meed-logo

line1 line2 line3
SIGN IN / REGISTER

Data centres churn investments

8 May 2025

 

Global investment firm KKR appointed retired US Army general and former Central Intelligence Agency director David Petraeus as chairman of its Middle East operations in mid-April.

The move is indicative of the region’s importance as a destination for the firm’s future investments, and capitalises on the strength of the relationships Petraeus has forged with Gulf country leaders during his years as a top US military strategist.

KKR’s most recent commitment in the region entails acquiring a stake in UAE-based Gulf Data Hub (GDH), which operates seven data centres in the UAE and Saudi Arabia. The UAE firm plans to build additional data centre facilities in Kuwait, Qatar, Bahrain and Oman, and KKR has committed to support its $5bn expansion plan.

“[Petraeus' appointment] is a good move on their part. It reinforces the region’s growing status and importance as a data centre investment destination, due to a significant interest in artificial intelligence (AI) deployments,” says a senior executive with an international data centre operator.

KKR’s prior investments in the region include a partnership with Abu Dhabi National Oil Company (Adnoc) in 2019 to create Adnoc Oil Pipelines, and acquiring a portfolio of commercial aircraft from Abu Dhabi’s Etihad Airways in 2020.

The private equity firm’s investment in GDH, however, shows only part of the picture as far as the rapidly evolving data centre investment landscape is concerned.

In March, Abu Dhabi-based critical infrastructure-focused sovereign investor ADQ and US-headquartered power developer Energy Capital Partners agreed to establish a 50:50 partnership to build new power generation and energy infrastructure that will serve the long-term needs of data centres and industrial clusters in the US and selected other international markets.

The two firms plan to make total capital investments of more than $25bn across 25GW-worth of projects. The combined initial capital contribution from the partners is expected to amount to $5bn.

That announcement came a day after UAE National Security Adviser and Deputy Ruler of Abu Dhabi, Sheikh Tahnoon Bin Zayed Al-Nahyan, met with US President Donald Trump at the White House. During the meeting, the UAE is understood to have committed to a 10-year, $1.4tn investment framework for the US.

Tech funds

In the past 24 months, Abu Dhabi and Riyadh in particular have set up funds, sometimes in partnership with global firms, to invest in AI and data centre infrastructure, both domestically and abroad.

Abu Dhabi’s MGX aims to build $100bn in assets under management within a few years, along with US-headquartered and Blackrock-backed Global Infrastructure Partners and Microsoft, the fund's key partners. It is part of the US’ Stargate consortium, which aims to mobilise up to $500bn to build AI infrastructure in the US over the next four years.

In Riyadh, a $100bn AI initiative known as Project Transcendence is expected to invest in data centres, technology startups and other related infrastructure for the development of AI.

US-based Silver Lake announced in March 2025 that, together with MGX, it has become a minority shareholder in state-backed, Abu Dhabi-based Khazna Data Centres, one of the region’s largest data centre operators.

In 2023, Saudi sovereign wealth vehicle the Public Investment Fund (PIF) partnered with US-based DigitalBridge to develop data centres in Saudi Arabia and across the GCC states.

In early 2025, Saudi Arabia-based DataVolt – which is owned by Vision Invest, a major shareholder in Saudi utility developer Acwa Power and a public-private partnership advocate – signed a preliminary agreement to build a data centre in Neom, Saudi Arabia. The $5bn facility, with an initial phase of 300MW, is the first of many such schemes that DataVolt is planning.

Not to be outdone, the founder of Dubai-based private real estate developer Damac pledged to invest $20bn in data centre projects in several US cities earlier this year.

And there is more to the growing – if outsized – number of bidirectional data centre-focused investment flows than meets the eye.

Given the global AI race and mounting competition, investment decisions regarding data centres are moving from a simple, commercial focus to account for complex geopolitical considerations, according to Jessica Obeid, a partner at Dubai-headquartered New Energy Consult.

“As the US weaponises its technological advancements, decisions to invest in US-based data centres hedge against the risks of US export controls, positioning developers in proximity to suppliers, ensuring reliable access to components.

“Yet, this access could become costlier, driven by trade tariff wars, heightened regulations and limited access to grid infrastructure,” Obeid says.

She adds that the GCC is quickly positioning itself as a global digital hub, driven by cost-competitive energy, advanced infrastructure and strong government backing.

