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.
Exclusive from Meed
-
UAE growth exceeds predictions28 October 2025
-
Iraq leads non-GCC project finance activity28 October 2025
-
Aldar announces new asset development plan28 October 2025
-
Petrofac collapse could impact $5.83bn of Mena projects28 October 2025
-
Petrofac files for administration28 October 2025
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
UAE growth exceeds predictions28 October 2025

MEED’s November 2025 report on the UAE includes:
> COMMENT: Investment shapes UAE growth story
> GOVERNMENT: Public spending ties the UAE closer together
> ECONOMY: UAE growth expansion beats expectations
> BANKING: Stability is the watchword for UAE lenders
> OIL & GAS: Adnoc strives to build long-term upstream potential
> PETROCHEMICALS: Taziz fulfils Abu Dhabi’s chemical ambitions at pace
> POWER: UAE power sector hits record $8.9bn in contracts
> WATER: Tunnel projects set pace for UAE water sector
> CONSTRUCTION: UAE construction faces delivery pressures
> TRANSPORT: $70bn infrastructure schemes underpin UAE economic expansionTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14963005/main.gif -
Iraq leads non-GCC project finance activity28 October 2025
This package also includes: Region sees evolving project finance demand

Iraq’s first airport public-private partnership (PPP) project is making steady progress, with bids submitted for the contract to redevelop the country’s main aviation hub, Baghdad International airport.
The project, which could cost up to $600m, involves rehabilitating, expanding, financing, operating and maintaining the airport and increasing its capacity to around 15 million passengers a year. It is emblematic of Iraq’s growing position in the PPP market in the wider Middle East and North Africa (Mena) region outside of the GCC, where the country now outpaces the likes of Egypt and Morocco.
Iraq’s Transport Ministry and General Company for Airport & Air Navigation Services released a tender for the airport project in July. In early October, bids were submitted for the scheme by three international consortiums.
The bidders were a UK/Turkish group of ERG International, Terminal Yapi and ERG Insaat; a Luxembourg/Iraq pairing of Corporacion America Airports and Amwaj International; and a larger consortium of five companies drawn from Saudi Arabia, Turkiye and Ireland, made up of Asyad Holding, Top International Engineering Corporation, Lamar Holding, YDA Insaat and Dublin Airport Authority.
The International Finance Corporation (IFC), part of the World Bank Group, signed an agreement with the Iraqi government in September 2023 to be the lead transaction adviser on the project – in what was its first PPP mandate in Iraq.
Prominent sectors and frameworks
Transport is one of the key sectors for project finance outside of the busy markets of the GCC, with $69bn-worth of schemes planned or under way across the 11 other countries of the region, according to regional project tracker MEED Projects.
The only sector that sees more activity is power, with $120bn-worth of projects in total. Between them, the wider region’s power and transport sectors account for more than half of the total market of $332bn of projects and more than 60% of the schemes by number.A few other areas have also been seeing significant amounts of activity, including the oil and gas sector with $57bn; chemicals projects, valued at $39bn; and construction, at $33bn. Most schemes are still in the planning rather than the execution phase, however, with around $118bn-worth of projects currently being built, or 36% of the total.
In geographic terms, Iraq is the most active market, with $117bn-worth of project finance schemes in the works. It is followed by Egypt with $79bn, Morocco with $39bn and Iran with $38bn.
Almost all countries have developed a project finance market of some description, although in the war-ravaged countries of Syria, Libya and Yemen the amount of activity is very limited.
By far the most popular model for project finance deals in the region is build-operate- transfer (BOT) contracts, which account for $182bn-worth of all project finance activity under way or planned, equivalent to 55% of the total.
BOT contracts are particularly prevalent in the power sector, with $65bn of deals, but they are also the most popular option in the chemicals, construction, transport and water sectors. In the oil sector, there is a slight preference for build-own-operate-transfer (BOOT) models over BOT contracts, although the latter are also widely used.
Project finance trends
There has been something of a slowdown in PPP activity in 2025 across the Mena region, excluding the GCC states – at least in valuation terms.
There was a particularly strong market performance in 2024, when more than $39bn-worth of schemes using project finance were awarded.
In contrast, $19.2bn-worth of awards are expected to have been made by the end of December this year – down on 2024, but still well ahead of the figures for the years prior to that.
By other measures, activity is picking up, however. In 2025, the number of PPP contract awards is expected to rise to 32 by the end of the year. This compares to 18 contracts in 2024, which was itself twice as many as the year before.
