meed-logo

line1 line2 line3
SIGN IN / REGISTER

Emerging Gulf-Asia corridor grows despite headwinds

21 May 2025

 

During his state visit to Saudi Arabia, Qatar and the UAE on 13-16 May, US President Donald Trump announced mulitibillion-dollar deals to advance shared interests in both traditional industries and emerging technologies.

Saudi Arabia committed $600bn and Qatar pledged $400bn. The UAE, meanwhile, confirmed an investment of $200bn, the initial installment of a commitment to invest up to $1.4tn in the US over the next 10 years.

Most of these investments will be in defence, energy, technology and artificial intelligence (AI) – sectors in which US companies have traditionally led or tended to dominate, and which are expected to see significant future expansion, benefiting the energy and economic diversification agendas of the Gulf states.

“We’ve launched the golden age of America,” Trump said. “The golden age of the Middle East can proceed right alongside of us.”

Asia ties

These investments and trade commitments between the Gulf states and the US carry significant economic and geopolitical undertones. They are expected to generate new revenue streams, boost the global trade status of the GCC countries, and help to diversify their economies away from hydrocarbons. 

However, the Gulf-US investments do not necessarily deprioritise the strategies of the GCC states in recent years to pivot investments towards Asia – in particular to China, India and several Southeast Asian nations.

In May 2024, UAE President Mohamed Bin Zayed Al-Nahyan visited China, cementing UAE-China cooperation in several areas. Independent think tank Asia House described the visit as one of the most significant bilateral political exchanges of the year.

Asia’s economic trajectory represents a pivotal opportunity to advance Mubadala’s sustainable growth and innovation mission, while building its presence in the region as part of a broader geographic diversification strategy.

There have also been several bidirectional investments, led by the Gulf and Asia’s sovereign wealth funds – a trend that is likely to increase over the coming years.

In October, Saudi sovereign wealth vehicle the Public Investment Fund and the Hong Kong Monetary Authority signed a memorandum of understanding (MoU) to work on jointly anchoring a new investment fund with a target size of $1bn.

The fund will explore investments in manufacturing, renewables, financial technology (fintech) and healthcare, supporting the localisation in Saudi Arabia of companies connected to Hong Kong and the Greater Bay area, the latter comprising nine Chinese cities with populations of about 86 million.

In January this year, Mohammed Albadr, head of Asia for private equity at Abu Dhabi's Mubadala Investment Company, informed the UBS Greater China Conference in Shanghai of his firm’s commitment to “doubling down on investments in Asia by 2030”.

He said that Asia’s economic trajectory represents an opportunity to advance Mubadala’s sustainable growth and innovation mission, while building its presence in the region as part of a broader geographic diversification strategy.

Ramping-up activity

For those in the region with connections to Asian markets, there has been a significant uptick in activity “in both directions, throughout the Middle East-Asia corridor”, according to Tony Nicholson, a senior associate with international law firm Dentons.

He says that this buoyancy is “leading to a smorgasbord of opportunity, not only for incumbents, but also for new market participants to explore across a diverse range of countries, economies and sectors within the corridor”.

Policy shifts and investment aimed at scaling up renewable energy and low-carbon hydrogen ecosystems within the Middle East-Asia corridor continue to gain momentum, he notes, adding: “Socioeconomic dynamics are also catalysing growth in investment opportunities in transportation, logistics, digital and social infrastructure. We are seeing a lot of focus in these areas.”

Inbound investment

Chinese investments in renewable energy projects in the Gulf began nearly a decade ago. Saudi utility developer and investor Acwa Power signed an MoU with China’s state-owned Silk Road Fund in 2016 to partner on several large projects in the Middle East and North Africa power market.

The same year, the Silk Road Fund took a 7.35% equity in Dubai’s $3.4bn Hassyan independent power project (IPP), which was initially planned to use coal but was converted to natural gas. In 2018, the fund then took a 24% equity share in Noor Energy 1, the project company that won the contract to develop and operate the $3.8bn hybrid solar photovoltaic (PV) and concentrated solar power IPP, also in Dubai.

Three years later, the Silk Road Fund agreed to acquire a 49% stake in Acwa Power RenewCo, which owns existing renewable energy projects in the UAE and other countries in the Middle East and Africa.

