrain’s Industry & Commerce Minister Abdulla Bin Adel Fakhro said that the GCC has evolved. He explained that in the past, the GCC countries produced oil and exported it out of the region, which gave little economic incentive for cooperation. Today, economies are more diversified and trade with one another enhances cross-border collaboration.  

Collaboration is already visible in the projects market. There are schemes to connect the electricity grids of the UAE with Saudi Arabia and Oman, and the once dormant GCC rail project is advancing, with progress being made on rail projects in all six GCC states. 

Growth also supports integration. Sheikh Salman said that the GCC’s projected growth will provide plenty of opportunities for everyone. 

“The GDP of the Gulf countries is approximately $2.3tn. Over 50% of that is in Saudi Arabia and over 25% is in the UAE. That $2.3tn is conservatively going to reach $3tn of GDP by 2030 and $6tn of GDP by 2050,” said Sheikh Salman. 

“That in and of itself is the single biggest opportunity for any other GCC country – to ensure that they are providing the services, providing the growth engine, providing any sort of services to [support] that growth.”

On a similar note, Al-Falih explained that what is good for one GCC country will ultimately benefit all. “If it is good for Bahrain, it is good for Saudi Arabia, and what is good for Saudi Arabia is good for the rest of the GCC. It is the old adage that a rising tide lifts all boats.” 

https://image.digitalinsightresearch.in/uploads/NewsArticle/12965411/main.gif
Colin Foreman

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

Click here to register
Exclusive from Meed
Related Articles
  • Bahrain’s economy walks precarious path

    26 November 2025

    Download the PDF

    MEED’s December 2025 report on Bahrain includes:

    > COMMENT: Manama pursues reform amid strain
    > GVT & ECONOMY: Bahrain’s cautious economic evolution
    > BANKING: Mergers loom over Bahrain’s banking system
    > OIL & GAS: Bahrain remains in pursuit of hydrocarbon resources
    > POWER & WATER: Bahrain advances utility reform
    > CONSTRUCTION: Bahrain construction faces major slowdown
    > TRANSPORT: Air Asia aviation deal boosts connectivity

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15159666/main.gif
    MEED Editorial
  • Rua Al-Madinah signs hotel operations agreement

    26 November 2025

    Saudi Arabia’s Rua Al-Madinah, the Public Investment Fund (PIF) subsidiary tasked with Medina’s tourism and cultural development, has signed a hotel operations and management agreement with Adeera Hospitality for its Rua Al-Madinah project.

    Adeera Hospitality, which PIF also backs, will operate two buildings comprising 250 hotel rooms and 120 residential units under its Alia brand within the Rua Al-Madinah project, which is being developed near the Prophet’s Mosque.

    Adeera joins Rua Al-Madinah’s roster of hotel operators, which includes leading global hospitality brands such as Marriott, Hyatt, Accor and Hilton.

    The Rua Al-Madinah development includes the construction of 18 hotels under three categories – three-star, four-star and five-star – as well as secondary infrastructure.

    The towers will range in height from 11 to 21 storeys.

    Rua Al-Madinah estimates that superblock five will require 430,000 cubic metres of concrete, 875,000 square metres of block wall, 423,000 sq m of drywall, 74,000 tonnes of steel rebar, 215,000 sq m of tiles, and 228,000 sq m of facades, curtain walls and windows.

    The hotels, which will mainly provide accommodation for pilgrims visiting the holy city, will have a built-up area of about 65,000 sq m.

    In February last year, the client awarded two contracts worth SR300m ($80m) to international consulting firms for work on the superblocks four and five components of the Rua Al-Madinah project.

    Rua Al-Madinah signed a contract with US-based engineering firm Jacobs for design consultancy services for 12 hotels and other infrastructure for superblock four of the project.

    Another contract was signed with US-based KEO International Consultants to oversee the implementation of the superblock five project.

    Other consultants working on superblock five include US-based Perkins Eastman and Singapore-based Meinhardt. 

    UAE-based Ema Design is the interior designer.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15158923/main.jpg
    Yasir Iqbal
  • Meraas confirms $517m The Acres villas contract award

    26 November 2025

    Dubai-based real estate developer Meraas, now part of Dubai Holding Group, has confirmed that it has awarded a AED1.9bn ($517m) contract to build 642 three-, four- and five-bedroom villas as part of the first phase of its residential community, The Acres, in Dubailand.

    The contract was awarded to the local firm United Engineering Construction Company.

    MEED exclusively reported in August that Meraas had awarded the contract for the project.

    The Acres project is designed by local architectural practice U+A Architects.

    The masterplan includes 1,200 villas ranging from three to seven bedrooms.

    It also features a nursery, school, clinic, mosques, clubhouses, a retail zone, a 2,000-square-metre garden, walking and biking trails, an outdoor gym, children’s playgrounds, swimming pools and sports facilities.