Seven of the awards in 2025 are worth $1bn or more, for projects in Egypt, Iraq, Jordan and Morocco.
The largest is the $3.5bn Aqaba-Amman Water Desalination and Conveyance project, the main contract for which was awarded to a joint venture of Orascom Construction and Vinci in January. It is due to be completed by 2029.
In the same market, the $1bn Al-Shidiya to Aqaba phosphate railway line is due to be awarded in December by National Infrastructure Construction Company, a subsidiary of the UAE’s Etihad Rail.
The Iraqi projects include the $2bn, 1GW solar independent power project (IPP) in Najaf that is being developed by Saudi Arabia’s Acwa Power; and the $1.5bn first phase of the Najaf-Karbala metro, which has yet to be awarded.
Egypt’s leading PPP project this year is the $1.5bn, 1.1GW Suez wind farm IPP, which was awarded in January to Power China. Further west, two large renewable power plants are the biggest PPP contracts in Morocco, with phases two and three of the Noor Midelt solar complex. Each phase comprises a 400MW solar power plant and a battery energy storage system, and each is valued at an estimated $1bn, with Acwa Power undertaking both projects.
None of these are on the scale of the largest PPP projects awarded last year, however, which was led by the $14bn Southern Refineries Company’s Al-Faw Investment Refinery project in Iraq.
Indeed, the six largest projects awarded in the non-GCC markets last year were all in Iraq. The country’s reliable tendering of clearly bankable projects as it steadily rebuild its infrastructure after decades of violence and economic stagnation is a success story to watch – and for many countries, one to emulate.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14962656/main.gif -
Aldar announces new asset development plan28 October 2025
Abu Dhabi-based real estate developer Aldar Properties has announced a series of major projects across the residential, commercial and logistics sectors in Abu Dhabi, with a combined gross development value of AED3.8bn ($1bn).
In an official statement, Aldar said it will develop a new residential community in Alreeman, offering more than 2,000 rental units in the Al-Shamkha area.
Aldar will deliver 665 residential units to the rental market on Yas Island. The new developments include a gated community offering 217 units.
Aldar will also develop 448 new apartments on the island as an extension to Yas Residential Village.
On the commercial front, Aldar said it will focus on developing office space in key business districts across the UAE to meet demand for Grade A office space.
In Abu Dhabi, Aldar is currently developing Yas Business Park, an office development comprising four towers that will offer 47,500 square metres (sq m) of leasable space. The project is slated for completion in 2027.
In the logistics sector, Aldar said it is developing high-quality warehousing and distribution space across the UAE. Aldar added that it will expand the Abu Dhabi Business Hub by adding 175,000 sq m of gross floor area to the Musaffah site.
Aldar will also deliver Abu Dhabi’s first Tesla Experience Centre on Yas Island. The facility will span 5,000 sq m and will include a showroom, service centre and delivery operations.
“Upon completion, the new residential, commercial and logistics assets will become part of Aldar Investment’s portfolio, which comprises income-generating real estate valued at AED47bn,” Aldar said in its statement.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14960800/main.gif -
Petrofac collapse could impact $5.83bn of Mena projects28 October 2025

On 27 October, Petrofac announced that it had applied to appoint administrators, a move that has potentially put thousands of jobs at risk and increased uncertainty for projects worth billions of dollars in the Middle East and North Africa (Mena) region.
The total value of projects awarded to Petrofac and under construction in the region is $5.83bn, according to information recorded by the regional project-tracking service MEED Projects.
Petrofac also has bids under evaluation for 15 projects in the region worth a total of $19.28bn, according to MEED Projects data.
Over recent years, Petrofac has aggressively sought to win new contracts in the Mena region, bidding on a range of projects in an effort to improve its financial situation.
Some of the tender processes in which Petrofac is currently participating could ultimately be disrupted due to the company’s financial problems, especially when there is only one other bidder for the contract.
Regional impact
The UAE is potentially the most exposed to disruption from Petrofac filing for administration. It is executing major projects worth $2.87bn in the UAE.
Algeria is second in the region in terms of exposure to contracts under execution, with $1.8bn in projects.
Petrofac also has projects in Oman, Bahrain and Iraq, worth $483m, $353m and $320m, respectively.
UAE projects under execution
In the UAE, Petrofac has five active projects, all awarded by Abu Dhabi’s state-owned Adnoc Gas.
The biggest of these is a $1.2bn project for the planned Das Island gas liquefaction facility, which was awarded in June this year and expected to be completed by the fourth quarter of 2027.
