Egypt’s construction sector faces delays
22 February 2023
This package on Egypt’s construction and transport sectors also includes:
> Egypt’s El-Attal launches $229m development
> Qatari Diar selects New Cairo project contractor
> Japan inks a new Cairo metro loan
> NMDC to execute $272m Egypt dredging works
> Bidders prepare Egypt dry port proposals
> Egypt qualifies firms for schools PPP
After seven years of continuous growth, Egypt’s construction sector is showing signs of wobbling amid the country’s economic troubles.
The value of construction and transport contract awards in Egypt has grown every year since 2015 and rose to record highs in the past two years, according to regional projects tracker MEED Projects. It grew by 44 per cent to $19.3bn in 2021 – from $13.4bn in 2020 – before rising again by 31 per cent to $25.4bn in 2022.
In January, however, the value of construction and transport contract awards fell to less than $200m. This was the lowest monthly total since July 2016, and well below the $2.6bn of contract awards in January 2022.
Although the general outlook for the construction sector is strong, economic volatility presents downside risks, at least in the short term.
“Things are at a standstill for the moment,” says Salwa Elbakry, business development director for Egis in Egypt.
“Several tenders were set to be issued in early January and February, but due to the current economic situation, including devaluation, there were some delays.”
This slowdown started in June, when the currency crises deepened. Companies remain optimistic, however, as “Egypt has proven to be a versatile economy”, says Elbakry. “There are a lot of positive outlooks for 2023. By the end of the first quarter or the beginning of the second quarter, things will get better.”
As Egypt’s major projects are backed by sovereign funds, international investors and institutions, it is “business as usual”, she adds.
Cairo’s positioning as a destination for international investment has grown in recent years. In 2021, Egypt’s International Cooperation Ministry secured $10.2bn in development financing, of which $8.7bn was dedicated to public sector projects and $1.5bn to private sector development.
GCC investors continue to believe in the Egyptian market as well. “The ties between the GCC and Egypt go way back,” says Elbakry.
Focus on key projects
While the IMF suggested in January that Egypt should curb its project spending, the government has said its major projects are vital for the country’s development and a vehicle for GDP growth.
Recently, Egyptian president Abdul Fattah al-Sisi pledged that national projects would continue. Ongoing infrastructure schemes include a high-speed railway network; roads and bridges; hospitals; and several new cities, including the $20bn new capital, to the east of Cairo.
“Egypt continues to be driving ahead with a lot of big projects,” says Raouf Ghali, CEO of Hill International. “It is the first time I have seen Egypt working on projects and programmes that rival the GCC, and this is very unusual.”
Other sectors that are expected to initiate new developments are tourism, healthcare and education, as well as logistics.
“This year will witness several public-private partnership schemes related to tourism, ports and industrial zones,” says Elbakry. “There is also a lot of buzz around the hospitality sector.”
Rail versus real estate
Railway projects make up $10.5bn, or 90 per cent, of the $11.7bn-worth of construction and transport projects in the bidding phase in Egypt.
The two largest upcoming projects are for work on the Cairo Metro: a $5bn Line 6 package and an $800m package for phase one of Line 4. Both schemes are in the bid evaluation phase.
Schemes on the Alexandria Metro are the next biggest pending awards. The National Authority for Tunnels is receiving bids for two $750m packages for the line between Abu Qir and Misr Station.
With the ongoing currency and inflation crisis, Egypt is trying to use more local resources and further reduce its imports of construction materials. The demand for foreign expertise remains strong in sectors such as rail, however.
“While the Egyptian market is rich in engineering and architectural skills, some projects like aviation, rail, ports, smart cities or water require international know-how,” says Elbakry.
The World Bank Group approved a further $400m in financing in 2022 to support railway network development in Alexandria and Cairo.
Real estate has been another booming sector in recent years, driven largely by domestic demand. Yet the outlook might be shifting now, with projects in the sector appearing to be scaling down and foreign funding showing signs of drying up.
“Egyptians rely on real estate as an investment,” says Elbakry, adding that the market is currently at a standstill because “the only people able to invest in real estate at the moment are high-income individuals”.
For the moment, “everybody is watching what the Central Bank is going to do with the currency and the exchange rate”, says Ghali.
“For construction companies, it is great to get these big contracts, but devaluations after signing contracts do not help profitability.
“It also creates a lot of insecurity because you have a lot of cash in the country that you cannot export, which makes it a very challenging environment,” he adds.
