Meed | Data centres churn investments

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.

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Jennifer Aguinaldo

Exclusive from Meed

Tender issued for Libyan gas project
17 September 2026
Nakheel awards $218m Dubai Islands buildings deal
17 September 2026
Aldar and Mubadala acquire Masdar City Square
17 September 2026
Dubai announces new 80km highway corridor
16 September 2026
Contractors submit Expo 2030 convention centre interest
16 September 2026

Tender issued for Libyan gas project
17 September 2026
An invitation to bid has been issued for a contract to conduct environmental assessments for the project to expand the Mellitah oil and gas complex in Libya.

The bid submission deadline is 2pm today (17 September) Libyan time.

The scope of the project includes provision of:
- An environmental baseline study (EBS)
- An environmental impact assessment (EIA)
- An environmental management plan (EMP)
The client is Mellitah Oil & Gas (MOG), which is a joint venture of Italy’s Eni and Libya’s National Oil Corporation (NOC).

MOG is based in Tripoli and operates both onshore and offshore oil and gas facilities.

The joint venture owns and operates six major oil and gas fields across the North African country.

According to the tender documents, the company that is awarded the contract will need to prepare environmental management measures in compliance with:
- Libyan environmental legislation
- Ministry of Environment requirements
- NOC environmental guidelines
- Applicable international environmental standards and best practices
The expansion of the Mellitah oil and gas complex is part of a project estimated to be worth $8bn.

The wider project is known as the Mellitah Complex Expansion & CO2 Management Integrated Development Project.

It has six main packages:
- Onshore package
- Offshore Structure A
- Offshore Structure E
- Subsea pipeline package
- Site preparation work
- Carbon capture and storage facility
Security issues and political instability have been a major problem for Libya’s oil and gas sector since the country’s civil war started in 2011.

Earlier this month, the Mellitah oil and gas complex was forced to shut down temporarily due to a protest over deteriorating public services.

The existing onshore complex includes housing, processing units, storage facilities and export facilities.

It also serves as the launch point for the Greenstream pipeline, which delivers Libyan gas directly to Italy.

The planned expansion of the complex will involve:
- Construction of a new fourth gas processing train
- Construction of a third condensate train
- Construction of a third natural gas liquids fractionation train
- Construction of a fourth sulphur recovery unit train
- Installation of a hydrogen sulphide enrichment unit
- Installation of a sulphur recovery unit
- Construction of other associated facilities
The Mellitah complex is located about 100 kilometres west of Tripoli and is a key energy facility in the west of the country.
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Wil Crisp

Nakheel awards $218m Dubai Islands buildings deal

17 September 2026

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Dubai-based developer Nakheel, now part of Dubai Holding, has awarded a main construction contract worth more than AED800m ($218m) for phases one and three of Bay Grove Residences at Dubai Islands.

The contract was awarded to the local firm Metac General Contracting Company.

It covers the construction of 537 apartments, comprising one- to four-bedroom units, across seven residential buildings.

Phase one includes 296 units in four buildings, while phase three comprises 241 units across three buildings.

The works are scheduled for completion in late 2028.

Bay Grove Residences will ultimately comprise 1,154 homes across 15 buildings. Planning is under way for the remaining 617 homes in phases two and four, with further contract awards expected.

In August last year, Nakheel awarded a AED2.6bn ($708m) contract to Abu Dhabi-based Fibrex Contracting to build the Bay Villas project at Dubai Islands. The contract includes constructing 636 villas.

In April this year, another AED527m ($143m) contract was awarded to local firm Al-Nasr Contracting Company to construct the primary infrastructure and utilities works on Island B at the development.

The Dubai Islands development consists of five islands spanning 18.6 square kilometres. It features more than 59 kilometres (km) of waterfront and 20km of beaches, as well as parks, golf courses, promenades and cycling paths.

The offshore island project gained renewed momentum in 2022, when Nakheel unveiled a new masterplan and rebranded it as Dubai Islands.

The reclaimed islands were originally part of the Palm Deira project, which was partially completed before being put on hold in 2008.

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

Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> TUNNELS: The Gulf’s next construction boom is happening underground

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

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Yasir Iqbal

Aldar and Mubadala acquire Masdar City Square
17 September 2026

Abu Dhabi-based sovereign wealth fund Mubadala Investment Company and local developer Aldar have completed the acquisition of Masdar City Square at Masdar City, in a transaction valued at AED918m ($250m).

The deal was executed through their joint venture established in 2024.

Masdar City Square comprises more than 47,000 square metres (sq m) of net leasable area across seven office buildings.

Completed in Q1 2026, the development is 99% occupied. Tenants include Taqa, the Department of Energy, Emirates College and the Mohamed Bin Zayed University of Artificial Intelligence.

The transaction expands the joint venture’s real estate portfolio in Masdar City, which is now valued at AED4.7bn ($1.3bn).

Masdar City is one of the region’s leading hubs for clean energy, artificial intelligence, advanced research and sustainable urban development.

The joint venture acquired The Link project at Masdar City for AED654m ($178m) in April.

