meed-logo

line1 line2 line3
SIGN IN / REGISTER

Diriyah CEO sets the record straight

17 February 2025

 

Register for MEED’s 14-day trial access | Beat the queue for the Saudi Gigaprojects 2025 summit (12-14 May)

There can be few busier people in Saudi construction right now than Jerry Inzerillo, group CEO of Diriyah Company, the developer behind the $63.2bn Diriyah gigaproject.

A charismatic New Yorker with the distinctive accent to match, he has been the most visible persona behind what is arguably one of the most impressive and advanced projects of the kingdom’s $1tn capital expenditure drive. 

Centred around the At-Turaif Unesco World Heritage Site on the western outskirts of Riyadh, Diriyah has opened its first assets to the public, most notably the retail-focused Bujairi Terrace and its first hotel, the Luxury Collection Bab Samhan Hotel.

These are already proving popular; even on a weekday lunchtime, the former was packed with Saudis enjoying a meal or simply walking between the rows of upscale boutiques enveloped in Diriyah’s characteristic Najdi architectural style. 

At night, Bujairi Terrace is so busy that advanced tickets are required just to enter the precinct to avoid overcrowding.


Opened in December 2022, Diriyah's Bujairi Terrace offers an array of restaurants and cafes

Asset manager role

Managing this is a new challenge for Diriyah Company as it transitions from a developer primarily focused on infrastructure delivery to one that is now also operating as an asset manager for its completed elements. 

“Think about it: right now in the day, we have 40,000 construction workers on site, but last night, we had 13,000 people visiting At-Turaif,” Inzerillo said in early January.

“We’re trading; we’re open; we’re earning revenues from Bab Samhan, the first of 40 hotels to open. It’s already trading very, very well – it’s going to be a very popular hotel.

“I’ve been here 6.5 years now and I’m more optimistic than I’ve ever been.”

Visitors are not just there to shop and eat. Diriyah’s protocol department now has more than 20 staff to handle between nine and 15 protocol moments a day.

“Heads of state, cabinet members and prominent CEOs come every day to see His Royal Highness [Crown Prince Mohammed Bin Salman]. They view the masterplans, see it being built and then have a meal before going to the Unesco site,” says Inzerillo.

I’m seeing robust interest and activity now, not just kicking the tyres as we say in New York. I’m seeing people really coming up to us now. We have dozens of deals right now. We’re very far down the road in terms of equity
Jerry Inzerillo, group CEO of Diriyah Company 

Concrete proof of delivery

The Diriyah CEO spoke with MEED at the opening of two new $200m substations built by Saudi Electricity Company to serve the gigaproject specifically. His presence at the event was a reminder of how keen Diriyah Company is to tell the world – and potential investors – about the development’s progress.

It is no secret that the gigaprojects programme has failed to attract the amount of local or foreign sector investment that it may have initially expected. Opinions vary, but it is fair to say a lack of clarity on project scopes, timeframes and visions, combined with the Covid pandemic and missteps in the initial communication strategy on what the gigaprojects stood for, have all been stumbling blocks in drawing in private investment.

However, this is changing as the gigaprojects themselves start to be delivered and more concrete proof of their demand potential is made clear.

Not that Inzerillo has any doubts about their ultimate investment potential and successful delivery. When asked about these issues, his response was clear: “Look I think there are two factors [behind these issues] and I don’t see them as unhealthy. In fact, it’s the opposite – I see them as healthy,” he asserts.

“Our [Saudi Arabia’s] intention was to take tourism from 3% of GDP to 10% by 2030, while our target was to attract 100 million visits by the same date. We achieved this by December 2023. We’ve already broken 5% of GDP and we feel very confident that we’ll make the 10% objective.

“We’re now putting the infrastructure in the new 58 million square-metre King Salman International airport and other transport infrastructure around the country. All the gigaprojects are opening hotels; for example, look at the great work being done along the Red Sea coast; the great work being done now on Qiddiya.

