Data centre activity soars in Saudi Arabia
23 February 2024
Saudi Arabia is experiencing a major uptick in the construction of data centre assets across the country.
Despite the preference for data centres to be inconspicuous due to security concerns, it is not uncommon to see certain construction sites or completed facilities marked clearly as such when one navigates the capital city, Riyadh.
Data sovereignty regulations as well as the widespread use of electronic commerce and social media particularly by young Saudis are driving the data centre construction boom, notes a Riyadh-based expert.
Government agencies, banks, and family-owned conglomerates, in addition to local and international data centre developers and operators, have either started constructing or are planning to start the construction of data centre facilities across Saudi Arabia.
The value of known data centre projects pipeline in the kingdom falls under $1bn, according to regional projects tracking service MEED Projects. While this value corresponds to just one utility-scale renewable energy plant or a minor upgrade of an oil production facility in Saudi Arabia, future plans point to a major expansion of such facilities, which underpin the kingdom's digital hub and artificial intelligence (AI) strategies.
For instance, the government announced in 2021 a plan to build a network of large-scale data centres that will require investments of up to $18bn by 2030. At the time, the kingdom's Communications & Information Technology Ministry (MCIT) tapped local firms Gulf Data Hub, Al-Moammar Information Systems and Saudi FAS Holding as its initial partners for the scheme.
The following year, Saudi-headquartered Quantum Switch Tamasuk (QST) unveiled plans to design and operate data centre projects with a cumulative total capacity of 300MW for the MCIT by 2026. The project will comprise six locations across Riyadh, Dammam, Jeddah and Neom, with a reported budget of at least $2bn.
Foreign investments have started pouring in to accommodate the rising capacity demand as well as the kingdom's ambition to become a digital hub.
Dubai developer Damac Properties-owned Edgnex is constructing a data centre, which will have a minimum capacity of 20MW, at Industrial City 2.
In October last year, South Korea’s second-largest telecoms company, KT, in collaboration with Hyundai Engineering & Construction (Hyundai E&C) and the local telecoms group STC, signed a memorandum of understanding (MoU) to construct internet data centres (IDC) and smart cities in the kingdom.
Similarly, the UAE-based cloud and data service provider Khazna Data Centres also plans to build data centres in Saudi Arabia as it executes its overseas expansion plans.
In May last year, sovereign vehicle, the Public Investment Fund (PIF), teamed up with US-based infrastructure investor and asset manager DigitalBridge to develop data centres and related digital infrastructure in Saudi Arabia and across the GCC states.
Telecoms service provider Zain is also expected to build a new data centre with some support from the kingdom's SR5tn ($1.35tn) Shareek private sector investment programme.
Crucially, US-headquartered IT and cloud services giants Microsoft and Oracle pledged at the annual Riyadh tech conference, Leap, last year, to invest a total of $9bn in the kingdom. This will go into the construction of multiple data centres to form a so-called cloud region catering to Saudi Arabia and the wider Middle East region.
Similarly, Chinese tech firm Huawei has pledged to invest $400m to build cloud services in the kingdom.
"The demand is there that's why we are focusing on these projects," said the Riyadh-based construction expert, who also acknowledges that the depreciation rate for data centres is higher compared to real estate assets due to the high obsolescence of technology and the need to replace data centre components frequently.
Digital hub
A growth in the number of subsea cable landing sites in the kingdom is occurring in parallel with the substantial growth in data centre facilities and capacity.
A 45,000-kilometre subsea cable network connecting Africa, Asia and Europe, 2Africa, reached two of its four landing sites in Saudi Arabia in May 2023. The landing sites are in Jeddah and Yanbu. The cable is expected to reach the third landing site in Duba late last year and the fourth site in Al-Khobar in 2024.
Once completed, 2Africa will connect Saudi Arabia to 33 countries, bringing the kingdom closer to its goal of becoming a digital hub.
The stakes are high for the kingdom, which has simultaneously launched plans to industrialise its economy, decarbonise its industries, increase localisation and reach net-zero carbon emissions by 2060.
While constructing energy-intensive data centres – which globally account for 1% of energy-related greenhouse gas emissions – may seem counter-intuitive to these objectives, the rapid advancements in cooling and other data centre components, as well as the potential deployment of clean energy to power them, are expected to ease these assets' environmental impact.
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MEED previously reported that AGOC issued main tenders for the seven EPC packages in 2025. Contractors were initially set deadlines of 24 October for technical bid submissions and 9 November for the submission of commercial bids, which was then extended by AGOC until 22 December.
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In a statement, NCP said the list includes 55 local companies and 34 international firms comprising 19 developers; 33 engineering, procurement and construction (EPC) contractors; 13 operators; 11 advisors; nine equity investors; three financial institutions and one in the other category.