“Proximity to reliable power supply at an affordable cost, and speed in licensing processes and grid connections, are increasingly becoming strategic factors in data centre deployment – and the GCC offers that.”

Powering AI strategies

Almost all of the GCC states have formulated AI strategies that aim to improve operational efficiencies, create jobs and support their energy transition and net-zero initiatives.

As a result, analysts expect the region to register double-digit annual growth in data centre construction activities in the next few years.

In a recent update, global consultancy PwC projected that the Middle East data centre capacity could triple from 1GW in 2025 to 3.3GW in five years’ time.

According to data from regional projects tracker MEED Projects, as of April, an estimated $12bn-worth of data centre construction projects are in the planning stage, in addition to over $820m under bid and $7bn under construction.

Li-Chen Sim, associate fellow, at US Middle East Institute,  says that AI investments are, on the one hand, “all part of a carefully conceived strategy to … diversify out of a hydrocarbons-driven economy, to create new revenue streams from overseas data centres, build new growth sectors, support business requirements and offer more knowledge-based jobs as opposed to traditional manufacturing from domestic investments”.

On the other hand, AI investments also aim to future-proof the hydrocarbons sector, which Sim expects will continue to be a significant driver of growth, revenue and exports, even as the use of renewable power grows.

However, the ability of Gulf states to execute their plans for leveraging AI to diversify economies and create jobs –and specifically to address youth unemployment – depends on two factors, according to Obeid.

The first factor is the ability of countries to advance their AI goals from infrastructure to capital and partnerships. The second involves the speed with which they can build up adequate human capital and a skilled workforce.

“We will have to see how governments align their educational curricula with the AI policies and electricity infrastructure development,” she says.

Ecosystem investment

AI and data centre investments go beyond the facilities that house thousands of advanced graphics processing units, miles of cables and many cooling systems. To run and execute applications – particularly AI inferencing tasks – data centre facilities require a substantial amount of energy. 

Moreover, data centres in the Middle East and North Africa region face elevated environmental risks due to the high ambient temperatures, which increase energy demand for cooling, as well as water requirements.

This presents both a challenge and an opportunity, according to Obeid. "The GCC has an opportunity to advance innovation in energy and cooling technologies. Liquid cooling is necessary for AI workloads, and small modular reactors will become central in these data centres.” 

In January, Abu Dhabi’s Emirates Water & Electricity Company (Ewec) appeared to show the way with a plan to build a round-the-clock solar photovoltaic (PV) plant combined with a battery energy storage system (bess) facility.

The 5.2GW solar PV and 19 gigawatt-hour bess plant is expected to deliver renewable power as baseload, and UAE President Sheikh Mohamed Bin Zayed Bin Sultan Al-Nahyan has said that the project will help power advancements in AI and emerging technologies, and support the delivery of the UAE National AI Strategy 2031 and 2050 Net Zero initiative.

Sim agrees that renewables combined with battery storage is part of the answer when it comes to building sustainable data centres. “Globally, data centres consume about 1% of electricity, and this figure – together with carbon emissions by data centres – is expected to grow significantly.”

He notes that Goldman Sachs Research forecasts that global power demand from data centres will increase 50% by 2027, and 165% by the end of the decade, compared to 2023.

“The other part of the puzzle with regard to sustainability is water consumption by data centres, particularly those in the Gulf, where high temperatures necessitate even more cooling measures.

“Singapore, for instance, has pioneered integrated water systems that recycle treated wastewater for reuse – and this circular water model could be an option for data centres in the Gulf, instead of using expensive desalinated water,” says Sim.

As things stand, the GCC can play a key role in the advancement of these and other technologies, along with efficiency measures and the optimisation of server utilisation through AI applications such as digital twins, says Obeid.

This is just as well, since the region appears to be on the cusp of a boom in inbound and outbound investments that will build data centre capacity abroad and closer to home.

“We are at a pivotal moment for innovation, where the intersection of digital advancements and energy innovation could position the GCC as a global leader, shaping the future of sustainable digital infrastructure,” concludes Obeid.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13732105/main5907.jpg
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Qatar’s new $8bn investment spices up global LNG race

    13 March 2026

     

    In the midst of the conflict between Iran and the US and Israel, which has spilled over into the GCC region, QatarEnergy has temporarily halted production of liquefied natural gas (LNG) in the country and declared force majeure on LNG shipments after its energy assets came under attack.

    When the fog of war clears, however, and the Strait of Hormuz reopens to oil and gas flows, the global economy will look to QatarEnergy to swiftly restore regular LNG cargoes in order to bring gas prices down from record highs.

