Five project megatrends to watch in 2023

4 January 2023


High oil prices, the journey to net zero and Cop28 in the UAE, property markets, Saudi gigaprojects and deepening regional integration will all be key themes in 2023 that will have a strong bearing on some of the region’s largest projects and programmes of construction work. 

These are five of the key megatrends to watch in 2023:

1. Neom

Neom will be a focus of attention for the global construction sector in 2023.

Announced by Saudi Crown Prince Mohammed bin Salman in 2017 with a project value of $500bn, the project arguably failed to live up to expectations following its launch as efforts focused on preparing concepts and designs with little onsite construction activity. 

That changed dramatically in 2022 as contractors signed major contracts across the project’s key components. One key development was the signing of construction contracts for the $6.5bn Neom green hydrogen project, which involves building a hydrogen-based ammonia production facility powered by renewable energy.

Other large construction contracts were signed for tunnelling works for The Line, which is a 170-kilometre infrastructure corridor with a highspeed rail system and two rows of interconnected 500-metre-tall-mirrored buildings. Crucially these contracts were won by joint ventures comprising some of the world’s leading names in construction, indicating a shift of opinion within the international community towards the project and its opportunities.

There are plenty more contracts to be tendered and awarded in 2023. There is high-level political pressure for progress to be made on the project, and last year the mountain resort of Trojena was selected to host the 2029 Asian Winter Games giving the project a hard deadline.

As onsite activity gathers momentum, Neom will finally deliver on its promise of being the region’s largest project by far.  

2. Hydrogen

Some say hydrogen will follow a similar story to the one experienced by solar power over the past decade, while others say it is reminiscent of the early days of liquefied natural gas (LNG).

The Middle East will play a leading role in deploying this relatively new technology following a slew of project announcements in recent years. The value of all announced hydrogen plants in the Middle East and Africa is now estimated to exceed $70bn. This total rises to more than $120bn if other elements, such as air separation units, export facilities and renewable energy complexes, are included. 

These projects are already resulting in contract awards for contractors, and as more schemes move into the construction phase, hydrogen will become an increasingly important industry for the region. 

3. Rail

Rail is back. After years of stalled projects, momentum has finally returned to the rail sector as regional governments press ahead with rail projects. 

The data shows the impact of these efforts. With $10.7bn of contract awards, 2022 was the best year for the region’s rail sector since 2013, according to data from regional projects tracker MEED Projects. 

READ MORE: Railway diplomacy

Even more encouraging is that headway is being made on planned projects expected to be tendered and awarded in the coming two years. The progress is across the region, but most noticeable in the GCC, where there has been a top-down drive to get the GCC Rail Project moving again following the Al-Ula declaration in 2021.

In 2022, design work started and progressed on a series of major rail schemes that should move towards tendering for construction contracts by the end of 2023. Once that happens, the region will be well on course to finally surpass its 2013 peak. 

4. Dubai real estate

Dubai’s property market was in rude health in 2022 with double-digit gains in values across multiple asset classes, including residential and commercial space. There was also a wide variety of new project launches, ranging from villa communities to tall towers and offshore islands (again).

The Covid-19 pandemic allowed Dubai to position itself as a home for the wealthy. Compared to other global cities such as London, New York, Paris and Hong Kong, property valuations in the emirate remain highly competitive, even after a year of strong growth. 

Prices are also still below the 2014 peak, which suggests the market has the potential to go even higher in 2023. Strong sales and rising prices due to limited supply have meant developers are launching new projects to satisfy demand. 

As projects become more daring and ambitious, a key question will be whether Dubai’s construction sector still has the appetite for major projects. Over the past five years, international players have left the market and, in 2020, the UAE’s largest general contractor, Arabtec Construction, filed for bankruptcy.

The plight of these companies is a reminder that Dubai’s property market is cyclical, and while there may be good times today, things may not be so good in the future. 