Outbound investments

Since then, both Acwa Power and UAE-based Abu Dhabi Future Energy Company (Masdar) have invested or explored investments in renewable energy projects in China, and in emerging Southeast Asian markets such as Indonesia, Vietnam and the Philippines.

In March 2025, Acwa Power said that it aims to invest up to $30bn in China, in line with its plans to triple overall assets under management to about $250bn globally.

Masdar established the 145MW Cirata floating PV power plant in Indonesia in 2023, which is planned to be expanded to 500MW. It is also exploring the development of other floating solar projects in the country, and has made a strategic investment in Pertamina Geothermal Energy.

Also in 2023, Masdar signed an agreement with the Malaysian Investment Development Authority to develop up to 10GW of renewable energy projects in the Southeast Asian country.

This year, it has signed an agreement to develop up to 1GW of clean energy projects in the Philippines by 2030, including solar, wind and battery storage schemes.

“Our partnerships with industry leaders across the region’s energy sector not only deliver clean power, but also create local jobs and support national economic growth,” Abdulaziz Alobaidli, Masdar's chief operating officer, tells MEED. “Our investments in the region are set to grow, supporting the transformation of the energy system and driving progress against the governments’ renewable energy goals.”

Other sectors

In addition to renewable energy projects, inbound Middle East investments include the real estate, mining, fintech and AI sectors. The broadening and deepening of activity by Asian banks, financial institutions, private credit and funds is also a key theme, says Dentons' Nicholson.

In November 2024, for instance, Singapore's First APAC Fund VCC signed an MoU to invest up to AED5bn ($1.3bn) in Dubai-based AMIS Development, which will use the investment to “further expand its growth, both locally and internationally by growing its land bank, project pipeline, global brand partnerships, project team and investments in technology”.

Earlier in May, Abu Dhabi-based agri-food and technology company Silal and Shouguang Vegetable Industry Group (SVG), a Chinese company specialising in vegetable seed breeding and counter-seasonal production, signed a strategic partnership agreement enabling SVG to invest over AED120m in the development of a 100,000 square-metre agricultural technology joint venture in Al-Ain.

Asia-based banks are also providing support or lending to local banks, or to local branches of international banks, to boost the liquidity of the lenders amid the GCC's real estate and construction boom – particularly in Saudi Arabia.

While it is not unusual for banks to lend to one another, the scale of the project financing needed is significant, according to a senior financial adviser specialising in Saudi projects. Indeed, it is "so staggering that it is impossible to assume that local banks will not have to face liquidity issues going forward", he says.

He adds that some in the kingdom are looking at bringing back export credit agency financing to help de-risk major infrastructure projects and assets, noting that liquidity injection by international banks, including those headquartered in Asia, will help support the delivery of Saudi Arabia's Vision 2030 projects.

Trade trends

According to Asia House, the economic diversification programmes of Gulf countries are driving non-oil growth, creating opportunities for Asian firms in the areas of construction, infrastructure, technology, sustainability and financial services.

"The Gulf states’ economic and social reforms continue at pace, attracting Asian investment, firms and talent," the think tank says.

"New air routes between the Gulf and Asia will boost tourism and business connectivity," it continues. "For these reasons, Gulf-emerging Asia trade will keep growing and is on track to reach $682bn by 2030 if it continues at the 7.1% average annual growth rate seen between 2010 and 2023."

A 2023 dip in trade affected key Gulf-Asia bilateral partnerships. Saudi-China trade fell 7.6%, while UAE-China trade fell by 15.5% in 2022-23. Nonetheless, both countries’ relationships with China have deepened and grown more strategic.

In 2023, Saudi Arabia and the UAE were invited to join the Brics group of emerging economies, which originally comprised Brazil, Russia, India, China and South Africa, bringing them closer to Chinese decision-making at a global level.

Shared prosperity

The recent deals that Trump signed in Riyadh, Doha and Abu Dhabi have complicated predictions about when Gulf-Asia investments coud equal or surpass those with the US or broader West.

However, by spreading their investments across key geographies and sectors in recent years, the Gulf states have been able to secure steady returns, sustain growth and make progress on their sustainability goals.