“Overall, we are bullish, but also very cautious because of the currency situation.”
MEED's March 2023 special report on Egypt also includes:
> GOVERNMENT & ECONOMY: Egypt faces up to economic reality
> POWER: Crisis dampens Egypt’s energy diversification
> WATER: Egypt turns to private sector for water
> BANKING: Interesting times for Egypt’s lenders
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
-
-
-
Middle East stocks recover unevenly1 June 2026
-
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
-
Saudi firm to build Al-Henakiyah solar IPP grid link
1 June 2026
Saudi Services for Electro Mechanic Works has won the main contract to build a 380kV overhead transmission line in Saudi Arabia’s Medina region, according to market sources.
The project includes the construction of a 354-kilometre-long overhead transmission line that will connect the Al-Henakiyah 3 solar independent power producer (IPP) to several main substations and export power from the plant into the national transmission network.
The scheme is being developed by Saudi Energy, formerly Saudi Electricity Company.
The scope covers the supply and erection of transmission towers and foundations, as well as associated grid interface and termination works.
The Al-Henakiyah 3 solar IPP is part of Saudi Arabia’s wider pipeline of utility-scale solar projects being developed under the Public Investment Fund’s (PIF’s) renewables programme, which runs parallel to the National Renewable Energy Programme (NREP), now in its seventh round.
In 2025, the PIF outlined plans to advance second- and third-phase extensions to five existing solar plants, including Al-Henakiyah, totalling 9GW of additional capacity.
According to official documents, the negotiation process for the directly-awarded concessions was due to start last year.
Saudi Services for Electro Mechanic Works, meanwhile, is continuing to advance several transmission line projects for Saudi Energy.
In June 2025, it was appointed as the main contractor to build a separate 380kV overhead transmission line linking the 2GW Afif 1 solar IPP to the national grid.
Works on this project are not expected to be completed until at least 2027.
> Be recognised among the best in the industry at the MEED Projects Awards 2026 …
https://image.digitalinsightresearch.in/uploads/NewsArticle/17058114/main.jpg -
Petrofac completes sale of Abu Dhabi business unit
1 June 2026
UK-headquartered Petrofac has completed the sale of Petrofac Emirates, a business unit it established in Abu Dhabi in 2008.
The unit has been bought by a consortium of financial investors led by the New York-headquartered hedge fund Mason Capital Management and UK-based asset management firm Pearlstone Alternative.
In a statement, Petrofac said the sale was completed after the satisfaction of all required conditions and approvals.
The business unit was originally founded with a strategy to provide engineering, design, procurement and construction services for oil, gas, refining, petrochemical and renewable energy projects.
Petrofac Emirates has engineering and construction (E&C) capability and includes E&C teams based in the UAE and India.
In its latest statement, Petrofac said: “Petrofac Emirates encompasses Petrofac’s core E&C capability in the UAE.
“The transaction positions Petrofac Emirates as a strong, self-sustaining company with no funded debt on its balance sheet and substantial growth opportunities.”
Leadership role
Under current plans, Tareq Kawash, who has been the group chief executive of Petrofac since April 2023, will become the chief executive of Petrofac Emirates to lead the E&C business through its next phase under new ownership.
Kawash has over 30 years of international leadership experience at engineering procurement and construction (EPC) companies.
Prior to working at Petrofac, he was a senior vice-president at McDermott International.
Following the completion of the sale, Afonso Reis e Sousa will step down as group chief financial officer of Petrofac.
Commenting on the sale of Petrofac Emirates, Kawash said: “The completion of this transaction marks an important milestone for Petrofac Emirates and the beginning of an important new chapter for the business.
“Under our new ownership structure, with a focused platform for growth, we are well-positioned to build on our track record, strengthen our long-standing customer relationships and pursue new opportunities across the wider Mena region.
“The transaction is not the destination; it is the platform from which we move forward with confidence, discipline and ambition.”
Sam Read, a partner at Mason, said: “Our mission is to empower Petrofac Emirates to achieve its strategic goals, capitalise on new market opportunities, and leverage significant growth potential in the dynamic energy EPC sector.
“Petrofac Emirates has market-leading capabilities and an unmatched track record of delivering for its customers, and we look forward to partnering with the company to help drive continued success.”
The sale of Petrofac Emirates follows the completion of the sale of Petrofac Asset Solutions in April.
In December, it was announced that US-based CB&I had entered into a sale agreement to buy the unit.