“So, I think what happened was a lot of people said, ‘Ok, we believe in Saudi Arabia. We certainly believe in its vision. But you know what? We’re going to wait a year or two till we see evidence that the projects are progressing as projected. We intend to be in the kingdom a long time, so let’s wait a year or two before committing.’”

JOIN THE LEADERS BUILDING VISION 2030 AT THE 3RD EDITION OF MEED's SAUDI GIGAPROJECTS SUMMIT
12-14 May – Riyadh, Saudi Arabia
CLICK HERE TO REGISTER YOUR INTEREST

Optimistic outlook

Inzerillo highlights Covid’s impact on the investment environment, adding that it delayed investment plans by two years, but appetite has now caught up.

“I’m seeing robust interest and activity now, not just kicking the tyres as we say in New York,” he states. “I’m seeing people really coming up to us now. We have dozens of deals right now. We’re very far down the road in terms of equity.

“I’m feeling very, very optimistic. I mean, you would think the CEO would naturally be optimistic, but I’m seeing a lot of evidence now.”

This bullishness is underpinned by three huge contracts awarded last year, totalling more than $5.6bn to build the North Cultural and Qurain Avenue districts, forming core components of the Diriyah Gate (DG) 1 phase of the gigaproject, as well as hotel and leisure assets on its residential and hospitality-focused Wadi Safar district.

The pace of activity is continuing into 2025 with a number of major contracts under tender or bid evaluation on the DG2 second phase, including three interchanges on King Khalid Road, the King Salman Grand Mosque, Royal Diriyah Opera House, infrastructure development works, the Northern Community and Diriyah Arena assets. 

Just as significant was the award in early January of a $114m contract covering architectural construction and design services for DG2’s Boulevard District. One of the centrepieces of this second phase, the boulevard will be almost two kilometres long and will be lined on both sides by luxury boutiques and restaurants. Construction work on the boulevard should start in 2026.


One of the largest palaces in Diriyah, Salwa Palace extends over an area of 10,000 square metres

On time, on budget

Maintaining this pace of procurement is important given some of the – often negative – headlines following the ‘pause’ in gigaproject spending in the first half of 2024 as the government and the gigaproject companies’ owner, the Public Investment Fund (PIF), assessed their priorities and expenditure allocations in the face of soaring costs and timelines that threatened to be missed.

While much of this attention has been on Neom, particularly its The Line component, other gigaprojects such as The Red Sea, Roshn and Qiddiya threaten to be put into the same basket, an argument Inzerillo is keen to set straight.

“Now, one has to deal with real economic facts, and that is that post-Covid, you had major supply chain issues, which caused this hyperinflation. We’ve taken that into consideration and made adjustments. We’re on time, we’re on budget,” he stresses. 

“We’ve been very fortunate because of our track record. We have a rockstar team. None of our funding has been even touched in the slightest by the PIF.”

Diriyah has had success in mitigating soaring materials and contracting costs primarily by bundling different works packages into the three ‘mega’ contracts awarded in 2024 as a means of consolidating work to just a handful of contractors. 

At the same time, it secured long-term supply agreements from local manufacturers for key materials such as windows, doors and concrete. Scope revisions, such as the incorporation of the originally planned DG3 residential district into the DG1 element, have also contributed to putting a lid on cost pressures. 

“We always said we had five gigaprojects,” explains Inzerillo. “We had the DG1 historical district. We had DG2, which is 500 tech companies, 100 media companies and 50 entertainment companies. And then there was talk about DG3. When we revisited DG3, it really was just an extension of DG1. So now what we’ve done is [merged] what was called DG3 into DG1. In other words, we merged two phases into one family, but the investment remains the same.”

Reprioritisation of resources

As for last year’s re-evaluation of the gigaprojects’ priorities and delays to the programme overall, Inzerillo attributes these to unforeseen events.

