Fiscal deficit pushes Kuwait towards reforms
7 August 2024

The poor state of Kuwait’s public finances was laid bare in late July, when the Ministry of Finance announced it had run up a deficit of KD1.6bn ($5.2bn) for the fiscal year ending on 31 March.
A year earlier, the government had booked a rare budget surplus, following eight straight years in the red, but it seems unlikely that it will be able to return to a surplus any time soon. A combination of lower oil revenues, rising spending commitments and an underpowered non-oil sector means the strain on the public purse is rising rather than falling.
The main culprit for the recent budget shortfall was a 19% drop in oil revenue to KD21.5bn. Non-oil income rose by a little over 1% year-on-year, but at just KD2.1bn it remains a marginal element of the state’s finances.
Even as overall revenues were falling, state spending increased by around 13% to KD25.2bn. The vast majority of that – KD20.4bn – went on public sector wages and subsidies. Capital expenditure accounted for just 8% of the total, at KD1.9bn.
The outcome for the past year was, though, better than some had expected. The local NBK Capital, for example, had predicted a KD3bn deficit. Even so, it highlights how the economy remains almost entirely dependent on oil revenues and, by extension, how ill-prepared Kuwait is for a global transition away from hydrocarbons.
While other Gulf governments have been investing heavily in renewable energy projects and seeking to diversify their economies, Kuwait has made negligible progress in these areas.
Structural stagnation
The deficits of the past decade have dealt a significant blow to other elements of the country’s financial health. Speaking at the General Budget Forum in Kuwait in mid-July, Finance Minister Anwar Al-Mudhaf said the assets of the State Reserve Fund had fallen to just KD2bn, down from KD33.6bn a decade earlier.
The persistent failure of the government to push legislation through parliament allowing it to issue more debt has meant that savings have been steadily depleted to cover the budget deficits. The current trend is clearly unsustainable.
Ministry of Finance undersecretary Aseel Al-Munaifi told the same event on 14 July that the size of the budget deficit in the coming years would vary depending on oil prices, but predicted it could total KD26bn over the four years from 2025/26 to 2028/29 – far more than is left in the State Reserve Fund.
Falling oil revenues have also contributed to declines in the country’s GDP. The Washington-based IMF estimates it fell by 2.2% in 2023 and could drop by another 1.4% this year.
Amid all these problems, there have been a few positive signs. Annual inflation eased to 2.8% in June, its lowest level since November 2020, helped by softer prices for food, housing, utilities and transport. UK-based consultancy Oxford Economics predicts it should now stabilise, with a forecast of 2.9% in the coming year.
Kuwait Oil Company also announced a major discovery on 14 July, with an estimated 2.1 billion barrels of light oil and 5.1 trillion cubic feet of gas found at the offshore Al-Nokhatha field. More oil reserves will do little to change the economic climate of the country though, particularly when production levels are voluntarily capped under the Opec+ deal.
Controlling spending
The government of Prime Minister Sheikh Ahmed Abdullah Al-Salah appears to have recognised the need for a more fundamental change in direction, with Al-Mudhaf indicating that more will be done to keep spending under control.
The Ministry of Finance has pencilled in spending of KD24.5bn for the current fiscal year – against revenues of KD18.9bn, meaning a deficit of KD5.6bn. The finance minister has said the government is aiming to keep expenditure at the same level through to 2027/28.
That will be contentious though and may require more political resolve than the government is able to muster. On the other hand, it will find it easier to take unpopular action now than in the past, given the decision by Emir Sheikh Mishaal Al-Jaber Al-Ahmed Al-Sabah in May to suspend the National Assembly for up to four years, thereby removing a significant block to policy reforms.
The government may also now decide the time is right to follow most of its GCC neighbours and introduce VAT – more than six years after it was introduced in the UAE and Saudi Arabia – or other measures such as corporate income tax or ‘sin taxes’ on tobacco and sugary drinks. Such a move could provide a significant boost to non-oil revenues.
“I have been dubious about the prospects of substantial fiscal measures being implemented during the current period while parliament is suspended, given the risk that this would be unpopular and viewed as illegitimate, but the minister’s presentation seems to lay the groundwork for reforms,” said Justin Alexander, director of Khalij Economics.