Asian nations and sovereign funds are now adopting a similar approach – albeit on a varying scale – to pursue the same objectives.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13911866/main2341.jpg
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Qiddiya plans $7bn theme park hub near Paris

    25 August 2026

    Saudi Arabia’s Qiddiya Investment Company plans to develop a mixed-use leisure destination worth about €6bn ($7bn) at Cergy-Pontoise in the Ile-de-France region, in one of the largest Saudi investments in French tourism infrastructure to date.

    The plan was set out in a joint statement issued on 24 August at the close of a state visit to France by Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud. France and Saudi Arabia signed a memorandum of understanding (MoU) covering the project during the two-day visit.

    The destination will bring together entertainment, leisure, hospitality, culture and sport, according to the joint statement. Current plans envisage up to three major entertainment anchors, hotels and complementary leisure experiences, with the €6bn figure covering the full development lifecycle.

    One of the three parks is expected to be manga-themed, according to the French presidency. The themes of the other two have not been disclosed. The parks will be built and opened in stages, with construction expected to take several years. No opening date has been given.

    The parks are expected to create about 22,000 direct jobs, according to the French presidency, compared with about 20,000 at Disneyland Paris. Cergy-Pontoise lies about 30 kilometres northwest of Paris.

    Qiddiya is a subsidiary of the Public Investment Fund, Saudi Arabia’s sovereign wealth fund. Its flagship project is a giga-scale entertainment, sports and cultural city on the outskirts of Riyadh, one of several gigaprojects under Vision 2030.

    The theme park plan was among a wider set of agreements reached during the visit. Both sides welcomed the announcement of 21 agreements and MoUs at a French-Saudi investment roundtable, spanning energy, industry, financial services, transport and logistics, health, culture, tourism and artificial intelligence. Bilateral trade reached about $11.8bn in 2025.

    It is not the first time Saudi capital has backed a French theme park. Kingdom Holding Company was a longstanding investor in the operator of Disneyland Paris, first taking a stake in 1994 and participating in successive recapitalisations before Walt Disney Company moved to near-full ownership in 2017.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18987274/main.png
    Colin Foreman
  • Masdar shelves Abu Dhabi green hydrogen project

    25 August 2026

     

    Abu Dhabi Future Energy Company (Masdar) has decided to cancel a planned project to build a green hydrogen plant in Abu Dhabi that would have supplied up to 100MW of renewable hydrogen to local steelmaker Emsteel for green steel production.

    After contractors submitted bids for the project last year, Masdar asked bidders in the first quarter of this year to extend the validity of their proposals until the end of August to allow “more time to study and evaluate bids”, according to one source.

    However, Masdar issued a notification to all bidders on 1 August stating that it had decided to cancel the project, sources told MEED.

    Contractors that submitted bids for the Masdar green hydrogen project included:

    • Envision (China)
    • Larsen & Toubro (India)
    • PowerChina (China)
    • Samsung E&A (South Korea)
    • Sinopec (China)

    Masdar did not respond to MEED’s request for comment on the information.

    In its current steelmaking process, Emsteel uses hydrogen produced by steam reforming of natural gas as a reducing agent to extract iron from iron ore. The core objective of Masdar’s planned project was to install a 100MW electrolyser at Emsteel’s main manufacturing hub in Musaffah, Abu Dhabi, to supply green hydrogen for future clean steel production.

    Masdar initiated work on the project in 2024 by awarding a front-end engineering and design (feed) contract to locally based NT Energies, a joint venture of Abu Dhabi’s NMDC Energy and France-based Technip Energies.

    Masdar then sought proposals last year for engineering, procurement, construction, demolition (if needed for brownfield activities), pre-commissioning, commissioning, start-up, and two years of operations and maintenance (extendable up to 20 years) at the planned facility.

    Contractors submitted bids by the end of the year, according to sources.

    The project involved green hydrogen production using alkaline water electrolysis, with a total installed electrolyser capacity of 100MW.

    The scope of work involved building electrolyser stacks and modules, hydrogen separation and compression units, associated utilities and storage systems, and electrical, instrumentation and control systems.