READ MORE: Real Estate Returns

5. Saudi nuclear

It takes years to prepare the regulations and designs for nuclear power plants. Saudi Arabia is no different. It has been pursuing its nuclear strategy since 2016. While progress may appear slow, experience from other markets has shown that nuclear power plants become significant undertakings once they move into construction. For example, the contract to build Abu Dhabi's nuclear reactors, signed by a South Korean consortium in late 2009, was valued at $20bn. 

In Saudi Arabia, preparatory work is proceeding for its nuclear power programme, which is being pursued with a three-pronged strategy. Most of the nuclear power capacity will be developed through conventional, large-scale nuclear facilities, such as the one being studied by major consultants.

READ MORE: Nuclear power's strategic importance grows

The kingdom also plans to develop atomic energy through a series of smaller, system-integrated modular advanced reactor technology (Smart) nuclear power plants. The third pillar involves mining uranium resources to fuel the plants, as highlighted earlier this year by the kingdom's energy minister.

In March 2022, it was reported that Saudi Arabia had established a holding company to develop nuclear power projects in the country. Also over the past year, the King Abdullah City for Atomic & Renewable Energy (KA-Care) awarded three separate contracts for the legal, technical and financial advisory works for the project.

As these plans progress towards the tender of contracts, contractors are preparing themselves for the construction phase. For example, in late 2021, MEED reported that local contracting company Nesma & Partnerships had signed a memorandum of understanding with France’s Bouygues Travaux Publics to jointly execute civil works for a potential nuclear power plant project in Saudi Arabia.
Colin Foreman
Related Articles
  • Ewec wants carbon-capture readiness for next gas power plant

    17 April 2024

    The request for proposals (RFPs) that will be issued for the next combined-cycle gas turbine (CCGT) plant in Abu Dhabi will explicitly require the developers or developer consortiums to accommodate the installation of carbon-capture facilities once they are commercially viable.

    "A key part of the RFP is to make a declaration that this project will be carbon-capture ready … that such facility will be installed as part of the project once carbon-capture solutions become commercially viable," Andy Biffen, executive director of asset development at Emirates Water & Electricity Company (Ewec), told the ongoing World Future Energy Summit in Abu Dhabi.

    As MEED previously reported, Ewec is considering issuing a tender in the next few weeks for its first gas-fired independent power producer (IPP) project since 2020.

    The greenfield Taweelah C gas-fired IPP is planned to reach commercial operation by 2027, according to a recent Ewec capacity procurement statement.

    "We understand that they might skip the expressions of interest and request for qualifications stage and directly invite qualified developers to bid for the contract," two sources familiar with the project previously told MEED.

    The planned Taweelah C gas-fired IPP is expected to have a power generation capacity of 2,457MW.

    Ewec awarded its last CCGT IPP nearly four years ago. Japan's Marubeni Corporation won the contract to develop the Fujairah F3 IPP in 2020.

    The state utility is considering new gas-fired capacity in light of expiring capacity from several independent water and power producer (IWPP) facilities.

    The plants that will reach the end of their existing contracts during the 2023-29 planning period include:

    •  Shuweihat S1 (1,615MW, 101 million imperial gallons a day (MIGD)): expires in June 2025
    •  Sas Al Nakhl (1,670MW, 95MIGD): expires in July 2027
    •  Taweelah B (2,220MW, 160MIGD): expires in October 2028
    •  Taweelah A1 (1,671MW, 85MIGD): expires in July 2029

    Ewec and the developers and operators of these plants are expected to enter into discussions before the expiry of the contracts to decide whether a contract extension is possible. Unsuccessful negotiations will lead to the dismantling of the assets at the end of the contract period.

    In 2022, MEED reported that Abu Dhabi had wound down the operation of Taweelah A2, the region's first IWPP. The power and water purchase agreement supporting the project expired in September 2021 and was not extended.
    Jennifer Aguinaldo
  • Flooding puts spotlight on Dubai construction quality

    17 April 2024

    Colin Foreman

    The storm that engulfed Dubai on 16 April and the resulting flood damage will raise questions about the quality of construction in the emirate.

    Videos of extensive flood damage to property and infrastructure have been widely shared across social media, and those personally affected have questioned why the damage was so severe.

