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
  • Riyadh seeks contractors for Expo 2030 buildings

    24 February 2026

     

    Saudi Arabia’s Expo 2030 Riyadh Company (ERC), tasked with delivering the Expo 2030 Riyadh venue, has invited contractors to express their interest in a contract to deliver the first set of buildings at the site.

    The structures include several exhibition assets, an auditorium, food and beverage spaces, retail and other associated facilities.

    The buildings will be located on the main boulevard.

    Firms have been allowed until 26 February to express their interest in the contract.

    Tendering activity is gathering pace for several other packages that are part of the Expo 2030 masterplan. Earlier this month, MEED exclusively reported that ERC had tendered a contract for the construction of site offices required for the initial construction works.

    This followed the Royal Commission for Riyadh City issuing a design-and-build tender on 5 February for the construction of a new metro station serving the Expo 2030 site.

    The station will be located on Line 4 (Yellow Line) of the Riyadh Metro network.

    Construction work on the Expo 2030 Riyadh site is progressing at an accelerated pace. In January, ERC awarded an estimated SR1bn ($267m) contract to deliver the initial infrastructure works at the site.

    The contract was awarded to local firm Nesma & Partners.

    The scope of work covers about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communication systems, and electric vehicle charging stations.

    Contractors are also bidding for infrastructure lots two and three. In December, MEED reported that ERC had floated another tender for the project’s initial infrastructure works.

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

    Countries participating in Expo 2030 Riyadh will have the option to construct permanent pavilions. This initiative is expected to create opportunities for business and investment growth in the region.

    The expo is forecast to attract more than 40 million visitors.

    In a statement, Saudi sovereign wealth vehicle the Public Investment Fund said: “During its construction phases, Expo 2030 Riyadh and its legacy are projected to contribute around $64bn to Saudi GDP and generate approximately 171,000 direct and indirect jobs. Once operational, it is expected to contribute approximately $5.6bn to GDP.”

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15741954/main.jpg
    Yasir Iqbal
  • Kuwait considers cancelling $988m upstream tender

    24 February 2026

     

    State-owned Kuwait Petroleum Corporation (KPC) is discussing the potential cancellation of a contract worth nearly $1bn, according to industry sources.

    The contract is focused on developing Jurassic Light Oil (JLO) export facilities and upgrading the existing export network.

    India’s Larson & Toubro submitted a low bid of $988m for the contract in October last year.

    The two bids submitted for the contract were:

    • Larsen & Toubro (India): KD303.5m ($988m)
    • Petrofac (UK): KD310.6m ($1.01bn)

    The project was originally tendered in November 2024, with a bid deadline of 1 December the same year.

    The bid deadline was extended several times before bids were ultimately submitted.

    The client on the project is the state-owned upstream operator Kuwait Oil Company (KOC).

    One source said: “KOC has decided to let KPC take the decision, as it was launched as a KPC initiative project in 2019.

    “The KOC committee is waiting for KPC to schedule the meeting.”

    Another source said: “Everyone knows that this project is at risk of cancellation as the bids came in extremely high compared to the budget.

    “They came in at more than double the project’s proposed budget.”

    The latest discussions around the potential cancellation of the JLO contract come after four upstream contracts worth a total of $7.73bn were cancelled in January.

    The cancelled contracts were:

    • Separation Gathering Centre (SGC) 1 and Water Injection Plant (WIP) 1
      Low bidder: Tecnicas Reunidas (Spain) – $2.47bn
       
    • SGC 3 and WIP 3
      Low bidder: Larsen & Toubro (India) – $2.48bn
       
    • Effluent Water Disposal Plants (EWDP) 1 & 2 expansion project
      Low bidder: Larsen & Toubro (India) – $1.30bn
       
    • Installation of WIP 4
      Low bidder: Petrofac (UK) – $1.48bn

    All of the projects received low bids that exceeded their allotted budgets.

    In 2025, Kuwait recorded its highest total annual value for oil, gas and chemicals contract awards since 2017, according to data from regional project tracker MEED Projects.

    A total of 19 contract awards with a combined value of $1.9bn were awarded last year.

    This was more than four times the value of contract awards in the same sectors in 2024, when awards totalled just $436m.

    It was also above the $1.7bn peak recorded in 2021, but it remained well below the contract award values seen in 2014-17, when several large-scale, multibillion-dollar projects were awarded in the country.

    The surge in the value of contract awards in 2025 came after Kuwait’s emir indefinitely dissolved parliament and suspended some of the country’s constitutional articles in May 2024.

    Prior to the suspension of parliament, Kuwait suffered from very low levels of project awards for several years amid political gridlock and infighting between the cabinet and parliament.

    This meant that important decisions about projects could not be made, something that was seen as a major obstacle for the progression of strategic oil projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15721142/main.png
    Wil Crisp
  • Contractors express interest in Bab gas cap main plant

    23 February 2026

     

    Contractors have expressed interest to Adnoc Gas in participating in the main tendering exercise for a project involving the development of infrastructure to process incremental gas output arising from the unlocking of gas caps at the Bab onshore hydrocarbons development in Abu Dhabi.

    As part of its 2030 upstream production increase goals, Abu Dhabi National Oil Company (Adnoc Group) is working to extract gas from four underdeveloped gas cap reservoirs at the Bab onshore field development – Thammama A, Thammama B, Thammama F and Thammama H. While the Thammama A, B and H reservoirs are estimated to collectively produce 1.45 billion cubic feet a day (cf/d) of gas, output from the Thammama F gas cap is expected to be at a rate of 396 million cf/d.