    It also included tie-ins to pre-defined interface points, including (but not limited to):

    • a grid power supply connection to the MOSF substation in Musaffah that exists within the Emsteel complex and is operated by Taqa Transmission
    • a water supply connection to a nearby Taqa Distribution network

    Supporting infrastructure included a substation, a motor control centre, and ancillary plant buildings and facilities.

    Masdar’s planned 100MW electrolyser project at the Emsteel facility would have represented a step up from a previous pilot project by the two Abu Dhabi-owned companies.

    The partners inaugurated a pilot green hydrogen plant at Emsteel’s manufacturing complex in Musaffah in October 2024. It incorporates a 2.1MW electrolyser and is designed to support the production of up to 5,000 tonnes of green steel a year.

    This made Emsteel the only steelmaker in the Middle East to use green hydrogen to produce green steel on a pilot basis.

    “Sustainability is central to Emsteel’s innovation, competitiveness and long-term growth. Today, approximately 89% of our steel business electricity consumption comes from clean sources, and our steel carbon emissions intensity is around 40% lower than the World Steel Association global average,” Michael Rion, chief commercial officer of Emirates Steel, part of Emsteel Group, told MEED in a recent interview.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18911651/main0611.jpg
    Indrajit Sen
  • Oman invites bids for Musandam renewables study

    25 August 2026

    Oman’s Nama Power & Water Procurement Company (PWP) has issued a request for proposals (RFP) for techno-economic consultancy services to assess the feasibility of renewable energy options in Musandam Governorate.

    The study will examine solar photovoltaic (PV), wind and hybrid renewable energy configurations. It will also assess battery energy storage systems (bess) and other renewable energy and energy storage technologies.

    The consultant will be required to determine which technologies are technically and economically justified for the governorate.

    The bid submission deadline is 24 September.

    The Musandam power system is served primarily by the 123MW Musandam independent power plant (IPP), which began operating in 2017. The governorate has historically relied on small diesel-fired units, but has been seeking to move away from diesel-fired power generation for several years.

    Nama PWP has previously said it was exploring renewable energy options in Musandam to meet future additional capacity requirements.

    Its latest seven-year statement, released in March, forecasts peak electricity demand in Musandam to rise from 91MW in 2024 to 130MW in 2031, an average annual increase of 5%. Average demand is forecast to rise from 52MW to 73MW over the same period.

    The plan says demand growth is being driven by distribution-level load and projects aimed at boosting tourism, economic and commercial activity. 

    Separately, the utility recently invited bids for financial and commercial consultancy services covering three 1GW solar IPPs targeted for commercial operation by the second quarter of 2030.

    The bid submissions deadline is 10 September.

    The three projects covered by the financial and commercial consultancy tender are understood to also be part of the 4GW programme, for which a technical advisory tender was issued on 15 July.

    Bidding for this tender closes on 26 August.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18983679/main.jpg
    Mark Dowdall
  • US launches sanctions campaign against Iran

    25 August 2026

    The US has launched a sweeping sanctions campaign against Iran and the entities that trade with it, imposing measures on almost 60 individuals, companies and vessels while expanding the reach of secondary sanctions across five sectors of the Iranian economy.

    The campaign, named Operation Economic Outcast, was announced on 24 August by US treasury secretary Scott Bessent, who described it as an economic D-Day for Iran. He said Washington’s objective was to sever every economic lifeline sustaining the Iranian regime.

    The treasury’s Office of Foreign Assets Control (Ofac) issued five sectoral sanctions determinations under Executive Order 13902, covering digital assets, technology, gold, aviation and shipping. The determinations allow Ofac to sanction any person operating in those sectors, regardless of location. Washington said Iran uses cryptocurrency for sanctions evasion, seeks advanced technology for its weapons programmes, uses gold to stabilise the rial, and relies on commercial aviation and shipping networks to move fighters, weapons and oil revenue.

    The measures build on earlier determinations targeting Iran’s financial, petroleum and petrochemical sectors.