Petrofac’s asset solutions unit provides operations, maintenance and decommissioning services for onshore and offshore energy assets.
In a statement, CB&I said that the acquisition would strengthen its portfolio with “a complementary reimbursable contracting model business, delivering predictable cash flow and enhancing service capabilities”.
Restructuring disruption
Amid Petrofac’s dramatic restructuring, there has been disruption to progress at some of the company’s projects.
In March, MEED reported that Petrofac, along with its partner China Huanqiu Contracting & Engineering Corporation (HQCEC), had stopped work on a petrochemicals project in Algeria, valued at approximately $1.5bn.
The news about the Algeria project came just over two weeks after MEED reported that Petrofac had also stopped work on an oil project in Libya and cut staff in the North African country.
https://image.digitalinsightresearch.in/uploads/NewsArticle/17057152/main.jpg -
Chinese-Saudi joint venture to build 18GWh battery storage plant
1 June 2026
China-headquartered ZOE Energy Storage has announced it has signed a joint-venture agreement with a Saudi partner to develop a battery energy storage system (bess) manufacturing facility in the kingdom.
The facility will be developed in two phases. The first phase will have an annual production capacity of 6GWh and is scheduled to begin operations in the first quarter of 2027.
A second phase will increase the total production capacity to 18GWh.
In a statement, ZOE said the manufacturing facility will cover 150 acres and will be built to European manufacturing standards.
The location and the partner involved have not been publicly disclosed.
The Saudi facility will be the Chinese company’s second overseas manufacturing base, following a 6GWh energy storage system manufacturing facility in Hungary. This was developed with Energy Pro Hungary and began operations in October 2025.
Under Saudi Arabia’s Vision 2030 objectives, the kingdom plans to deploy 130GW of renewable energy capacity and 48GWh of energy storage and achieve 50% clean power generation.
In May, Saudi Arabia’s principal buyer, Saudi Power Procurement Company, received statements of qualification from firms seeking to build, own and operate a second group of bess projects with a combined power capacity of 3GW.
The programme comprises six independent storage provider projects with a total capacity of 3GW, equivalent to 12,000 megawatt-hours based on a four-hour storage duration.
The main contract tender is expected to be issued in the coming months once firms are formally prequalified.
> Be recognised among the best in the industry at the MEED Projects Awards 2026 …
https://image.digitalinsightresearch.in/uploads/NewsArticle/17057079/main.jpg -
Middle East stocks recover unevenly
1 June 2026
The combined market capitalisation of the MEED Top 100 largest listed companies in the Middle East and North Africa rose to $3.73tn in mid-May 2026, against $3.48tn a year earlier – a 7.2% gain that recovers most of the value lost in the prior two years’ editions. The aggregate is not the story.
Saudi Aramco recovered by $181bn, rising from $1.64tn to $1.82tn and providing substantial support to the aggregate Top 100 valuation. The broader movements in the list differentiated along sectoral lines, with key trends including the continued growth of regional banks, the upward repricing for fertiliser and logistics names amid the Hormuz crisis, and the correction of Saudi mid-tier stocks as valuation peaks have failed to hold.
Oil and gas reweights
Aramco’s share price recovered from about SR25 to SR30, lifting the company’s market cap by 11% and raising the oil and gas sector’s share of the list back to 54.5%.
The company reported first-quarter 2026 net profit of $32.5bn, up 25%, on revenue of $115.5bn – giving it a price-to-earnings ratio of about 18, in line with the Saudi market average as of April.
Aramco’s diversion of crude to Yanbu through its 7 million-barrels-a-day West-to-East pipeline has supported a higher volume of sales at the now elevated prices compared to its Gulf peers, the exports of which have been more seriously affected by the blockade of the Strait of Hormuz.
Other Saudi names also benefiting from this combination of ongoing access through Yanbu and energy repricing produced the cleanest gains, with Rabigh Refining more than doubling in value to $11.7bn despite a $1.1bn loss, Ades Holding rising 40% to $5.8bn, Luberef rising 28% to $5.8bn and Yansab also seeing double-digit returns.
In the UAE, by contrast, Adnoc Gas has remained broadly flat at $66.7bn, with its Q1 2026 net income dropping 15% and conflict damage estimates indicating that full capacity will not be restored until 2027. Borouge meanwhile held, while Adnoc Drilling and Adnoc Distribution gained by 14% and 8%, respectively.