If the government is to successfully limit its spending over the coming years, it will also need activity to pick up in the private sector, not least to provide more jobs for locals. At the moment, the vast majority of Kuwaitis who are in work are employed by a public sector entity.
The most recent employment market data showed job growth among Kuwaiti nationals of 3.2%, but as NBK Capital pointed out in a report on 23 July, “this was due to a gain in public sector jobs, while private sector employment fell”. Just 15% of working Kuwaitis have jobs in the private sector. Indeed, the public sector wage bill rose by 12% in the most recent financial year.
Al-Mudhaf noted in his comments to the General Budget Forum that public sector salaries are now equivalent to around 30% of Kuwait’s GDP, compared to 7-13% in other GCC states. Among other things, he blamed undisciplined hiring and weak performance evaluations for the rising wage bill.
The situation could get worse before it gets better. Alexander noted that “the expectation is that the pending reforms to equalise employment grades across the public sector will boost salary costs even further”.
Exclusive from Meed
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Kuwait utilities investment shifts towards water11 August 2026

China State Construction Engineering Corporation recently signed a contract for Kuwait’s North Kabd wastewater treatment plant, the country’s largest wastewater infrastructure project to date.
The award, following more than a decade of planning, propelled Kuwait’s water sector contract awards to more than $4bn as of early August, according to regional project tracker MEED Projects.
The facility will have a treatment capacity of up to 1 million cubic metres a day (cm/d), with the $3.3bn contract covering the design, construction, operation and maintenance of the plant over a 10-year period.
It marks a significant recovery for the sector after several years of subdued activity and the first time since 2020 that annual water awards have exceeded $1bn.
North Kabd is the largest of several major water projects awarded this year, alongside contracts covering desalination and the expansion and rehabilitation of water distribution infrastructure.
Desalination and distribution
These include a $316m contract awarded to local firm United Gulf Construction (UGC) by the Ministry of Electricity, Water & Renewable Energy (MEWRE) for the rehabilitation and expansion of the Doha water distribution complex.
The five-year project includes a new pump station and will add about 130 million imperial gallons of storage capacity, while increasing pumping capacity to 220 million imperial gallons a day (MIGD).
UGC was also selected in February to upgrade the Hawally water distribution complex in Kuwait’s Hawalli Governorate. The facility serves one of Kuwait’s most densely populated governorates, with the project intended to address chronic low water pressure, particularly during peak summer demand, and improve continuity of supply.
The upgrade will increase freshwater storage capacity by 66 million gallons and raise potable-water pumping capacity to 54.5 million gallons a day.
In April, Kuwait’s Central Agency for Public Tenders approved MEWRE’s recommendation to award a $371m contract for phase two of the Doha seawater reverse osmosis (SWRO) desalination plant.
A joint venture of Kuwait-based Heavy Engineering Industries & Shipbuilding Company (Heisco) and India’s VA Tech Wabag will carry out the project, which will have a capacity of about 272,000 cm/d.
Upcoming water awards
Meanwhile, Kuwait’s Ministry of Public Works (MPW) has been progressing several tenders for major water infrastructure projects covering rainwater drainage and treated water systems in the country’s southern and northern regions.
In July, local Combined Group Contracting submitted the lowest bid for a contract to develop a major treated water system in the southern region. The contractor submitted a price of about $515m for the scheme, according to a company disclosure.
For the smaller northern treated water system, Contractor General Trading & Contracting submitted the lowest bid of $169m.
In what is already a standout year for Kuwait’s water sector, further awards could push activity significantly higher. More than $1bn of water projects are currently under bid evaluation, indicating further evidence of a sustained recovery in the months ahead.
Power sector activity
Kuwait’s power sector recorded just $271m of contract awards by early August, according to MEED Projects, putting activity well below recent annual levels.
This compares with a record full-year total of $5.5bn in 2025 and $2.7bn in both 2024 and 2023.
Several large-scale generation projects have been slow to advance, with deadline extensions a notable feature in recent months. The outlook is stronger, however, with these projects now progressing through procurement and significant awards expected in the months ahead.
Kuwait is advancing the 1,800MW Al-Khairan phase one independent water and power project (IWPP), for which two developer consortiums led by Abu Dhabi National Energy Company (Taqa) and Saudi Arabia’s Acwa submitted bids in June.
