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”.
Exclusive from Meed
-
WEBINAR: Mena Oil & Gas Projects Market 2025-26
10 July 2025
-
-
Chinese firm wins Mid Island Parkway tunnelling deal
10 July 2025
-
Iraq tenders Baghdad airport PPP project
9 July 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
-
WEBINAR: Mena Oil & Gas Projects Market 2025-26
10 July 2025
Date & Time: Tuesday 29 July 2025 | 11:00 AM GST
Agenda:
1. Summary of the Mena oil, gas and petrochemicals projects market
2. Summary description of the main megaprojects, including project programmes
3. Analysis of active contracts and spending to date
4. Analysis of top contracts by work already awarded
5. Long-term capital expenditure outlays and forecasts
6. Highlights of key contracts to be tendered and awarded over the next 18 months
7. Top contractors and clients
8. Breakdown of spending by segment, ie, oil, gas, petrochemicals – upstream, downstream, onshore and offshore
9. Q&A session
https://image.digitalinsightresearch.in/uploads/NewsArticle/14241705/main.gif -
New Murabba signs up South Korean firm for design works
10 July 2025
Register for MEED’s 14-day trial access
Saudi Arabia’s New Murabba Development Company (NMDC) has signed a memorandum of understanding (MoU) with South Korea’s Heerim Architects & Planners to explore further design works on assets at the 14 square-kilometre New Murabba downtown project.
According to an official statement: “Heerim Architects & Planners will explore distinctive architectural plans that complement the development’s masterplan, with special focus on anchor assets, linear parks and smart city features.”
New Murabba CEO Michael Dyke signed the agreement last week during the company’s Investment and Partnership Forum in Seoul.
At the event, NMDC also signed an MoU with South Korea’s Naver Cloud Corporation to explore technological solutions for delivering the New Murabba downtown project.
According to an official statement: “The three-year agreement covers exploring innovative technology and automation to support the delivery of New Murabba, including robotics, autonomous vehicles, a smart city platform and digital solutions for monitoring construction progress.”
NMDC is in Seoul to examine technological offerings, assess financing options and showcase the investment opportunities available for the New Murabba downtown development.
The statement added that the excavation works for The Mukaab, the centrepiece of the overall development, have now been completed.
The Mukaab is a Najdi-inspired landmark that will be one of the largest buildings in the world. It will be 400 metres high, 400 metres wide and 400 metres long. Internally, it will have a tower on top of a spiral base and a structure featuring 2 million square metres (sq m) of floor space designated for hospitality. It will feature commercial spaces, cultural and tourist attractions, residential and hotel units, and recreational facilities.
Downtown destination
The New Murabba destination will have a total floor area of more than 25 million sq m and feature more than 104,000 residential units, 9,000 hotel rooms and over 980,000 sq m of retail space.
The scheme will include 1.4 million sq m of office space, 620,000 sq m of leisure facilities and 1.8 million sq m of space dedicated to community facilities.
The project will be developed around the concept of sustainability and will include green spaces and walking and cycling paths to promote active lifestyles and community activities.
The living, working and entertainment facilities will be developed within a 15-minute walking radius. The area will use an internal transport system and will be about a 20-minute drive from the airport.
The downtown area will feature a museum, a technology and design university, an immersive, multipurpose theatre, and more than 80 entertainment and cultural venues.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF
UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge
Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:
> AGENDA: UAE-Turkiye trade gains momentum> INTERVIEW 1: Building on UAE-Turkiye trade> INTERVIEW 2: Turkiye's Kalyon goes global> INTERVIEW 3: Strengthening UAE-Turkiye financial links> INTERVIEW 4: Turkish Airlines plans further growth> CURRENT AFFAIRS: Middle East tensions could reduce gas investments> GCC REAL ESTATE: Gulf real estate faces a more nuanced reality> PROJECTS MARKET: GCC projects market collapses> INTERVIEW 5: Hassan Allam eyes role in Saudi Arabia’s transformation> INTERVIEW 6: Aseer region seeks new investments for Saudi Arabia> LEADERSHIP: Nuclear power makes a global comeback> LEVANT MARKET FOCUS: Levant states wrestle regional pressures> GULF PROJECTS INDEX: Gulf projects index continues climb> CONTRACT AWARDS: Mena contract award activity remains subdued> ECONOMIC DATA: Data drives regional projects> OPINION: A farcical tragedy that no one can endTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14239016/main.jpg -
Chinese firm wins Mid Island Parkway tunnelling deal
10 July 2025
Register for MEED’s 14-day trial access
Beijing-headquartered China Railway Tunnel Engineering Group has won a $60m subcontract for the tunnelling works on package 1B of the Mid Island Parkway project in Abu Dhabi.
Package 1B entails the construction of a cut-and-cover tunnel to cross the Khor Laffan Channel, which is the area between the Saadiyat and Um-Yifeenah islands.
The tunnel, which will be between 900 metres and 1 kilometre (km) long, is being constructed on a design-and-build basis and will tie in to packages 1A and 1C.