    Beyond that short-term role, the recent $8bn investment the Qatari giant has committed to building two new LNG processing trains will also cement its position as a reliable long-term supplier, while further intensifying the race among global LNG producers to carve out larger market shares in an increasingly gas-hungry world.

    North Field West – a game changer

    The state-owned company has progressed from the front-end engineering and design (feed) phase to the engineering, procurement and construction (EPC) stage of its North Field West LNG project at pace.

    It awarded the main EPC contract for the scheme – covering two LNG processing trains with a total capacity of 16 million tonnes a year (t/y) – to a joint venture comprising France’s Technip Energies, Greece/Lebanon-based Consolidated Contractors Company (CCC) and Gulf Asia Contracting on 25 February.

    The contract, estimated to be worth $8bn, was awarded just a month after Japan-based Chiyoda Corporation won the project’s feed contract.

    Such a short interval between the feed and EPC phases for a project as large as North Field West LNG would typically be considered improbable. Industry sources suggest QatarEnergy may have been in discussions with Chiyoda and the Technip Energies-CCC consortium for at least a year regarding the feed and EPC contracts, respectively – particularly given the two-year gap between the project’s announcement in February 2024 and the start of the EPC phase.

    Chiyoda, Technip Energies and CCC are also involved in the first two phases of QatarEnergy’s $40bn North Field LNG expansion project. A consortium of Chiyoda and Technip Energies is executing EPC works on the North Field East project, which involves the construction of four LNG trains with a combined capacity of 32 million t/y, following the award of a $13bn contract in February 2021. Meanwhile, a Technip Energies-CCC consortium is carrying out EPC works on two 7.8 million t/y LNG trains as part of the North Field South project, having secured a $10bn contract in May 2023.

    More significant, however, is the speed with which QatarEnergy is advancing its strategic objective of reaching a total LNG production capacity of 142 million t/y by the end of the decade, from 77.5 million t/y at present.

    With all three phases of the North Field LNG expansion programme now under EPC execution – and North Field East scheduled for commissioning later this year – QatarEnergy appears firmly on track to become one of the world’s largest LNG suppliers over the long term, reinforcing Qatar’s economic future in the process.

    US domination

    While QatarEnergy is on course to increase its LNG production capacity by 83% by 2030 through the overall North Field LNG expansion programme, it is still some way behind the US, which is set to account for over half of the total global LNG liquefaction projects by 2030.

    There are 40 new-build and expansion LNG liquefaction projects planned or under way in the US, according to UK analytics firm GlobalData. Among these, two projects stand out.

    The first is the Rio Grande LNG production project, being developed by NextDecade in Texas, on the US Gulf of Mexico coast. Up to 10 processing trains are planned for the complex, the first three of which are in the EPC phase.

    NextDecade achieved the final investment decision on the fourth and fifth trains at the facility, estimated to cost $6.7bn each, in September and October last year. The company has awarded EPC contracts to build all five trains at the Rio Grande facility to US-based Bechtel.

    On the investments front, the overseas-focused energy investment vehicle of Abu Dhabi National Oil Company (Adnoc), XRG, acquired an indirect 11.7% stake in the first phase of the project from Global Infrastructure Partners (GIP), part of US asset manager BlackRock, in September last year. In February 2026, XRG entered into another transaction with GIP to raise its overall participation in the Rio Grande LNG project by acquiring additional 7.6% equity interests in trains four and five of the scheme.

    Additionally, as part of that transaction, another Adnoc Group subsidiary, Adnoc Trading, entered into a 20-year offtake agreement with NextDecade last year to purchase 1.9 million t/y of LNG from Rio Grande train four, on a free-on-board basis at a Henry Hub-indexed price. France’s TotalEnergies and Saudi Aramco are the other LNG offtakers for train four.

    Separately, the Commonwealth LNG facility in the US state of Louisiana has also received backing from Abu Dhabi. Expected to start operations in 2030, the facility is designed to produce up to 9.5 million metric t/y of LNG.

    Commonwealth LNG is a project of US-based alternative asset manager Kimmeridge Energy Management Company and Abu Dhabi’s sovereign wealth fund Mubadala Investment Company through their joint venture Caturus.