“Now, here’s the other point about the reprioritisation,” he says, referring to last year’s slowdown in gigaproject activity. “Three years ago, no one had any definitive evidence that Saudi Arabia would win the 2027 Asian football games. Three years ago, no one knew that we would be able to win the Winter Asian Games. Three years ago, no one knew we would win the 2030 World Expo in Riyadh. And three years ago, no one predicted the Kingdom of Saudi Arabia would win the 2034 World Cup.

“So, what would need to happen to do those four global events? The answer is, of course, it requires a reprioritisation of resources because now there’s a giant emphasis on delivering these events, especially in Riyadh …. It’s a natural recalibration to host these global events to diversify the economy and certainly hyper stimulate tourism.”


The PIF is expected to provide another SR12bn this year for further development at the gigaproject

Investor interest

Inzerillo, who started his varied, five-decade career in the kitchens of a Brooklyn catering company and then onto senior hotel management positions in the US and South Africa before heading up both IMG Artists and the Forbes Travel Guide, is equally forthright about Diriyah’s investment potential and the success it has had to date, even if much of it has yet to be formally announced. 

“We have a very big interest from investors now,” he says. “I’m seeing my investment division getting really busy, which is very encouraging. I think that when we get to this time next year, we’re going to see a big repetition of what I call replacement equity.

“On some of the commercial assets right now, we’re getting great interest from foreign equity. We’ve had several cases now where foreign partners, such as Saudi, GCC and international partners, have seen the project out of the ground. They can really see it right in front of them. 

“We have a major development with a retail developer from Italy and one from Colombia on buying hotels and going into residential sales with us as joint-venture partners. Funding has been front-loaded from the PIF, which is why it’s important to be a gigaproject within the PIF family. What’s also important is that it allows us to keep up the pace and, more importantly, maintain our quality.” 

To date, the PIF has funded all of the infrastructure works on the gigaproject and is expected to provide another SR12bn this year for further development. 

But at some point, Diriyah Company and the other PIF project subsidiaries are expected to obtain financing, particularly once they start earning revenues. Neom and Red Sea Global have already successfully raised funds through a combination of bond issuances and corporate loan agreements, and Diriyah itself is likely to go down the same route.

Likewise, it is expected to eventually go public when the time is right.

“When will that happen,” says Inzerillo. “That will obviously depend on PIF’s input, which is very important, but we’ve already started the process of getting ready for an initial public offering at some point. I’d be very happy to see that happen before 2030 as I think it would be a great accomplishment. And I’m optimistic to that effect.”

With its first assets up and running and a record value of contracts awarded in 2024, Diriyah is developing at a rapid pace and its CEO is clearly confident it will have most of its core components ready by the launch of the World Expo 2030. 

Much still needs to be done, however. Line 2 of the Riyadh metro will be extended into the development, where it will interchange with the planned Line 7, linking the new King Salman International airport with Qiddiya via Diriyah. The Q Express, a planned express train linking the airport with the entertainment gigaproject, will also stop at Diriyah. All three projects will be handled by other clients and, therefore, somewhat out of Diriyah Company’s direct control. 

Likewise, it remains unclear what the full impact of Expo 2030 and the 2034 World Cup will be on the project ecosystem in the capital. Combined with the giant New Murabba development and ongoing works on the King Salman Park and Sports Boulevard megaprojects, the market is not likely to settle any time soon. 

And despite all the positive talk, there are still very few concrete announced investments in the gigaprojects. Yet, with its first areas already opened and other key elements well under way, Diriyah is arguably better placed than most to capitalise on this unprecedented investment opportunity.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13396510/main.gif
Edward James

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Saudi Arabia tenders next phase of King Saud Air Base

    10 September 2026

     

    Saudi Arabia’s Ministry of Defence & Aviation has started the tendering process for the next phase of the King Saud Air Base in the kingdom.

    Contractors have been given until 20 October to submit their bids.

    The scope of works covers the construction of the headquarters building, administrative buildings, operations and maintenance area, police camp facilities, weapons and ammunition area, residential facilities, airfield facilities and other associated facilities.

    The project duration is three years.