The project is being jointly constructed by a joint venture of local firm Yas Projects (Alpha Dhabi Holding) and Beijing-based China Railway International Group.
In June last year, MEED exclusively reported that Abu Dhabi's Department of Municipality & Transport had awarded contracts for three packages for phase one of the Mid Island Parkway Project (MIPP), as part of the Plan Capital urban evolution programme.
Phase one will start at the existing Saadiyat Interchange, which will connect the E12 road to the MIPP, and will end with the recently constructed Um-Yifeenah Highway.
It comprises a dual main road with a total length of 8km, including four traffic lanes in each direction, two interchanges, a tunnel and associated infrastructure works.
MIPP phase one is further divided into packages 1A, 1B and 1C, which were awarded separately.
The project ownership has been transferred from Aldar Properties to Abu Dhaibi's Department of Municipalities & Transport.
Previously, it was transferred from Abu Dhabi General Services Company (Musanada) to Aldar Properties, and the project was included in the Abu Dhabi Investment Office's public-private partnership project pipeline.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF
UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge
Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:
> AGENDA: UAE-Turkiye trade gains momentum> INTERVIEW 1: Building on UAE-Turkiye trade> INTERVIEW 2: Turkiye's Kalyon goes global> INTERVIEW 3: Strengthening UAE-Turkiye financial links> INTERVIEW 4: Turkish Airlines plans further growth> CURRENT AFFAIRS: Middle East tensions could reduce gas investments> GCC REAL ESTATE: Gulf real estate faces a more nuanced reality> PROJECTS MARKET: GCC projects market collapses> INTERVIEW 5: Hassan Allam eyes role in Saudi Arabia’s transformation> INTERVIEW 6: Aseer region seeks new investments for Saudi Arabia> LEADERSHIP: Nuclear power makes a global comeback> LEVANT MARKET FOCUS: Levant states wrestle regional pressures> GULF PROJECTS INDEX: Gulf projects index continues climb> CONTRACT AWARDS: Mena contract award activity remains subdued> ECONOMIC DATA: Data drives regional projects> OPINION: A farcical tragedy that no one can endTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14238039/main3047.gif -
Iraq tenders Baghdad airport PPP project
9 July 2025
Register for MEED’s 14-day trial access
Iraq’s Ministry of Transport and the General Company for Airport & Air Navigation Services have released a tender inviting firms to bid for a contract to develop Baghdad International airport on a public-private partnership (PPP) basis.
The notice was issued in July, and the submission deadline is in September.
According to an official statement posted on its website, Iraq’s Ministry of Transport said that 10 out of 14 international consortiums that expressed interest in the project earlier this year have been prequalified to compete for the tender.
The scope of the estimated $400m-$600m project involves rehabilitating, expanding, financing, operating and maintaining the airport. It is the first airport PPP project to be launched in Iraq.
The initial capacity of the airport is expected to be around 9 million passengers, which will be gradually increased to 15 million passengers.
The International Finance Corporation (IFC), a member of the World Bank Group, is the project’s lead transaction adviser.
Iraq is already developing the Baghdad and Najaf-Karbala metro projects using a similar PPP model.
Earlier this month, MEED reported that Iraq intends to retender the contract to develop and operate the Baghdad Metro project, following the award of the estimated $2.5bn contract last year.
According to local media reports, Nasser Al-Assadi, adviser to Prime Minister Mohammed Sudani, stated that the previous developers had overestimated the project budget; therefore, the government will relaunch the entire process to implement the project.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14229008/main.jpg -
Contractors prepare revised bids for Roshn stadium
9 July 2025
Register for MEED’s 14-day trial access
Saudi gigaproject developer Roshn has invited firms to submit revised commercial proposals by 24 July for a contract to build a new stadium adjacent to the National Guard facilities to the southwest of Riyadh.
Known as the National Guard Stadium, it will be delivered on an early contractor involvement (ECI) basis. It will cover an area of over 450,000 square metres and be able to accommodate 46,000 spectators.
The scope of work also covers the construction of auxiliary facilities, including training academy offices and two hotels, as well as retail and food and beverage outlets.
The firms had initially submitted bids on 8 April for the contract.
The stadium is scheduled to host 32 Fifa World Cup tournament games in 2034.
In August last year, MEED reported that Saudi Arabia plans to build 11 new stadiums as part of its bid to host the 2034 Fifa World Cup.
Eight stadiums will be located in Riyadh, four in Jeddah and one each in Al-Khobar, Abha and Neom.
The proposal outlines an additional 10 cities that will host training bases. These are Al-Baha, Jazan, Taif, Medina, Al-Ula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.
The bid proposes 134 training sites across the kingdom, including 61 existing facilities and 73 new training venues.
The kingdom was officially selected to host the 2034 Fifa World Cup through an online convention of Fifa member associations at the Fifa congress on 11 December 2024.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14228507/main.jpg