    Caturus was formed in August 2025 when Kimmeridge announced a rebranding that saw Commonwealth LNG and Kimmeridge’s upstream operations combined under a new integrated platform. At the same time, Mubadala acquired a 24.1% equity stake in Caturus, providing financial backing for the new entity to proceed with the Commonwealth LNG project.

    Also in August, Caturus awarded Technip Energies the contract for EPC works on the Commonwealth LNG project. The French contractor had previously performed the project’s feed work.

    Moreover, Aramco subsidiary Aramco Trading signed a 20-year agreement to buy 1 million metric t/y of LNG from the Commonwealth LNG facility in February, increasing offtake deals secured by Caturus to cover 8 million metric t/y of the project’s total planned output capacity.

    Positive outlook

    The growth in LNG production capacity in the US, as well as in wider North America, is driven by several factors, including abundant natural gas reserves, the shale gas revolution and advancements in hydraulic fracturing and horizontal drilling.

    While it might be a challenge for QatarEnergy to compete with US players in combined liquefaction capacity, its strength and success will lie in clinching long-term offtake deals with customers in Asia, where the bulk of global LNG demand growth is expected.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15954252/main3511.jpg
    Indrajit Sen
  • Bahrain opens bids for first solar IPP project

    13 March 2026

    Two companies have made offers for a contract to develop Bahrain’s first solar photovoltaic (PV) independent power project (IPP).

    Bahrain’s Electricity & Water Authority (EWA) opened bids for the Bilaj Al-Jazayer solar IPP project on 12 March.

    The bidders include Saudi Arabia’s Acwa, formerly Acwa Power, and UAE-headquartered Yellow Door Energy.

    The 150 MWac Bilaj Al-Jazayer solar IPP project will be Bahrain’s first grid-connected solar PV power plant developed under a public-private partnership (PPP) framework on a build-own-operate basis. It will be delivered as a long-term concession and is intended to come online by 2027.

    The proposed site covers more than 1 square kilometre, with the private sector responsible for end-to-end development, including financing, design, construction and operation.

    Last August, EWA held a market consultation event during which it outlined plans for the country’s first solar PV IPP. The main contract was then tendered in October.

    EWA said Yellow Door Energy’s proposal was “accepted with conditions”, but did not disclose further details.

    The local KPMG Fakhro is the financial consultant, the US’ WSP Parsons Brinckerhoff is the technical consultant, and the UK’s Trowers & Hamlins is the legal consultant.

    Bahrain’s clean energy targets, as set by its national plans, include 20% renewables by 2035, and net-zero emissions by 2060.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15968088/main.jpg
    Mark Dowdall
  • DP World sees Red Sea port volumes rising as Hormuz shuts

    13 March 2026

    Register for MEED’s 14-day trial access 

    Dubai-based ports operator DP World is preparing for higher throughput at its Red Sea terminals as the Iran conflict approaches its second week, CEO Yuvraj Narayan said on Thursday.

    With the Strait of Hormuz effectively closed and tanker attacks escalating, shipping movements into Gulf ports have fallen.

    The disruption began after US and Israeli strikes on Iran, rattling energy and freight markets and cutting access through what is widely seen as the world’s most critical oil corridor.

    Since most major Gulf ports rely on the narrow Strait of Hormuz, the shutdown is weighing on regional trade flows.

    Narayan said Jebel Ali, DP World’s main hub in Dubai, has not suffered any infrastructure damage and is operating normally, but inbound vessel arrivals are down. Some cargo is still moving through terminals on the eastern side of the strait, he added.

    Ports in the UAE that sit outside Hormuz have limited headroom to absorb the shortfall. Khorfakkan can handle about 5 million 20-foot equivalent units (TEUs) and Fujairah under 1 million TEUs, which Narayan indicated would not be enough to offset lost volume from Jebel Ali or Abu Dhabi’s Khalifa Port.

    Jebel Ali alone processed 15.6 million TEUs last year, out of DP World’s 56.1 million TEUs globally.

    DP World is rolling out rerouting options and other operational measures to keep supply chains moving. Narayan said the company’s Red Sea assets, such as Jeddah in Saudi Arabia and Sokhna in Egypt, are likely to see increased traffic, though he did not quantify the additional volumes or specify cargo types.

    He cautioned that logistical and security risks remain elevated.

    Earlier this week, DP World announced record financial results for 2025, with revenue up 22% to $24.4bn and adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) up 18% to $6.4bn, delivering a 26.3% margin, as MEED reported.

    DP World said that this performance was driven by strong momentum across its ports and terminals and logistics business.