    There is not one single answer. The storm was said to be the most severe to have hit Dubai for decades, and some have described it as a 100-year storm. One other theory widely circulated during the day about it being caused by cloud seeding has been officially dismissed by the government.

    With such extreme weather, most will accept that some damage is inevitable. The question will be whether elements of the damage could have been prevented, which is where questions over construction quality will emerge.

    The two main concerns will be why buildings are not better waterproofed and infrastructure is not more effectively drained.

    Each flooding incident will have its own specific issues, but the reasons will come from three key areas: design, construction and maintenance. 

    Many projects will not have been designed to cope with such a deluge. Others will have been poorly constructed, allowing water to ingress into properties, and others will have drainage that was poorly maintained and failed when it was most needed.

    Dubai is heavily incentivised to address these concerns. In the past, Dubai has been a transient city with many expatriates living and working in the emirate for only a few years. There has been little collective memory of major weather incidents.

    As the emirate establishes itself as a permanent home for more people, including many property owners, that memory will now remain. Those memories may be painful today, but they will help guard against such severe damage in the future.
    Colin Foreman
  • Abu Dhabi tenders 1.5GW Khazna solar contract

    17 April 2024


    State utility Emirates Water & Electricity Company (Ewec) has issued the request for proposals (RFP) for a contract to develop and operate the UAE capital's fourth utility-scale solar photovoltaic (PV) project.

    The planned Khazna solar independent power project (IPP), also known as PV4, will have a capacity of 1,500MW.

    It will be located in Khazna, between Abu Dhabi and Al Ain, and is expected to reach commercial operation by 2027.

    Ewec expects to receive bids for the contract "in the third quarter of 2024".  

    The state utility prequalified nine companies and consortiums as managing members and another 10 that can bid as consortium members.

    Parties or companies that are prequalified as managing members are free to bid either individually or as part of a consortium. These include:

    • Acwa Power (Saudi Arabia)
    • EDF Renewables (France)
    • International Power (Engie, France)
    • Jera Company (Japan)
    • Jinko Power (China)
    • Korea Electric Power Corporation (Kowepo, South Korea)
    • Marubeni Corporation (Japan)
    • Sumitomo Corporation (Japan)
    • TotalEnergies Renewables (France)

    The following companies can bid as part of a consortium with a managing member: 

    • Al Jomaih Energy & Water (Jena, Saudi Arabia)
    • Avaada Energy (India)
    • Buhur for Investment Company (Saudi Arabia)
    • China Machinery Engineering Corporation (China)
    • China Power Engineering Consulting Group International Engineering Corporation (CPECC, China)
    • Kalyon Enerji Yatrimlari (Turkey)
    • Korea Western Power Company (Kowepo, South Korea)
    • Orascom Construction (Egypt)
    • PowerChina International Group
    • SPIC Huanghe Hydropower Development (Spic, China)

    Ewec's PV1, or Noor Abu Dhabi, has a capacity of 935MW and has been operational since 2019.

    PV2, the 1,584MW Al Dhafra solar IPP, was inaugurated in November 2023. 

    Ewec is understood to have recently awarded the contract to develop PV3, the 1,500MW Al Ajban solar IPP, to a team led by French utility developer EDF Renewables and including South Korea's Korea Western Power Company (Kowepo).

    Ewec said solar energy is integral to achieving its target of producing nearly 50% of its electricity from renewable and clean energy sources by 2030.

    This is due to its "low generation cost and its contribution to reducing carbon dioxide (CO2) emissions from the electricity generation process".

    Like the first three schemes, Khazna solar PV will involve the development, financing, construction, operation, maintenance and ownership of the plant and associated infrastructure.

    The successful developer or developer consortium will own up to 40% of the entity, while the Abu Dhabi government will retain the remaining equity.

    The developer will enter into a long-term power purchase agreement with Ewec.

    Once fully operational, Khazna solar PV, along with Noor Abu Dhabi, Al Dhafra solar PV and Al Ajban solar PV, will raise Ewec's total installed solar PV capacity to 5.5GW and collectively reduce CO2 emissions by more than 8.2 million metric tonnes a year by 2027. 