There was some slippage in the petrochemicals sub-cluster, with Saudi Basic Industries Corporation (Sabic) posting a net loss of $6.96bn and sliding 3%, alongside a 2% slide for the energy sector-adjacent Industries Qatar.
Banking and industry
The banking sector, which accounts for 33 of the 100 entries and 18% of the list by value, expanded by an aggregate 6.3% in absolute terms. Al-Rajhi Bank, the largest banking entry at $107.9bn, reported FY2025 net profit up 26% to SR24.8bn ($6.6bn); total assets passed SR1tn for the first time and Q1 2026 net profit rose a further 14%.
Emirates NBD, up 23% year-on-year to $47.1bn, reported FY2025 record profit before tax of AED29.8bn ($8.1bn) and likewise crossed AED1tn in total assets.
Kuwait Finance House also rose by 19%, Abu Dhabi Commercial Bank 19% to $28.7bn and Saudi National Bank 11%. Qatar National Bank stalled and slid 1%, while several smaller banks saw gains. Egypt’s Commercial International Bank rose 74% to $8.4bn off a depressed base, Jordan’s Arab Bank meanwhile rose 55%, Oman’s Bank Muscat by 52% and RakBank by 32%.
Several sectors have gained significantly owing to their direct exposure to the Iran conflict’s supply-chain repricing, including logistics, fertilisers and mining.
Logistics firms in the list gained 44% in absolute terms, with Saudi Arabia’s Bahri reporting Q1 2026 net profits up 303% year and revenue up 129%.
Marsa Maroc, the Casablanca-listed port operator, also entered the list at $6.6bn, up 85% on an African expansion that spans 34 terminals across 20 ports following a Liberia management deal signed in February.
Adnoc Logistics rose 32% to $11.6bn, while Air Arabia, the Sharjah-based low-cost carrier, joined the list at $6.1bn as it absorbed redirected long-haul flows. Nakilat, the Qatari liquefied natural gas shipping operator, was the sector’s sole softener, down 12% on slower throughput.
Mining and fertiliser entries sit alongside the logistics gainers. Jordan Phosphate Mines is the cleanest single expression of the post-Hormuz repricing visible on the list – up 127% year on year to $13.2bn, as the World Bank’s April 2026 Commodity Markets Outlook projects fertiliser prices to rise nearly 31% in 2026.
Maaden rose 23% to $65.3bn after FY2025 net profit jumped 156%, backed by record phosphate production; high aluminium output; and rising silver, copper and aluminium prices linked to artificial intelligence, data centre, solar and electric vehicle demand.
Morocco’s Managem also entered the list at $19.7bn, having almost tripled in value in the past two years on cobalt, silver and copper prices and African expansion.
Sabic Agri-Nutrients rose 44% on a 30% 2025 net profit increase, while Fertiglobe rose by 40% – both potentially anticipating a 60% forecasted rise in urea prices.
Property and other trends
The direction of the property and real estate sector has been uniformly downward. The Iran conflict has driven both a slump in UAE property sales and prices and a similar tourism-adjacent correction in Saudi Arabia. Both the Mecca-focused Umm Al-Qura and Jabal Omar development firms have seen their valuations slashed by more than a third, while Makkah Construction & Development slid by 15%.
The UAE’s Emaar Properties and Dar Al-Arkan and Qatar’s Ezdan Holding have also all seen slides of more than 15%. Kuwait’s Mabanee, which rose by 22%, is the one exception in the sector.
In Saudi Arabia’s mid-tier, Acwa Power shed 29% in value even as its revenue rose 18% and its net income 5.4%. Elm Company likewise shed 33%, Dr Sulaiman Al-Habib 19% and the Saudi Tadawul Group 21%.
Mouwasat Medical Services, MBC Group, Nahdi Medical and Saudi Logistics Services fell out of the list entirely on the same trajectory. Each had reported FY2025 earnings rises before the decline. What corrected was the valuation, not the operations.
Acwa Power’s trailing four-quarter average price-to-earnings ratio was 166x, and even after this year’s decline sits at 88x against the Saudi market average of 17.8x. Elm sits at 26x, Al-Habib at 33x, Saudi Tadawul Group at 42x – all rich by any comparable benchmark.
Many of these entries have fallen away from their peak valuations as the cooling of the gigaproject programme since early 2025 has undermined sentiment.
One example that sits on the same axis from the UAE side is Abu Dhabi National Energy Company (Taqa), which fell by 28% from $95.3bn to $69.0bn despite a 6% net income rise, even as capital expenditure also expanded by 50%.