    The group’s gross throughput rose 5.8% to 93.4 million TEUs.

    Profit for the year increased 32.2% to $1.96bn, and operating cash flow grew 14% to $6.3bn.

    Return on capital employed increased to 9.9% in 2025, up from 8.9% in 2024, reflecting stronger earnings despite ongoing geopolitical and trade uncertainty.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15968045/main.jpg
    Yasir Iqbal
  • Frontrunner emerges for Saudi sewage treatment project

    13 March 2026

     

    A consortium led by China’s Jiangsu United Water Technology has emerged as the frontrunner for a contract to build and upgrade two sewage treatment plants in Saudi Arabia, according to sources.

    The contract covers the North Western A Cluster Sewage Treatment Plants Package 11 (LTOM11), part of the next phase of National Water Company’s (NWC) long-term operations and maintenance (LTOM) sewage treatment programme.

    The consortium comprising United Water, Prosus Energy (UAE) and Armada Holding (Saudi Arabia) offered “the lowest tariff” for the project, sources told MEED.

    It is understood that Turkey’s Kuzu has made the next-lowest bid.

    The development, estimated to cost about $211m, will have a combined capacity of about 440,000 cubic metres a day (cm/d).

    In February, MEED exclusively reported that six bidders were competing for the contract.

    The other companies that have submitted proposals include:

    • Alkhorayef Water & Power Technologies (Saudi Arabia)
    • Civil Works Company (Saudi Arabia)
    • VA Tech Wabag (India)
    • Aguas de Valencia (Spain)

    LTOM11, also known as the North Western A Cluster, forms part of the second phase of NWC’s rehabilitation of sewage treatment plants programme.

    The scheme is being procured on an engineering, procurement and construction (EPC) basis with a long-term operations component.

    The main contract was tendered last year, with an award initially expected by the end of 2025.

    It is now understood that NWC is preparing to offer the main contract in the second quarter.

    As previously reported, Saudi Arabia’s NWC is also evaluating five bids for package 12 of its long-term operations and maintenance (LTOM12) sewage treatment programme.

    Known as the North Western B Cluster, LTOM12 forms part of the second phase of NWC’s rehabilitation of sewage treatment plants programme.

    In January, the same United Water-led consortium won the main contract for the Northern Cluster Sewage Treatment Plants Package 10 (LTOM10).

    That project includes the rehabilitation and operation of nine sewage treatment plants located across the Hail, Qassim, Al-Jouf and Northern Borders provinces

    NWC is also preparing to tender a contract for the construction of 10 sewage treatment plants as part of package 14 of the programme.

    The final details of the Eastern A Cluster (LTOM14) package are being finalised, with a tender likely to be issued in March or April, sources told MEED.

    READ THE MARCH 2026 MEED BUSINESS REVIEW – click here to view PDF

    Riyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.

    Distributed to senior decision-makers in the region and around the world, the March 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15968035/main.jpg
    Mark Dowdall
  • Medina tenders Sikkah Al-Hadid PPP project

    13 March 2026

    Saudi entities including Al-Madinah Regional Municipality, in collaboration with the Ministry of Municipalities & Housing and the National Centre for Privatisation & PPP (NCP), have floated a request for proposal (RFP) notice for the development of the Sikkah Al-Hadid project.

    The project will be procured through build-own-operate-transfer contracts with a 50-year duration, using a public-private partnership (PPP) model.

    The deadline for bid submission is 23 June.

    The project will be located to the west of Medina on an 84,657-square-metre (sq m) site. 

    It includes a four-storey medical centre with a capacity of up to 200 beds and a shopping mall offering retail, food and beverage, and other entertainment facilities.

    In January last year, NCP asked firms to express their interest and prequalify for a contract to develop two mixed-use developments in Medina, which included the Sikkah Al-Hadid project and the Dhul Hulaifah project.

    The Dhul Hulaifah project will be built on a 30,112 sq m site located six kilometres from the Prophet’s Mosque. 

    The development will consist of a four-star hotel integrated with retail and healthcare facilities.

    MEED previously reported that Saudi Arabia had announced a P&PPP pipeline comprising 200 projects across 16 sectors.

    This pipeline aims to attract local and international investors and ensure their readiness to participate in the schemes tendered to the market.

    The initiative comes as the kingdom strives to increase the attractiveness of its economy and raise the private sector’s contribution to GDP.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15968021/main.jpg
    Yasir Iqbal