    Ofac also sanctioned close to 60 entities, individuals and vessels across multiple jurisdictions, including UAE-based entities, over alleged involvement in nuclear and missile procurement, cyber operations and oil revenue networks. The designations named a network of brokers, companies and shadow fleet vessels operating across the UAE, Hong Kong, China, Singapore, Switzerland and other regions to transport Iranian oil and channel revenue to the Islamic Revolutionary Guard Corps.

    Among those designated were shipping brokers and bunkering firms based in the UAE that Washington said facilitated Iranian oil shipments and provided services to sanctioned vessels. The treasury also identified several shadow fleet tankers as blocked property, saying they had moved millions of barrels of Iranian crude and petroleum products, mainly to China.

    Separately, the treasury targeted a procurement network spanning the Middle East and East Asia that it said supported Iran’s acquisition of proliferation-sensitive equipment, along with a cyber group directed by Iran’s Ministry of Intelligence & Security.

    Bessent said Washington was pressing governments to shut down Iran-related activity within defined timelines, warning that entities facilitating money laundering or sanctions evasion for Iran risked being cut off from the US financial system. He declined to name specific countries.

    The campaign follows the UAE’s own move against Tehran. On 19 August, the UAE suspended all trade, commercial exchanges and financial transactions with Iran with immediate effect, citing regional escalation. The UAE has historically been one of Iran’s most significant trading partners, with much of the relationship built on re-export trade routed through Dubai.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18983152/main.jpg
    Colin Foreman
  • Kuwait tenders $3.3bn gas processing facility

    25 August 2026

     

    State-owned Kuwait Gulf Oil Company (KGOC) has issued the tender for the development of an onshore gas plant next to the Al-Zour refinery, according to industry sources.

    The project budget is estimated at $3.3bn, and the bid deadline is 29 December, with a meeting for contractors scheduled for 14 September.

    The tender was issued on 23 August.

    The proposed plant will have the capacity to process up to 632 million cubic feet a day of gas and 60,000 b/d a day of condensates from the Dorra offshore field, located in Gulf waters in the Saudi-Kuwait Neutral Zone.

    In February, MEED reported that at least seven companies had shown interest in participating in the tender.

    Contractors that sent representatives to previous meetings to discuss the project include:

    • Samsung E&A (South Korea)
    • Larsen & Toubro (India)
    • Tecnicas Reunidas (Spain)
    • Saipem (Italy)
    • Hyundai Engineering & Construction (South Korea)
    • Hyundai Engineering Company (South Korea)
    • JGC (Japan)

    The tender process is using a fast-track model, which means that Kuwait’s Central Agency for Public Tenders (Capt) will not be involved in the tender process.

    Capt typically reviews the technical and commercial evaluations of bids and verifies that the bidding process is competitive.

    It is understood that not requiring Capt to approve this tender is expected to speed up the tender process.

    Iran disputes ownership of the field, referring to it as Arash.

    Iran claims the field partially extends into Iranian territory and asserts that Tehran should be a stakeholder in its development.

    The Dorra field’s close proximity to Iran could make development difficult due to current security concerns.

    The offshore elements of the wider Dorra field development project are expected to be especially difficult to protect from attacks from Iran.

    Earlier this month, MEED revealed that Al-Khafji Joint Operations (KJO) had selected contractors for two major offshore packages under the Dorra field facilities development project.

    KJO, which is jointly owned by Aramco subsidiary Aramco Gulf Operations Company and Kuwait Petroleum Corporation subsidiary KGOC, has divided the engineering, procurement and construction (EPC) scope for the Dorra gas production project into four packages: three offshore and one onshore.

    US-based McDermott International has secured offshore package 2A, valued at about $1.5bn, according to sources.

    A consortium of India’s Larsen & Toubro Energy Hydrocarbon (LTEH) and Italian contractor Saipem has secured package 2B, sources told MEED.

    Estimated at about $3.7bn, package 2B is the largest of the three offshore EPC packages under the Dorra field facilities project.

    MEED reported in March that the LTEH/Saipem consortium had emerged as the lowest bidder for offshore package 2B.

    Contractors submitted bids for offshore packages 2A and 2B by the 9 March deadline, MEED previously reported. Bid validity was understood to expire on 15 August, prompting KJO to issue letters of intent to the selected contractors earlier this month, sources said.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18964461/main.png
    Wil Crisp