There are now nine entries from Morocco’s Casablanca bourse against six a year ago, with an aggregate value of $74.7bn, up from $50.8bn. Industrial contractor Societe Generale des Travaux du Maroc,entered via a December 2025 initial public offering (IPO). Several Moroccan stocks have also slipped, however, including Taqa Morocco, down 42%; Maroc Telecom, down 18%; Banque Populaire, down 13%; and Bank of Africa, down 10%.
There has been a similarly divergent trend among 2024 IPO entrants. While OQ Exploration & Production rose 68% to $10.1bn and is now the largest stock on the Muscat Securities Market, the UAE’s Talabat – 2024’s second-largest IPO at $9.2bn – has corrected 33% to $6.1bn.
The Multiply Group has been replaced on the list through its November 2025 merger into 2PointZero Group, which now sits in the top 30 entries at $19.6bn.
Regional repricing
Four trends underpin the list’s 7.2% recovery. The conflict has repriced specific cohorts sharply higher – logistics up 44%, mining and fertilisers up 43%, the Yanbu refiners returning, and Aramco recovering to $181bn – with gains contingent on the Strait of Hormuz remaining closed.
Regional banks have maintained last year’s momentum, with assets crossing trillion-unit thresholds and loan books supported by project activity. Six names have posted double-digit gains that are unlikely to reverse if conditions normalise.
Saudi mid-tier stocks have corrected largely on valuation rather than operations, despite many reporting earnings growth through 2025, as confidence in gigaproject-driven growth has weakened. Property has also softened in the region as conflict has reduced routine and religious tourism.
The 12-month outlook depends on whether Hormuz reopens, whether Saudi mid-tier valuations stabilise, and whether banking expansion holds under broader repricing.
https://image.digitalinsightresearch.in/uploads/NewsArticle/17057545/main.gif -
Developers win deals for $3.5bn of Mecca projects
1 June 2026
The Royal Commission for Makkah City and Holy Sites has awarded six real estate development deals. The projects, which cover a total land area exceeding 2.7 million square metres (sq m), will require a total investment of SR13.3bn ($3.5bn).
The sites are located within the neighbourhoods of Jurhum South, Al-Khalidiyah, Al-Hajlah, Al-Hindawiyah East, Al-Hindawiyah South and Al-Hindawiyah West. The projects will be delivered as partnerships with domestic real estate developers, institutional investors and dedicated private investment funds.
A consortium consisting of Makkah Construction & Development Company, Umm Al-Qura for Development & Construction Company and Al-Rajhi United Real Estate Company will develop the Hindawiya West and Hindawiya South districts, which have a combined area of nearly 1.15 million sq m, adjacent to the Masar Destination project. The consortium informed the Saudi Stock Exchange (Tadawul) that it received letters of award for the project on 31 May.
The initial cost of the project is estimated at SR6bn. Umm Al-Qura will act as the consortium leader and development manager, while Makkah Construction & Development Company will serve as the financial partner. The infrastructure works will be executed by Al-Rajhi United Real Estate Company as the technical partner, with the entire development financed through a private, closed-ended real estate investment fund overseen by a Capital Market Authority-licensed manager.
A consortium comprising First Avenue for Real Estate Development Company, Dar Al-Majed Real Estate Company and Rekaz Real Estate Company has been awarded the concession for the East Hindawiyah site. Located 1.8 kilometres from the Holy Grand Mosque, the 235,000 sq m plot is expected to cost SR2bn to develop, which includes land acquisition and foundational infrastructure. The development will be structured as a real estate investment fund managed by Jadwa Investment, with the ultimate goal of creating an integrated urban destination featuring retail, office, hospitality and residential components. The final contract signing for this deal is expected by 10 June 2026.
Ladun Investment Company, in partnership with Al-Ayuni Investment & Contracting Company, has signed a deal for the Al-Khalidiyah district. With a targeted sales value exceeding SR6bn, the consortium will establish a closed-ended private real estate investment fund to execute extensive infrastructure works, subdivide the land plots, and handle subsequent marketing and sales. The detailed scope of works involves complete engineering designs, public park planning and utility coordination with entities such as National Water Company and Saudi Electricity Company, before a contract is signed by 9 June.
Saudi property dreams: Read the January 2026 MEED Business Review
https://image.digitalinsightresearch.in/uploads/NewsArticle/17057606/main.jpg