The project will also include a desalination plant with a capacity of 125 MIGD. A second phase of the Al-Khairan IWPP, estimated at $750m, is understood to include a further 1,800MW of generation capacity through a combined-cycle gas-fired power plant. The project remains in the early development stages, with tendering not expected until at least 2027.
Renewable energy programme
The Kuwait Authority for Partnership Projects (Kapp) is also progressing the Al-Dibdibah power and Al-Shagaya renewable energy programme in partnership with Kuwait’s MEWRE.
The contract to develop the 1,100MW phase three, zone one solar photovoltaic (PV) project is expected to be confirmed soon, with a consortium led by Abu Dhabi Future Energy Company (Masdar) previously reported to be the frontrunner.
A separate 500MW solar PV project is also being procured under phase three, zone two of the same programme, with bids submitted on 26 July. If the contract is awarded by the end of the year, the two Shagaya contracts would add about $2bn to the value of power sector awards.
Another notable development was the 25-year energy conversion and water purchase agreement signed in February for the Al-Zour North IWPP phases two and three. The signing marked a key step towards financial close on the estimated $4bn project. Once completed, the facility will add 2,700MW of power and 120 MIGD of desalinated water to Kuwait’s supply network
The Shagaya, Khairan and Zour North projects form a key part of Kuwait’s generation portfolio. The country is aiming to reach 22,100MW of installed renewable energy capacity by 2030, under a 20-year strategy announced in March 2025 that extends to 2050.
Kuwait is also continuing to invest in existing generation plants. MEWRE is evaluating bids for the $1.7bn upgrade of the Subiya power and water plant, including the conversion of units from open-cycle to combined-cycle operation and the modernisation of existing facilities.
Battery energy storage systems
In the near to medium term, more than $10bn-worth of power projects are under bid evaluation. This includes several battery energy storage system projects with a planned total storage capacity of 1.5GW.
In June, Kuwait approved sites in Al-Mutlaa and Jaber Al-Ahmad cities for the development of the projects. The projects will be implemented in phases, with the first phase providing 500MW of storage capacity. The first facilities are expected to be operational by summer 2027 and will supply stored energy to the electricity grid during periods of peak demand.
Elsewhere, MEWRE continues to evaluate offers from Shanghai Electric Group and local firm Heavy Engineering Industries & Shipbuilding Company (Heisco) for the estimated $400m engineering, procurement and construction contract to rehabilitate and modernise eight boilers at the Subiya power generation and water distillation station. The bid bond validity has been extended to 23 August, indicating that the procurement process remains ongoing.
MEED’s September 2026 report on Kuwait also includes:
> ECONOMY: Kuwait shows tentative signs of economic development
> BANKING: Necessity is the mother of invention for Kuwaiti lenders
> OIL & GAS: Regional war to have lasting impact on Kuwaiti oil sector
> CONSTRUCTION: Kuwait construction holds up despite regional strifehttps://image.digitalinsightresearch.in/uploads/NewsArticle/18333042/main.gif -
Syrian court gives death penalty to Bashar Al-Assad11 August 2026
A Syrian court has sentenced former president Bashar Al-Assad to death after trying him in absentia, convicting him of crimes committed during the country’s nearly 14 years of civil war.
It is the first such ruling under Syria’s transitional authorities, who ousted Al-Assad in December 2024 and vowed justice and accountability for crimes committed under his rule.
Al-Assad fled to Moscow as Islamist-led forces closed in on Damascus after a lightning offensive.
In a Damascus court, Judge Fakhr Al-Din Al-Aryan convicted Al-Assad of crimes including “premeditated murder, the intentional killing of more than one person, the intentional killing of children under 15 years … torture, torture leading to death, and deprivation of liberty on multiple occasions” — acts the court classified as crimes against humanity and war crimes.
“He is therefore sentenced to death,” the judge said in his ruling.
The court also sentenced six former military and security officials to death in absentia, including Al-Assad’s brother Maher, who ran the army’s elite Fourth Division and also fled the country.
Those convicted included former defence minister Fahd Al-Freij and Louay Al-Ali, who headed military intelligence in Daraa province in 2011.
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The officials were convicted of crimes including murder, incitement to murder, torture leading to death and repeated deprivation of liberty, also classified as crimes against humanity and war crimes.
