Meed | Data centres meet upbeat growth

Data centres meet upbeat growth

21 June 2024

This package also includes: Region plays high-stakes AI game

Artificial intelligence (AI) is turbo-charging data centre demand in the Middle East and North Africa (Mena) region.

This is in addition to the demand for accelerating digital capacity to accommodate Mena states’ energy and economic diversification agendas, not to mention data sovereignty regulations and widespread electronic commerce and social media use among the population.

Khazna Data Centres foresaw this trend. The UAE-headquartered company set in motion an expansion strategy four years ago when it and another data centre provider, Injazat, became part of AI firm G42 after its original owner, Mubadala Investment Company, acquired a minority stake in the AI firm.

In 2021, G42 and UAE telecom group Etisalat agreed to merge their data centres, quadrupling Khazna’s portfolio. The same year, G42 announced a plan to build data centres in Indonesia with an IT load capacity of up to 1,000MW.

In late November last year, Khazna signed a shareholders agreement for its first data centre in Egypt as part of its commitment to invest more than $250m in the North African state.

The two countries announced a plan to build data centres across Egypt with a potential combined operational capacity of 1,000MW shortly after.

This May, Khazna and the Abu Dhabi Investment Office launched the procurement process for a data centre facility in Mafraq in Abu Dhabi, which will have an initial capacity of 15MW.

Vibrant market

Khazna is not the only company looking to expand its presence in this sector. US-headquartered Amazon Web Services (AWS) plans to invest $5bn in the UAE over 15 years and $3.5bn in Saudi Arabia. This follows its initial foray into the region through a data centre in Bahrain, which was completed in 2019.

For its part, Google began operating its cloud region in Dammam, Saudi Arabia, in November 2023 and plans to build a new cloud infrastructure in Kuwait. Both Microsoft and Oracle have also pledged multibillion-dollar, multi-year investments in Saudi Arabia.

For international players, the need to be physically present in jurisdictions such as Saudi Arabia, due to data sovereignty policies, and the generally low cost of electricity are driving decisions to set up in the region.

According to US-headquartered consultancy Turner & Townsend, Saudi Arabia has 22 active colocation facilities and over 40 data centres under construction as of February 2024.

This comes less than three years after the Saudi government announced a plan to build a network of large-scale data centres that will require investments of up to $18bn by 2030.

This figure excludes the 300MW capacity that a local firm, DataVolt, aims to develop using a public-private partnership (PPP) model. Announced only this year, DataVolt’s projects are expected to require $5bn of investments.

Another Saudi company, Quantum Switch Tamasuk, plans to design and operate data centre projects with a cumulative total capacity of 300MW for the Saudi Ministry of Communications and Information Technology by 2026.

Building momentum

The focus on AI by the government sector, sovereign wealth funds and the largest state-backed companies, such as Saudi Aramco, in addition to the digital strategies launched by countries including Oman and Egypt, guarantees a growing pipeline of data centre projects.

AI is providing the momentum that previous generations of technologies, such as blockchain, cloud services and the Internet of Things, failed to deliver individually.

The growing number of subsea cable landing sites in the region also puts some GCC states in a strong position to host large-scale data centres. For example, in May last year, the world’s longest submarine communications cable system, 2 Africa, reached its first two landing sites in Jeddah and Yanbu in Saudi Arabia.

US-headquartered Equinix, which has built several data centre facilities in the UAE and Oman, envisages its first facility in Oman as a key interconnectivity point offering “ultra-low latencies” for traffic flows between Asia, Europe and Africa.

These developments present interesting and challenging opportunities for the specialised engineering, procurement and construction (EPC) and mechanical, engineering and plumbing (MEP) contractors that build data centres on behalf of their clients.

This is especially true given that the average cost per megawatt of data centre infrastructure, following a steady decline in the years leading to the Covid-19 pandemic, has taken the opposite course.

The cost is now rising within the $10m-$12m/MW band for data centres with a typical tier 3 configuration.

Saudi Arabia, for instance, has entered Turner & Townsend’s 2023 data centre cost index with an average cost of $10 a watt, “attracting investor interest as digital connectivity and investment continue to rise in support of the national building programme and gigaprojects”.

Region plays high-stakes AI game

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Jennifer Aguinaldo

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Jedco maps next phase of Jeddah airport expansion
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Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

The packages cover terminal buildings and ancillary facilities, runways, taxiways and aprons, hangars, fuel systems, airside facilities, supporting infrastructure and utility networks.

Tendering and award activity will be staggered over the next two years. Airfield rehabilitation is targeted for Q3 2026. The construction framework is scheduled for Q4 2026 and will run for five years.

The T3A package is planned for Q1 2027 and will be delivered under an early contractor involvement contract. Local contractors are encouraged to bid as part of a joint venture with an experienced international partner.

T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

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Yasir Iqbal

Contractor wins $105m Medina university hospital deal

22 September 2026

Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

The contract scope includes structural completion, remaining civil works, mechanical, electrical and plumbing installations, specialised clinical fit-outs and medical gas infrastructure to bring the long-stalled facility into operation.

Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

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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Oman tenders Thumrait Industrial City infrastructure
22 September 2026

Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

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Yasir Iqbal
Kuwait halves drilling contractor pool
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State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
- Burgan Company for Well Drilling, Trading & Maintenance (Kuwait)
- Kuwait Drilling Company (Kuwait)
- Sun Drilling Kuwait (Kuwait)
- TDL Kuwait for Oil Rigs & Natural Gas Extraction Activities, Services and Facilities (Kuwait)
- United Precision Drilling (Kuwait)
- Abraj Energy Services (Oman)
- Adnoc Drilling Company (UAE)
- Arabian Drilling Company (Saudi Arabia)
- Anton Oilfield Services (China)
- China Oilfield Services (China)
- Egyptian Drilling Company (Egypt)
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- Great Wall Drilling Company (China)
- John Energy (India)
- Kerui Oilfield Service (China)
- KCA Deutag Drilling (Germany)
- Mohammed Al-Barwani Petroleum Services (Oman)
- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

21 September 2026

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Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

This includes a 5.2GW Abu Dhabi solar and battery energy storage system (bess) round-the-clock renewable energy project, as well as three 1.5GW solar photovoltaic independent power projects (IPP): Al-Ajban, Al-Khazna and Al-Zarraf.

It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

As previously reported, it is expected that the developer's agreement for the 3.3GW Al-Nouf 1 CCGT IPP will be signed by the end of the year, while contractors are preparing to submit bids for a separate 2.6GW power plant project in Ajman.

The expansion of solar and battery storage is expected to reduce the system's reliance on gas-fired generation. However, gas-fired generation will continue to provide flexibility to support the system and balance intermittent renewable power output, according to Ewec.

The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.