    The air base spans an area of 383 square kilometres (sq km) in the Hafr Al-Batin area of the kingdom’s Eastern Region.

    Contracts worth about SR6.6bn ($1.8bn) for the project’s first phase were awarded early last year.

    The joint venture of local firms Isam Khairi Kabbani Group and Alfanar Projects was appointed as the main contractor for the first package, which was worth about SR2.9bn ($783m).

    The consortium comprising Riyadh-based Albawani, Shibh Al-Jazira Contracting and Kuwait’s Alghanim International won the second package, worth about $1bn.

    According to GlobalData, Saudi Arabia’s defence budget is projected to grow from $68bn in 2027 to $86.3bn by 2031, representing a compound annual growth rate (CAGR) of 6.1%.

    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:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19544241/main.jpg
    Yasir Iqbal
  • Sabic awards $3.47bn contract for ammonia and urea complex

    10 September 2026

    Register for MEED’s 14-day trial access 

    Sabic Agri-Nutrients, an affiliate of chemicals giant Saudi Basic Industries Corporation (Sabic), has awarded the main engineering, procurement and construction (EPC) contract for its seventh project in Saudi Arabia’s Jubail Industrial City, which will significantly expand its ammonia and urea production capacity.

    South Korea’s Samsung E&A has won the contract for the project known as San VII, valued at $3.465bn, Sabic Agri-Nutrients said in a filing with the Saudi Exchange (Tadawul) on 10 September. It added that its board approved the final investment decision on the project on 9 September.

    The San VII project in Jubail Industrial City, in the kingdom’s Eastern Province, will have a production capacity of about 1.2 million metric tonnes a year (t/y) of conventional ammonia and 2.6 million metric t/y of urea. The complex will also feature a post-combustion carbon capture unit.

    Sabic had earlier announced receiving approval for feedstock allocation from the Saudi Ministry of Energy in March for the project, which will expand Sabic Agri-Nutrients’ urea production capacity by 54%, from approximately 4.8 million metric t/y to 7.4 million metric t/y.

    The San VII project replaces a previously planned low-carbon or blue ammonia project with a conventional ammonia and urea facility. The project, which was previously known as San VI, was slated to produce 1.2 million metric t/y of low-carbon ammonia and 1.1 million metric t/y of urea and specialised agri-nutrients.

    Before being restructured into its current form, MEED reported in March last year that Samsung E&A was the frontrunner to win the main EPC contract for the project.

    Sabic Agri-Nutrients expects construction on the San VII project to begin in Q4 2026, with commissioning scheduled to start in Q3 2030. The commissioning period will last four months, ahead of the start of commercial production and completion of the project in Q4 2030.

    The San VII project “is also expected to represent a significant step toward enhancing the company’s competitiveness and sustainability through the integration of advanced carbon capture technologies and the reduction of emissions intensity across its operations. This will contribute to reducing the carbon footprint of its products, supporting the company’s sustainability and carbon neutrality ambitions”, Sabic Agri-Nutrients said in its Tadawul filing.

    “The project is considered one of the key pillars of the company’s 2040 strategy, which aims to strengthen the kingdom’s position in the agricultural nutrients export market and contribute to global food security, in line with the objectives of Saudi Vision 2030,” it added.

    Sabic Agri-Nutrients

    Formerly Saudi Arabian Fertiliser Company (Safco), Sabic Agri-Nutrients was the first petrochemicals company to be established in Saudi Arabia in 1965.

    Sabic Agri-Nutrients, in which Sabic owns the majority 50.1% share, is one of the leading global fertiliser producers, with a portfolio that includes urea, ammonia, phosphate and other specialised products.

    For the second quarter of 2026, the company reported a sharp decline in profitability, primarily driven by a drop in revenue and lower sales volumes compared with both the previous quarter and the same period last year.

    Sabic Agri-Nutrients saw its net profit fall by 64.25% to $101m, compared with $282.66m in the second quarter of last year, and by 69.11% on a quarter-on-quarter basis.