Former security official Atif Najib – the only defendant tried in person – was also sentenced to death for crimes against humanity committed while he headed political security in Daraa province, the cradle of the country’s 2011 uprising.
Najib, a cousin of Al-Assad who was arrested in January last year, was convicted of crimes including murder, the intentional killing of children under 15 and torture leading to death.
The acts attributed to him are “crimes against humanity”, the court said as it handed down “the harshest punishment … which is the death penalty”.
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Syria began proceedings in April against Al-Assad and other officials, accused both in person and in absentia of atrocities during the civil war, which erupted after the former authorities’ brutal repression of pro-democracy protesters.
More than half a million people were killed and millions displaced, while tens of thousands disappeared, many into the country’s brutal prison system.
The uprising began in Daraa in March 2011 after 15 students were arrested for allegedly writing anti-government slogans on the city’s walls.
Residents said the students were tortured, prompting protests demanding their release that ended in bloodshed.
Security forces suppressed demonstrations and fired live ammunition to disperse sit-ins at several locations.
Najib was dismissed after the crackdown as protests spread to other provinces.
Judge Al-Aryan said Najib had denied the charges and shown “no remorse”.
Al-Assad took power in Syria in 2000 in an unopposed election following the death of his father, Hafez Al-Assad, who was president from 1971.
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Oman extends deadline for $150m water transmission project11 August 2026

State-owned Nama Water Services (NWS) has extended the bid submission deadline for a contract to build a $150m water distribution network project in Jalan Bani Bu Ali Wilayat in Oman’s South Sharqiyah Governorate.
The new deadline is 24 August. The original deadline was 17 August.
The engineering, procurement and construction (EPC) contract covers the development of water distribution infrastructure in the JBBA North and JBBA Coastal areas.
The scope includes new water storage reservoirs, elevated tanks, booster pump stations and transmission and distribution pipelines.
The project includes two reservoirs in the JBBA North area with a capacity of 40,000 cubic metres, along with about 58 kilometres of ductile iron distribution pipelines and 343km of high-density polyethylene (HDPE) pipelines.
The JBBA Coastal works include reservoirs at Asilah, Ashkarah, Wadi Sal and Khabbah, as well as elevated tanks and pump stations. The scope also includes about 38.5km of 400mm-diameter ductile iron transmission pipeline.
NWS issued the main contract tender on 4 June. UK-headquartered Mott MacDonald is the main consultant on the project.
The project is one of three water distribution schemes being tendered under a wider $350m masterplan covering Jalan Bani Bu Hassan, Jalan Bani Bu Ali, and Al-Kamil and Al-Wafi wilayats.
The Jalan Bani Bu Hassan scheme includes a new 40,000-cubic-metre ground reservoir at Al-Sayah Al-Sharqi 4, a pump station and associated transmission and distribution pipelines. It will also include a pump station serving the Industrial Area and an inline booster pump station supplying Al-Mintajjah and Sariq Haryah.
The projects covering Jalan Bani Bu Ali and Al-Kamil and Al-Wafi wilayats are estimated to cost £100m each. The bid submission deadline for both projects is 17 August.
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Medina invites bids for major stormwater project11 August 2026

Saudi Arabia’s Madinah Municipality has issued a tender for an engineering, procurement and construction (EPC) contract to upgrade the city’s rainwater drainage network.
According to regional project tracker MEED Projects, it is the first main contract tender the municipality has issued for a major water infrastructure project since 2022.
The $30m project covers the construction of rainwater drainage networks and the repair of existing stormwater pipelines across major roads and corridors within the urban area of Medina.
It aims to improve the performance of the city’s stormwater drainage system, reduce surface flooding, and protect roads and nearby assets during heavy rainfall.
The bid submission deadline is 5 September.
According to MEED Projects data, Madinah Municipality completed two rainwater drainage network projects in Medina in 2024.
The local Al-Ayuni Investment & Contracting was the EPC contractor for both Phase 1 and Phase 2 projects. Saudi contractor Azmeel Contracting also previously submitted bids for both projects.
The municipality is also understood to be nearing completion of a separate Phase 1 rainwater drainage network project in Al-Rawabi in Al-Madinah province. This project was tendered in 2022 and awarded to Al-Naeim Contracting (Saudi Arabia) in 2023.