    UAE-wide target and capacity

    The UAE published its updated national energy strategy in July last year. It includes a plan to triple the nationwide renewable energy capacity to 19GW by 2030.

    The total installed renewable energy capacity of both Ewec and Dubai Electricity & Water Authority (Dewa) stood at about 5.5GW at the start of 2024.
    Jennifer Aguinaldo
  • Dewa seeks firms for landfill gas energy project

    17 April 2024

    Dubai Electricity & Water Authority (Dewa) has started the process of selecting a developer or developer consortium to build and operate a landfill gas-to-energy project in Al Qusais, in the eastern part of Dubai near the border with Sharjah.

    It has requested expressions of interest from companies, which it expects to receive by 24 April.

    The planned project will be developed on an independent power producer (IPP) basis and will have an estimated electricity generation capacity of 6MW-12MW. 

    Dewa added that the project's precise capacity will depend on generation efficiency.

    Landfill gas extracted from the Al Qusais landfill site will power the generation plant. The gas extraction network is outside the scope of the package and will fall under the responsibility of another government agency, Dubai Municipality.

    Dewa said a guarantee will be provided on minimum gas quantities and quality.

    Dewa will purchase the power generated by the plant from the successful developer or developer consortium under a long-term power purchase agreement.

    Dewa added: "The developer is expected to share ownership of a project company, to be incorporated in accordance with Dubai and UAE laws, with Dubai Green Fund, the first specialised green investment fund in [the Middle East and North Africa], launched under the funding pillar of the Dubai Clean Energy Strategy 2050."

    In February, Dewa and Abu Dhabi Future Energy Company (Masdar) reached financial close on the 1,800MW sixth phase of the Mohamed Bin Rashid Al Maktoum Solar Park in Dubai.

    The solar photovoltaic IPP project is expected to cost up to AED5.51bn ($1.5bn).

    The state utility does not intend to procure additional natural gas-fired capacity in the future.
    Jennifer Aguinaldo
  • An audience with Diriyah: The $63bn gigaproject opportunity

    16 April 2024

    Register now

    Hear first-hand from Diriyah Company about one of the world's most iconic projects and how your company can participate in its existing and future procurement opportunities.

    This exclusive event will provide a detailed outlook into Diriyah’s development plans and the transformation of ‘The City of Earth’ under the Saudi 2030 Vision.

    Gain key insights into available future procurement opportunities, how to work with Diriyah Company on its extensive project pipeline, and how to register and prequalify to participate in it.


    1. The Saudi Arabia projects market in context – size, key projects, trends and future outlook

    2. A detailed overview of the Diriyah gigaproject, its masterplan, progress and the more than $10.5bn-worth of construction work awarded to date

    3. Key details of the $50bn+ projects pipeline including specific procurement opportunities, future materials and equipment demand, and how companies can register and help deliver the iconic giga development

    4. An in-depth discussion with Diriyah Company on its requirements, vendor registration and procurement processes, and contracting frameworks

    5. A live Q&A session where you will have the opportunity to ask questions directly to Diriyah Company

    Time: Monday 22 April at 02:00 PM GST

    Hosted by: Edward James, head of content and analysis at MEED

    A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemical market. He is considered one of the world’s foremost experts on the Mena projects market.


    Andrew Tonner, chief delivery officer, Diriyah Company

    Andrew Tonner is the chief delivery officer at Diriyah Company, with 35+ years of property development and construction experience.   One of the first arrivals to the Diriyah Project in 2019, Andrew is now into his second spell with the company. He is currently responsible for construction delivery across 4 masterplans with a combined value of c $62 bn covering 75 km2. See more

    Mohamed Thabet, commercial executive director, design and development, Diriyah Company

    Mohamed Thabet serves as the executive director of DevCo's commercial team. With a background in architecture and advanced studies in construction law, Mohamed brings a wealth of experience in managing complex construction contracts. His career spans roles in engineering, management firms and development, providing him with a comprehensive understanding of the construction industry supply chain. See more

    Click here to register
    MEED Editorial