    Existing trains at the Habshan processing complex in Abu Dhabi will be unable to handle the new gas volumes. Therefore, Adnoc Gas needs to build new facilities to process an additional volume of up to 1.85 billion cf/d of raw gas when its parent company starts production from the Bab gas caps.

    To this end, Adnoc Gas is planning to build a gas processing plant in the Bab area, about 170 kilometres from Abu Dhabi, along with associated pipeline networks and other ancillary units, as part of the broader Bab gas cap development project. It has divided the engineering, procurement and construction (EPC) scope of work on the project into four packages:

    • EPC package 1 – Main Bab gas cap plant
    • EPC package 2 – Early civil works
    • EPC package 3 – Pipelines
    • EPC package 4 – Non-process area works

    Abu Dhabi Securities Exchange-listed Adnoc Gas issued an expressions of interest (EoI) document to contractors for the main EPC tendering process for the main Bab gas cap plant on 10 February, setting an initial deadline of 17 February for submission of EoI responses, MEED recently reported.

    Adnoc Gas then extended the deadline for the submission of responses until 20 February, with contractors complying by that date, according to sources.

    The other three packages remain in the EoI and the main contract tendering stages, the sources said.

    Prior to issuing the EoIs for the Bab gas cap development project packages, Adnoc Gas completed an early engagement process with contractors in September and October last year, as MEED previously reported.

    In December last year, Adnoc Gas awarded the front-end engineering and design (feed) works for the Bab gas cap development project, which will increase its gas processing capacity by about 20%, to Australia-based consultancy Worley. The feed contract has a duration of more than 1.2 million man-hours, making it the largest-ever engineering job awarded by Adnoc Gas.

    Adnoc Gas currently has a capital expenditure (capex) commitment of $20bn for the 2023-29 period, which is on course to increase to about $28bn as the company strives to achieve financial investment decision (FID) on the second and third phases of its rich gas development programme in the first quarter of 2026.

    The second and third phases involve building a natural gas liquids fractionation train at the Ruwais gas processing facility and a new gas processing train at the Habshan complex, respectively, Peter Van Driel, the company’s chief financial officer, said recently on a call with journalists.

    Adnoc Gas’ capex commitment could exceed $30bn when the company is able to achieve FID on the Bab gas cap development project, which is currently expected to happen later this year, Van Driel further said.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15717536/main3120.jpg
    Indrajit Sen
  • Arada awards $408m W Residences Dubai Harbour contract

    23 February 2026

    Register for MEED’s 14-day trial access 

    Sharjah-based real estate developer Arada has awarded a AED1.5bn ($408m) contract for the main construction works on its W Residences project at Dubai Harbour.

    The contract was awarded to the local Engineering Contracting Company.

    The development comprises 490 branded residences across three towers.

    The project's enabling works, including excavation and piling, have begun and are being carried out by another local firm, APCC Piling & Marine Contracting.

     Arada has awarded APCC a separate AED51m ($14m) contract to undertake the enabling works.

    The development will consist of residential, retail and leisure facilities and will be operated by US-based Marriott International.

    Arada launched the project in October 2024, as MEED reported.

    The latest contract award follows Arada's award of two contracts, worth AED2.7bn ($735m), for construction work on all four phases of the Masaar 2 residential community in the Rowdat district of Sharjah.

    Arada awarded Sharjah-based Intermass Contracting a contract for the construction of phases one, three and four.

    Abu Dhabi-based contractor Pivot Engineering & General Contracting won a contract to build the second phase of the project.

    The overall scheme encompasses the construction of 1,997 residential units across all four phases.

    Construction is expected to begin shortly, and the project is slated for completion by 2028.

    Arada is the developer behind three masterplanned residential communities in Sharjah. The Aljada, Masaar and Nasma Residences communities are valued at a combined AED33bn.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15717440/main.jpg
    Yasir Iqbal
  • Local contractor selected for Kuwait water project

    23 February 2026

     

    Local firm United Gulf Construction has been selected for a contract to upgrade the Hawally water distribution complex in Kuwait's Hawalli Governorate.

    The Ministry of Electricity, Water & Renewable Energy (MEWRE) has requested approval from the Central Agency for Public Tenders (Capt) to award the contract to the lowest bidder.

    The request was made at a meeting on 11 February, following completion of the project’s preliminary budget.

    According to regional project tracker MEED Projects, United Gulf Construction submitted the lowest of three bids for the contract in March 2025.

    These were:

    • United Gulf Construction – $137m
    • Khalid Ali Al-Kharafi & Brothers – $147m
    • Alghanim International General Trading & Contracting – $219m

    The project involves development of the existing water distribution complex in Hawalli. Works include construction of distribution facilities, valve chambers, thrust blocks, manholes and associated infrastructure.

    The scheme is intended to increase freshwater storage capacity by 66 million gallons a day. It will also raise potable water pumping capacity to 54.5 million gallons a day and brackish water pumping to 23.5 million gallons a day.

    The Hawally complex serves one of Kuwait’s most densely populated governorates. The upgrade is expected to address chronic low water pressure, particularly during peak summer demand, and ensure continuous supply.

    At the recent meeting, the MEWRE provided the required approval letter from the Finance Ministry, which is a legal prerequisite for tender decisions.

    Capt’s board instructed the MEWRE to select the lowest bidder and submit a final recommendation within 10 working days.

    Construction on the project is expected to start in September 2026 and take about two years to complete.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15717372/main.jpg
    Mark Dowdall