Meanwhile, Madinah Municipality received prequalification documents at the beginning of the year for two stormwater drainage projects in Yanbu. It is unclear if the main contract tender will be issued this year.
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Adnoc Gas expects Habshan to hit full capacity in 202711 August 2026
Adnoc Gas hopes to restore full output capacity at its Habshan gas processing facility in Abu Dhabi by the second quarter of next year, following attacks on the facility in March and April during the US-Iran conflict.
Adnoc Gas, the natural gas processing business of Abu Dhabi National Oil Company (Adnoc Group), said it has already restored 85% of the Habshan facility’s capacity, surpassing the year-end target set in May.
The Habshan complex is one of the largest gas processing facilities in the UAE and the wider Middle East and North Africa region. It has a processing capacity of 6.1 billion cubic feet a day. The complex comprises five trains and 14 processing units that receive gas feedstock from onshore and offshore fields in Abu Dhabi.
The Habshan facility was struck at least three times in March and April by Iranian drones and missiles. On 19 March, UAE authorities suspended operations at Habshan after it was affected by debris falling from Iranian missiles intercepted by the country’s air defence systems.
Adnoc Gas then announced on 23 March that operations were continuing safely across its asset base, after similar missile and drone attacks by Iran on facilities owned by its parent, Adnoc Group, although it did not specifically mention the Habshan plant.
The worst of the attacks on Habshan took place on 3 April, when Iranian drones intercepted by the UAE’s air defence systems caused damage at the site, resulting in the death of an engineer working at the facility for Egyptian contractor Petrojet during an evacuation. Four other contractors sustained minor injuries, but were later discharged from hospital after receiving treatment.
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On 8 April, Abu Dhabi authorities said three people – two Emiratis and an Indian national – sustained minor injuries after debris fell at the Habshan gas complex following a successful interception by the UAE’s air defence systems.
The debris also sparked several fires at the facility, prompting a temporary suspension of operations as safety and response teams assessed the situation.
“Adnoc Gas responded swiftly to the security-related incidents at the Habshan site on 3 and 8 April, prioritising safety and minimising disruptions to customers,” the company said on 10 August.
“The company has concluded its technical assessment of the impact from these incidents and recovery has progressed ahead of schedule, with gas supply already restored to 85%,” Adnoc Gas said as part of its announcement of financial results for the second quarter of 2026.
During a press conference to discuss Adnoc Gas’ Q2 2026 results, Peter Van Driel, the company’s chief financial officer, said: “At the moment, we have progressed to 85% of supply being reinstated, so the balance will be reinstated between now and the first half of 2027.
“If I look at the cost impact, we are still firming up our estimates. There are uncertainties around the pricing of certain items that we need to install as part of the final reinstatement.
“If we look at the key driver for our results in the second half, the 85% reinstatement of supply is definitely important. We’re encouraged by the fact that the 85% was delivered ahead of schedule,” Van Driel told journalists.
Fatema Al-Nuaimi, Adnoc Gas’ CEO and board member, said: “If I may add one point: it might be 85%, but in reality, today we are supplying 100% of our customers’ requirements locally.”
She added: “On exports, of course, we try our best to satisfy requirements and work closely with customers. But in terms of gas supply to the UAE, we are at 100%.”
Role of robotics and AI
Responding to a question about the deployment of robotics and artificial intelligence (AI) to carry out damage assessment and repair work at the Habshan gas processing facility, Al-Nuaimi said: “One of the technical challenges in restoring the facilities quickly was that we had to inspect a significant part of our assets – some 600 kilometres of piping of different sizes across the facilities.
“If we had done this in the conventional way, we would have spent around 100 additional days putting up scaffolding and sending people to conduct manual and visual inspections.”
The CEO continued: “Instead, we used robotics supported by AI-driven software, which enabled us to shorten the inspection and response time and carry out repairs faster.
“It was not just about time; it was also about safety. It spared us from sending our people into critical areas that might not yet have been safe.”
She added: “We also used robotics in responding to fires and accessing certain parts of the assets.
“When we talk about AI, it is not a headline. It is real work and real value that we see every day in our business,” Al-Nuaimi further remarked.
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