The second-biggest contract that Petrofac has in the UAE is a $700m contract as part of Adnoc Gas’ project to upgrade its sales gas pipeline network across the UAE.
The scope of the package is focused on developing a new compressor plant at the Habshan gas compressor facility.
This contract was awarded in June 2023 and was previously expected to be completed before the end of next year.
The other significant contracts that Petrofac has in the UAE include a $615m contract for a carbon capture, utilisation and storage (CCUS) facility at the Habshan site, as well as a $335m contract to upgrade the Habshan gas processing complex.
Adnoc Gas awarded the CCUS contract in October 2023, and the upgrade contract was awarded in January this year.
In addition to the projects Petrofac has won in the UAE, it has bids currently under evaluation worth $6.6bn in the country.
Petrofac in Algeria
Petrofac’s largest ongoing project in the Mena region is the $1.5bn project that it is executing to develop a major petrochemicals project in Algeria.
The Scotland-based company is executing the project in partnership with China Huanqiu Contracting & Engineering Corporation (HQCEC) in Algeria’s Arzew region.
Petrofac and HQCEC signed the engineering, procurement and construction (EPC) contract for the Algerian petrochemicals project in June 2023.
HQCEC is a subsidiary of China National Petroleum Corporation.
In July 2024, MEED reported that concerns about the project’s future were increasing due to Petrofac’s financial difficulties.
The project is being developed in the Arzew Industrial Zone, west of Algiers, and the contract was signed with STEP Polymers, a wholly owned subsidiary of Algeria’s national oil company, Sonatrach.
When the contract was signed, Petrofac said that its portion of the project was valued at about $1bn.
The project’s scope includes the design and construction of two major integrated processing units.
It includes the delivery of a new propane dehydrogenation unit and polypropylene production unit, as well as associated utilities and infrastructure for the site.
It is expected to produce 550,000 tonnes of polypropylene a year.
Petrofac has been active in Algeria since 1997, when it opened its first office in Algiers. The company has since developed some of the country’s most significant oil and gas assets.
On top of the projects under execution in Algeria, Petrofac has bids under evaluation for projects worth $7.19bn in the country.
Petrofac in Oman, Bahrain and Iraq
Petrofac is working on a range of strategic upstream projects across Oman, Bahrain and Iraq.
These contracts include a $370m project to expand the central processing facility (CPF) at Iraq’s Majnoon field.
In August this year, MEED reported that Petrofac was pushing to complete the project contract.
The EPC contract for the project was awarded to Petrofac by Basra Oil Company (BOC) in 2018.
Originally, the contract had a 34-month time period, but, like many other projects awarded at a similar time, the project was delayed due to complications related to the Covid-19 pandemic.
In August, MEED reported that the final part of the project that needed to be addressed was an issue relating to a single unit of the expansion project.
The oil processing trains were mechanically complete in October 2022 and were ready for startup in late 2023.
The facility then started operating in 2024. However, due to issues related to product specifications, it was taken offline.
Majnoon is Iraq’s fourth-biggest oil field and is estimated to contain 12.6 billion barrels of oil.
Petrofac does not currently have any bids under evaluation in Iraq or Oman, but it has submitted bids for projects worth $900m in Bahrain.
Over recent years, Petrofac has been attempting to expand in Kuwait, Saudi Arabia and Libya.
In these countries, it currently has bids under evaluation for projects worth a total of $4.63bn.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14960597/main5727.gif -
Petrofac files for administration28 October 2025
The UK-based engineering company Petrofac, which is active across much of the Middle East and North Africa (Mena) region, has filed for administration amid escalating financial challenges.
In a statement, the company said that its directors had “applied to the High Court of England and Wales to appoint administrators”.
The statement added: “This is a targeted administration of the group’s ultimate holding company only.”
Petrofac is actively working on projects in the UAE, Algeria, Kuwait and Bahrain. Projects in the UAE include an engineering, procurement and construction management contract awarded by Adnoc Gas in June.
The company’s collapse followed the termination of an offshore electricity transmission contract by Netherlands-based TenneT, derailing a restructuring plan.
The group’s operations will continue to trade, and options for alternative restructuring, as well as potential solutions such as mergers or acquisitions, are being explored, the company said.
It added: “When appointed, administrators will work alongside executive management to preserve value, operational capability and ongoing delivery across the group’s operating and trading entities.”
Petrofac has suffered from high debt levels for several years and was negatively impacted by shutdowns during the Covid-19 pandemic.
Its financial problems led to the suspension of its shares from the London Stock Exchange in May.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14960595/main.jpg
Region sees evolving project finance demand