    The company’s Q2 revenues were down by 26.65% year-on-year at $643m, and by 16.11% quarter-on-quarter. Earnings before interest, taxes, depreciation and amortisation (Ebitda) in Q2 stood at $165m, a drop of 51% year-on-year and 55% quarter-on-quarter.

    Sabic Agri-Nutrients further said its profitability suffered from a 31% quarterly decline in agri-nutrient sales volumes, recorded at 960,000 metric tonnes. Although global supply chain disruptions triggered a 27% price increase for agri-nutrients during the second quarter, the short-lived macro-driven bump was not enough to fully offset the slide in sales volumes.

    In December 2022, Saudi Aramco and Sabic Agri-Nutrients delivered the world’s first commercial-grade blue ammonia cargo to South Korea. Locally based Lotte Fine Chemicals received the shipment of 25,000 metric tonnes of independently certified blue ammonia in the southern city of Ulsan.

    Following that milestone, the company struck several deals in 2023 with customers worldwide to supply low-carbon ammonia and urea.

    In April 2023, Sabic Agri-Nutrients shipped the first independently certified low-carbon ammonia from Saudi Arabia to Japan, where it is being used as fuel for power generation. The ammonia cargo was produced with feedstock from Saudi Aramco, sold by Aramco Trading Company to Fuji Oil Company and transported by Mitsui OSK Lines.

    After that, Sabic Agri-Nutrients shipped 5,000 metric tonnes of low-carbon ammonia in May 2023 to a customer in India, Indian Farmers Fertiliser Cooperative.

    The company then shipped 5,000 metric tonnes of low-carbon ammonia to Taiwan Fertiliser Company in June 2023.

    Sabic Agri-Nutrients’ latest shipment is believed to have been in July 2023, when it shipped a 2,700-tonne cargo of low-carbon urea to Ravensdown, a New Zealand farmer-owned agricultural co-operative company.

    Separately, Sabic Agri-Nutrients announced signing a memorandum of understanding (MoU) with Maaden Integrated Fertiliser Company (MIFC) on 18 August to explore potential collaboration opportunities.

    The non-binding MoU, which is valid for three years, “aims to establish a general framework for cooperation between the two parties in developing and investing in opportunities within the integrated value chain of agri-nutrients, including the production and manufacturing of value-added products”, Sabic Agri-Nutrients said in a Tadawul disclosure.

    MIFC is a limited liability company wholly owned by Saudi Arabian Mining Company (Maaden). MIFC serves as the holding entity for all subsidiaries within Maaden’s phosphate business vertical.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19539503/main.jpg
    Indrajit Sen
  • Contractor wins Riyadh airport sewage plant deal

    10 September 2026

     

    The local Safari Company has been selected to build a sewage treatment plant at the King Salman International airport (KSIA) development in Riyadh.

    The contract for the facility is yet to be formally signed with King Salman International Airport Development Company (KSIADC), a source close to the project told MEED.

    The facility will have a treatment capacity of 92,000 cubic metres a day and is estimated to be worth SR700m ($187m).

    In July, MEED reported that Safari was one of seven contractors awaiting a decision on a contract to build the sewage treatment plant.

    It is understood that bids were submitted in March, following the tender’s release earlier this year.

    The plant will treat wastewater generated by the airport and surrounding developments, including passenger terminals, runways, residential districts, commercial facilities and logistics areas.

    The bidders (all local) are:

    • Al-Rawaf Trading & Contracting
    • Almajal Alarabi
    • Nesma Water & Energy
    • Safari Company
    • Saudi Services for Electro-Mechanic Works
    • Washnah Contracting
    • Water & Environment Technologies (Wetico)

    The project scope includes the construction of the treatment plant, the installation of preliminary, secondary and tertiary treatment systems, sewage collection and conveyance pipelines, pumping stations, and electrical and control systems.

    US-headquartered Jacobs is acting as the main project consultant. Commercial operations for the plant are scheduled for 2029.