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- Alfanar Company (local)
- Nesma Infrastructure & Technology (local)
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- WCT International (Malaysia)
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- Mada International Holding (local)
- Vision Invest (local)
- Almutlaq Real Estate Investment Company (local)
- Samsung C&T (South Korea)
- Sarh Developments (local)
- IC Ictas (Turkiye)
- Kalyon (Turkiye)
- Saudi Binladin Group (local)
- Lamar Holding (Bahrain)
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- SkyBridge (US)
- Avic (China)
- Saudi Pan Kingdom Company (local)
- Fas Energy & Infrastructure (local)
- Alghanim International (Kuwait)
- Abdul Ali Al-Ajmi (local)
- Technical Development Company for Contracting (local)
- China Civil Engineering Construction Corporation (China)
- Almansouryah General Contracting (local)
- Al-Fahd Company (local)
- YDA Insaat (Turkiye)
- China Harbour Engineering Company (China)
- Rowad Modern Engineering (Egypt)
- Abdullah Fahad Al-Khaledi Company for General Contracting (Saudi Arabia)
- Shade Corporation (local)
- Al-Ayuni Investment & Contracting (local)
- Setec (France)
- International Hospitals Construction Company (local)
- Arkad Engineering & Construction Company (local)
- Alrawaf Trading & Contracting (local)
- Abdulrahman Saad Alrashid & Sons (local)
- Mistacoglu Holding (Turkiye)
- Al-Jaber Contracting (Qatar)
- Mobco Construction (local)
- Sateaa Al-Tameer for Real Estate Development & Investment (local)
- China State Construction Engineering Corporation Ltd (China)
- China Construction Excellence Company (China)
- Safari Company (Saudi Arabia)
- Al-Sharif Group Holdings (local)
- Nayef Abdulkarim Company Al-Rakhis Contracting Company (local)
- Al-Yamama (local)
- Almabani (local)
- Buna Al-Khaleej Contracting (local)
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- Annasban Group (local)
- Indiza Airport Management (South Africa)
- GMR Airports (India)
- Flynas (local)
- Bangalore International Airport Limited (India)
- Idemia Public Security (France)
- Saudi Ground Services (local)
- Oman Airports Management Company (Oman)
- Al-Qussie International (local)
- Serco Saudi Arabia (local)
- Al-Shams National Global Energy (local)
- DAA International (Ireland)
- TAV Airports (Turkiye)
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- Typsa (Spain)
- Ghesa Ingenieria Y Tecnologia (Spain)
- Pini Group (Switzerland)
- Hill International (United States)
- Walter P Moore Engineering Consultants (United States)
- Foster + Partners (UK)
- Arabtech Jardaneh (Jordan)
- Currie & Brown (UK)
- Meinhardt (Singapore)
- Populous (UK)
Equity Investors
- Namaya International Investment Company (local)
- Zamil Group Investment Company (local)
- Buhur for investment (local)
- Asyad Holding (local)
- IDS Consulting (local)
- Al-Gassim Investment Holding (local)
- Erada Advanced Projects (local)
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Financial Institutions
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Other
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The project scope includes the redevelopment of the passenger terminal as well as other associated facilities such as airside infrastructure, including runway, taxiways and aprons.
The project will be developed on a design, finance, construction, operations, maintenance and transfer basis.
The clients issued an expression of interest notice for the project on 9 February, and companies were given until 23 February to submit responses.
The latest development follows Matarat Holding and NCP prequalifying five teams to bid for a contract to develop the new Taif international airport project in Mecca Province in January.
According to local media reports, four consortiums and one standalone company have been prequalified to proceed to the next stage of the project.
The new Taif International airport will be located 21 kilometres southeast of the existing Taif airport, with a capacity to accommodate 2.5 million passengers by 2030.
The clients opted for a 30-year build-transfer-operate (BTO) contract model, including the construction period.
Previous tenders
The Taif, Hail and Qassim airport schemes were previously tendered and awarded as public-private partnership (PPP) projects using a BTO model.
Saudi Arabia’s General Authority of Civil Aviation (Gaca) awarded the contracts to develop four airport PPP projects to two separate consortiums in 2017.
A team of Tukiye’s TAV Airports and the local Al-Rajhi Holding Group won the 30-year concession agreement to build, transfer and operate airport passenger terminals in Yanbu, Qassim and Hail.
A second team, comprising Lebanon’s Consolidated Contractors Company, Germany’s Munich Airport International and local firm Asyad Group, won the BTO contract to develop Taif International airport.
However, these projects stalled following the restructuring of the kingdom’s aviation sector.
Saudi Arabia has already privatised airports, including the $1.2bn Prince Mohammed Bin Abdulaziz International airport in Medina, which was developed as a PPP and opened in 2015.
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Egypt brings new gas wells online10 March 2026
Egypt has brought new wells online in the Mediterranean Sea and the country’s Western Desert region, according to a statement from Egypt’s Petroleum & Mineral Resources Ministry.
In the Mediterranean, the second well in the West El-Burullus (WEB) offshore field was brought online, increasing the field’s output from about 25 to 37 million cubic feet a day (cf/d).
The project is being developed and produced through a joint‑venture vehicle known as PetroWeb, in which the lead partner is US-based Cheiron.
The production is forecast to exceed 70 million cf/d following the connection of the third well in the coming days, while the drilling of the fourth well has been completed with promising results, according to the ministry.
The development plan includes drilling two additional wells on the Papyrus platform, linked to WEB, to maximise the utilisation of the concession area's resources and accelerate production.
The well in the Western Desert has been brought on by Badr El-Din Petroleum Company (Bapetco), which is a joint venture of London-headquartered Shell and state-owned Egyptian General Petroleum Corporation.
Production tests showed rates of 10-15 million cf/d, in addition to 300–650 b/d of condensate, according to Egypt’s Petroleum & Mineral Resources Ministry.
The latest well has increased the confirmed reserves in the area from 15 billion cubic feet to 25 billion cubic feet.
Four more production wells are planned for in the Badr El-Din concession as Bapetco continues its push to ramp up production from the field.
Egypt is pushing to increase domestic production of gas amid soaring global prices due to the US and Israel’s war with Iran.
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