Comprising about 32,000 sq m of net leasable area across five buildings, The Link is fully leased to a portfolio of major tenants, including Abu Dhabi Future Energy Company (Masdar) and the Mohamed Bin Zayed University of Artificial Intelligence.

The asset includes Grade A, Leed Platinum office space, a net-zero-energy headquarters building, a multi-use hall and residential accommodation, supporting its position as a high-performing, integrated component of Masdar City.

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Yasir Iqbal
Dubai announces new 80km highway corridor
16 September 2026

Dubai has approved the construction of the new fourth corridor, a major highway programme aimed at boosting inter-emirate connectivity, increasing road capacity and easing congestion.

The corridor will extend 80 kilometres, from Al-Faya Road in Abu Dhabi to Al-Shanouf Road in Sharjah.

It will include 12 lanes, 72 bridges and 17 tunnels.

The project is expected to reduce travel times by up to 60% and serve more than 3.1 million people, while providing links to Al-Maktoum International airport and Etihad Rail.

It will have the capacity to accommodate 24,000 vehicles per hour in each direction.

The project will be delivered in two phases. The first phase, running from Al-Shanouf Road to Dubai-Al Ain Road, will be delivered at a cost of AED3.5bn ($953m).

The second phase will stretch from Dubai-Al Ain Road to Al-Faya Road in Abu Dhabi.

Hamdan bin Mohammed: In line with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum to boost investment in infrastructure, I approved the New Fourth Corridor to strengthen Dubai’s road network and enhance connectivity with the UAE’s federal road network.… pic.twitter.com/zlIyY2yKBN

— Dubai Media Office (@DXBMediaOffice) September 16, 2026

The scheme adds a fourth spine to a network that has long relied on three main corridors: the E11 (Sheikh Zayed Road/Al-Ittihad Road); the E311 (Sheikh Mohamed Bin Zayed Road) and the E611 (Emirates Road), which together carry more than 850,000 vehicles commuting between Dubai and the northern emirates daily.

That concentration has made the route one of the country’s most congested, with peak-hour bottlenecks a persistent problem for residents. The new corridor is designed to divert a significant share of that traffic onto a higher-capacity route, rather than add pressure to the existing network.

The project also aligns with the Dubai 2040 Urban Master Plan, which anticipates population growth to 5.8 million by 2040 and calls for the expansion of roads, railways, airports and ports to support that growth and reinforce Dubai’s position as a global trading hub. This is reflected in the corridor’s direct links to Al-Maktoum International airport and Etihad Rail.

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Yasir Iqbal

Contractors submit Expo 2030 convention centre interest

16 September 2026

Register for MEED’s 14-day trial access

Expo 2030 Riyadh Company (ERC), responsible for delivering the Expo 2030 Riyadh venue, received contractor interest on 14 September for a contract to design and build a convention centre in the site's Collaboration District.

Construction is slated to begin in January 2027 and take 29 months. The development will cover a total gross external area of more than 28,000 square metres (sq m). The total programme area will be about 22,000 sq m and the gross floor area will be 17,000 sq m. The maximum height of the building will be 41.5 metres.

The venue will be laid out across two levels, with a mezzanine, roof terraces and a 4,030 sq m basement, in addition to mechanical, electrical and plumbing and back-of-house spaces.

Two flexible exhibition halls are planned, covering a combined 7,280 sq m, as well as 3,800 sq m of pre-function space, 650 sq m dedicated to meeting rooms and 2,200 sq m of outdoor exhibition space in the north and south plazas.

The appointed main contractor will assume responsibility for packages including the early works substructure and the lead design consultant's deliverables, while carrying out the full scope of superstructure, above-ground waterproofing, external facades, masonry, base build and specialised fit-outs for VVIP, VIP and visitor areas.

Further scope includes delivering comprehensive MEP services; vertical transportation; final infrastructure tie-points; public-realm hard and soft landscaping; testing, commissioning, handover documentation; and management of the defects liability period.

The expression of interest notice was floated on 13 September.

The unusually brief expression of interest deadline of just one day underscores a compressed procurement timeline.

This accelerated tender and evaluation schedule signals that project organisers are operating under time pressure to secure contractors and maintain the tight schedule required ahead of the event's opening.

ERC expects to award the formal contract by the end of this year and begin construction in January next year.

The project is due for completion in early 2030, in time for the main event in October of that year.

Site progress

Construction activity at the Expo site is accelerating, with Riyadh moving to award its first major vertical contracts and advancing infrastructure works across the programme.

Earlier this month, MEED exclusively reported that ERC has tendered a contract to deliver the Souq areas within the expo site.

These areas are divided into five precincts, with a total development area of about 300,000 sq m.

In September, Saudi Arabia’s Royal Commission for Riyadh City awarded a design-and-build contract for the construction of a new metro station catering to the Expo 2030 site.

In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Alyamama Company.

The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle (EV) charging.

These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners.

That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems and EV charging stations.

The masterplan covers 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

The Public Investment Fund, Saudi Arabia’s sovereign wealth vehicle, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for Expo 2030.