    The sewage treatment plant is one of several water infrastructure packages planned for the airport. KSIADC is also evaluating bids for a separate $30m engineering, procurement and construction (EPC) contract covering potable water and fire water tanks and an associated pumping station. The same seven companies submitted bids for that package.

    Earlier in July, MEED exclusively reported that a joint venture of Beijing-headquartered China Civil Engineering Construction Corporation and Dammam-based Mofarreh AlHarbi & Partners had won a deal to undertake the enabling and substructure works for Terminal 6 at KSIA.

    That same month, MEED exclusively reported that contract details were being finalised for the main construction contract for the expansion of Hail airport. It is understood that Safari Company was appointed as the contractor for this project.

    The terminal expansion works include the south expansion, which encompasses the construction of a new building covering 5,600 square metres. This building will connect to the existing terminal from the southern side.

    The expansion will increase the airport’s capacity to about 1.7 million passengers a year by 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19539284/main.jpg
    Mark Dowdall
  • Azizi to announce $8bn Sharjah residential community

    10 September 2026

    Dubai-based real estate developer Azizi Developments is preparing to launch Azizi Florence, a AED30bn ($8bn) masterplanned community in Sharjah.

    Named Azizi Florence, the project will mark the developer’s first venture in the emirate of Sharjah.

    The community will include 1,130 villas, over 6,000 townhouses and 3,500 apartments.

    Planned as a fully integrated destination, Azizi Florence will combine residential, retail, hospitality, education, leisure, and wellness components, anchored by a 1.7 million-square-foot central park.

    The development will be organised into six residential clusters, each featuring its own park, clubhouse, community centre and landscaped gardens.

    Azizi Florence is another major addition to the developer’s UAE portfolio. 

    In April last year, Azizi announced plans to develop the Azizi Milan community in Dubai’s City of Arabia area.

    According to media reports, the project will be developed at an estimated cost of AED75bn ($20bn) and will offer over 81,200 residential units.

    The developer said the project will cover an area of about 40 million square feet, making it one of the largest mixed-use communities in the UAE.

    In 2023, Azizi launched the Azizi Venice project in the Dubai South area. The estimated AED30bn ($8.17bn) mixed-use development will offer more than 30,000 residential units, including 100 mid-rise apartment complexes and 400 villas, two five-star hotels and an opera house.

    The development will also include schools, a hospital, cycling and jogging tracks, a 3-kilometre-long swimmable lagoon, water features and landscaped parks.

    Dubai real estate developments dominate the UAE’s construction market, with schemes worth over $323bn in the execution or planning stages.

    This is in line with a forecast by GlobalData, which projects that the output of the UAE construction sector will grow by 4.2% in real terms in 2025, supported by developments in infrastructure, energy and utilities and residential construction projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19535526/main.jpg
    Yasir Iqbal
  • Saudi Arabia’s power award activity slows

    10 September 2026

     

    Saudi Arabia’s power market has seen a sharp fall in contract awards in 2026 following a major wave of renewable energy investment last year.

    According to regional project tracker MEED Projects, about $3.38bn of power sector contracts were awarded in the kingdom as of early September, compared with $27.5bn in 2025, $54.2bn in 2024 and $26.1bn in 2023.

    The relatively low level of contract awards this year has partly been influenced by a shift towards wider infrastructure such as battery energy storage systems (bess) and transmission projects, alongside delays in the procurement of renewable energy projects under the National Renewable Energy Programme (NREP) Round 7.

    In September, Saudi Power Procurement Company (SPPC) awarded four Group 1 storage service agreements representing more than SR4.35bn ($1.16bn) of investment. The projects will provide a combined 2,000MW of capacity and 8,000MWh of storage.

    Three bess projects, Al-Muwyah, Haden and Al-Kahafa, were awarded to a consortium of Saudi Energy, Acwa and Al-Sharif Contracting & Commercial Development Company. Another consortium of France’s Engie and Haji Abdullah Alireza & Co won the contract for the remaining Al-Khushaybi bess project.