    The latest announcement follows Meraas awarding a AED440m ($120m) contract for the construction of the Northline residential project in the Al-Wasl area of Dubai.

    The contract was awarded to the local GCC Contracting Company.

    The project includes the construction of three residential buildings. Construction work is expected to begin shortly, and the project is slated for completion by 2027.

    Meraas’ latest project contract awards in Dubai are backed by heightened real estate activity in the UAE’s construction market. Schemes worth over $323bn are in the execution or planning stages, according to UK analytics firm GlobalData.

    The company forecasts that the output of the UAE’s construction sector will grow by 4.2% in real terms in 2025, supported by developments in infrastructure, energy and utilities, as well as residential construction projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15158561/main.jpg
    Yasir Iqbal
  • December deadline for Riyadh airport fourth runway

    26 November 2025

     

    King Salman International Airport Development Company (KSIADC) has allowed firms until 3 December to bid for the design-and-build contract for the fourth runway at King Salman International airport (KSIA) in Riyadh.

    The tender was first floated on 17 April. The previous bid submission deadline was 28 October.

    It is understood that the third and fourth runways will add to the two existing runways at Riyadh’s King Khalid International airport, which will eventually become part of KSIA.

    KSIADC, which is backed by Saudi Arabia’s Public Investment Fund, prequalified firms in September last year for the main engineering, procurement and construction packages; early and enabling works; specialist systems and integration; specialist systems, materials and equipment; engineering and design; professional services; health, safety, security, environment and wellbeing services; modular installation and prefabrication; local content; and environmental, social, governance and other services.

    The entire scheme is divided into eight assets. These are:

    • Iconic Terminal
    • Terminal 6
    • Private aviation terminal 
    • Central runway and temporary apron
    • Hangars
    • Landside transport
    • Cargo buildings
    • Real estate

    In August last year, KSIADC confirmed it had signed up several architectural and design firms for the various elements of the project.

    US-based firm Bechtel Corporation will manage the delivery of three new terminals, including the terminal for commercial carriers, Terminal 6 for low-cost carriers and a new private aviation terminal with hangars.

    Parsons, also of the US, was chosen as the delivery partner for two packages. One covers the airside infrastructure, including the runways, taxiways, air traffic control towers, fuel farms and fire stations. The other involves the infrastructure connecting the airport to the rest of the city, including utilities and roads.

    UK-based Foster+Partners will design the airport’s masterplan, including the terminals, six runways and a multi-asset real estate area.

    US-based engineering firm Jacobs will provide specialist consultancy services for the masterplan and the design of the new runways.

    UK-based engineering firm Mace was appointed as the project’s delivery partner and local firm Nera was awarded the airspace design consultancy contract.

    Project scale

    The project covers an area of about 57 square kilometres (sq km), allowing for six parallel runways, and will include the existing terminals at King Khalid International airport. It will also include 12 sq km of airport support facilities, residential and recreational facilities, retail outlets and other logistics real estate.

    If the project is completed on time in 2030, it will become the world’s largest operating airport in terms of passenger capacity, according to UK analytics firm GlobalData.

    The airport aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. The goal for cargo is to process 3.5 million tonnes a year by 2050.

    Saudi Arabia plans to invest $100bn in its aviation sector. Riyadh’s Saudi Aviation Strategy, announced by the General Authority of Civil Aviation (Gaca), aims to triple Saudi Arabia’s annual passenger traffic to 330 million travellers by 2030.

    It also aims to increase air cargo traffic to 4.5 million tonnes and raise the country’s total air connections to more than 250 destinations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15158546/main.jpg
    Yasir Iqbal
  • Chinese contractor appointed for Algerian refinery project

    26 November 2025

    China’s Sinopec Guangzhou Engineering Company has signed a contract for the construction of a heavy naphtha catalytic processing unit at the Arzew refinery in Algeria.

    The contract was signed with the Algerian national oil and gas company Sonatrach.

    The contract uses the engineering, procurement, construction and operation model.

    Under the terms of the contract, Sinopec Guangzhou Engineering Company will handle the entire project lifecycle, from initial design to long-term management and operation.

    The project will be completed over 30 months, according to a statement from the Algerian Ministry of Hydrocarbons & Mines.

    The unit will have an annual capacity of 738,000 tonnes of heavy naphtha and will enable the refinery to increase gasoline production from 550,000 tonnes to 1.2 million tonnes a year.

    Algeria’s Ministry of Hydrocarbons & Mines said this represented “a significant step” that will strengthen the national capacity for gasoline production and help meet demand across various regions, particularly in the west and southwest of the country.

    Sinopec Guangzhou Engineering Company is a subsidiary of China Petroleum & Chemical Corporation (Sinopec), which is listed on stock exchanges in Hong Kong, Shanghai and New York.

    The project is part of Sonatrach’s wider programme to modernise and expand national refining capacities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15157814/main.jpg
    Wil Crisp