    Transmission awards

    The battery storage projects are part of a broader shift towards the infrastructure needed to support Saudi Arabia’s expanding power system, with transmission accounting for most of the contracts awarded this year, reaching $3.35bn in new awards.

    The largest is the estimated $500m contract awarded to Alfanar Projects in March for the 500kV overhead transmission line linking Saudi Arabia’s Eastern and Central operating areas. The 508-kilometre project will have a transmission capacity of 3,000MW.

    Saudi Energy, formerly Saudi Electricity Company, is implementing a $58.7bn grid investment programme through 2030, including 130 high-voltage substations, about 12,900km of overhead transmission lines and 1,100km of underground cables.

    Saudi Energy is the largest owner by value so far this year, accounting for about $1.9bn of contract awards, while SPPC has awarded more than $1.1bn in new contracts.

    The focus on storage and transmission follows strong growth in renewable generation investment in 2025. Wind power contract awards reached $4.4bn, while 11 major solar contracts were also awarded.

    In May 2025, developers signed $8.3bn of power purchase agreements with SPPC for five solar plants and two wind farms with a combined capacity of 15,000MW, somewhat inflating last year’s figures. The projects, backed by the Public Investment Fund, reached financial close in November.

    Renewables projects

    The next major phase of renewable procurement is now moving through the tender process. The seventh round of NREP, tendered in January, will add 5,300MW through four solar and two wind projects.

    Based on the procurement timeline for the Round 6 projects, which were tendered and awarded in 2026, it was reasonable to expect Round 7 to follow a similar schedule.

    However, according to one developer, rising supply costs have been a factor in recent deadline extensions for these projects, with those involved “waiting till these come down”.

    With the latest bid submission deadlines set for September, the timing of the procurement process means contracts from NREP Round 7 may now fall into 2027 rather than materially lifting this year’s total.

    The solar projects comprise the 1,400MW Tabarjal 2, 600MW Mawqqaq, 600MW Tathleeth and 500MW South Al-Ula independent power projects (IPPs). The round also includes the 1,300MW Bilgah and 900MW Shagra wind IPPs.

    This helps explain why Saudi Arabia’s power sector contracting could remain relatively subdued in 2026 despite a substantial volume of projects progressing through procurement.

    Project pipeline

    According to MEED Projects, about $5.1bn of power projects are currently under bid evaluation and a further $7.3bn are at the main contract tender stage.

    Solar projects make up the largest share, at about $5.1bn, or 41% of the total. There continues to be relatively strong diversification, with cable and overhead-line projects accounting for about $3bn, followed by wind at $2.2bn, oil and gas-fired power at $1.1bn and substations at about $1bn.

    Renewable energy remains a particularly significant part of the development programme. Saudi Arabia raised its renewable energy target to 130GW by 2030 in 2023 and needs to add roughly 20GW of capacity a year to meet it.

    Large-scale storage is also expected to continue expanding. The latest SPPC projects build on five bess facilities awarded by Saudi Energy through National Grid Saudi Arabia to Alfanar in 2025. The facilities have a combined capacity of up to 2,500MW, equivalent to about 10,000MWh.

    SPPC has also issued the request for proposals for the second phase of its independent bess programme in Saudi Arabia. The Group 2 programme comprises six independent storage provider projects with a total capacity of 3GW, equivalent to 12,000MWh based on a four-hour storage duration. Developers are due to submit bids in October. 

    The timing means the Group 2 projects could contribute to contracting activity in 2027, alongside this next batch of renewable projects under NREP Round 7.

    Nuclear power could provide another potential source of activity over the next 12 months. The US and Saudi Arabia signed a civil nuclear cooperation agreement in July, providing the legal foundation for a long-term, multibillion-dollar nuclear partnership.

    While the agreement is unlikely to translate immediately into major contract values, further progress on Saudi Arabia’s nuclear programme could add another area of activity in the sector as the kingdom moves into 2027.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19535830/main.gif
    Mark Dowdall