Maghreb rail sector heads for boom
5 July 2024
The Maghreb region is headed for a potential surge in railway scheme development, with upcoming projects worth tens of billions of dollars in pre-execution and set to swell the $7.6bn of rail schemes currently at the execution stage, according to regional projects tracker MEED Projects.
There are $18.5bn-worth of rail projects in prequalification or bid in Algeria and Morocco right now, led by an $11.2bn expansion of Morocco’s high-speed railway network.
Building on a $2.4bn stretch of high-speed rail between Tangier and Casablanca that was delivered in 2018, the expansion plans include a further $4.5bn-worth of line development between Kenitra and Marrakech and a $5.6bn line across the more mountainous terrain from Marrakech to Agadir.
Morocco’s rail prospects are also being boosted by the revival of the Spain-Morocco tunnel project.
In June 2023, the Spanish government revived plans for a Morocco-to-Spain undersea rail link project after allocating about $2.5m for a renewed design study. The project was first launched in 2003 but was put on hold after the 2008 financial crisis. It has undergone several rounds of feasibility studies but remains in the study stage after nearly two decades of funding-linked delays.
The plans involve a double-rail track with an additional service line stretching 38.5 kilometres (km) from Tarifa in Spain to Tangier in Morocco. The technically challenging scheme involves a 28km section running under the Mediterranean Sea at a maximum depth of 475 metres below sea level.
This is significantly deeper than the comparable Channel Tunnel between the UK and France, which at its deepest lies only 75 metres below the seabed and 115 metres below sea level.
In Algeria, there is meanwhile upwards of $5bn-worth of work in prequalification as part of the National Railway Programme being pursued by the country’s rail authority Anesrif, including a multibillion-dollar planned rail line to connect Oran on the northwest coast to the Algeria-Mali border.
There is also a significant volume of work in the design and study phases, including a $10bn electrification scheme announced by Algeria and due for prequalification in 2025 and award in early 2026 – a clear sign that Algiers is committed to delivering a modern public transport network.
Other planned rail modernisation and expansion schemes in the region include the Mohammadia-Mascara railway line in Algeria, the extension of Rabat-Sale light rail in Morocco and the extension of the Sfax light rail in Tunisia.
Ongoing projects
In terms of projects already under execution, the rail activity in the region is currently being led almost entirely by $7.4bn-worth of work Algeria. Many of the existing rail projects are long-standing ones, however, with the average duration of ongoing projects exceeding four-and-a-half years.
The value of new project awards in the rail sector in recent years has been subdued. In the past two years, there have been just $1.2bn of rail awards across the four countries of the Maghreb region.
The largest ongoing projects in Algeria are the Oued Tlelat-Akid Abbes railway line upgrade, the Tlemcen-Akid Abbes railway and the Tebessa-Ain M'lila railway line – the combined value of which is about $3.5bn.
In April, Anesrif also restarted the Relizane-Tiaret-Tissemsilt component of its $1.9bn East-West rail network expansion after a pause of several years and a change of contractors.
The contract with the previous group of contractors, which included Spain’s Fomento de Construcciones y Contratas (FCC) and local company Groupe ETRHB Haddad, was terminated.
In June, the client awarded a new $231m contract for lots one and two of the project to a consortium of local contractors, including EPTP Alger, GCB, Infrafer and Societe Algerienne des Ponts et Travaux d’Art.
Lot one includes works on the Relizane, Tiaret, Tissemsilt and Saida/Tiaret sections, spanning 10km. The remaining works are expected to be completed in 10 months. Lot two includes works on the Tiaret and Tissemsilt section, covering 63.5km, and will be due within 20 months.
Another major rail project under way in Algeria is the project to connect the Gara Djebilet iron ore mine in Western Algeria’s Tindouf province with the national rail network at Bechar.
In January, Algeria selected a team of Beijing-headquartered China Railway Construction Corporation and local contractor Cosider Travaux Publics for a contract to build a 575km railway line. The precise value of the project is unknown, but it could be worth $900m-$1.2bn.
In Tunisia, railway projects worth over $227m are in the execution phase. The biggest railway schemes under way include lots one and five of the country’s Rapid Rail Network. Morocco and Libya do not have any major railway schemes under execution, according to MEED Projects.
In general, with few significant projects awarded in the past two years, construction companies and rail sector suppliers will be eagerly awaiting the upcoming opportunities in the region.
If even a modest share of the large volume of work planned in Algeria and Morocco comes to fruition, contractors in the rail sector in the region could experience a boom.
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The new plant will cater to the water needs of Jeddah and Makkah Al-Mukarramah, especially during peak demand periods such as the Ramadan and Hajj seasons.
Saudi utility developer Acwa Power CEO Marco Arcelli said in a social media post that the company has begun producing “green” water from the new SWRO plant in Shuaibah following the decommissioning of the old MSF desalination plant there.
“We bid farewell to the first ever Acwa Power plant to jump into the future with one of the most efficient and green plants in the world, reducing power consumption by 87%, integrating 65MW of locally produced solar power, and bringing 22 million barrels of oil and 9 million tonnes of carbon dioxide annually to zero,” Arcelli said.
The old MSF-based plant was part of the first independent water and power project (IWPP) to be developed in Saudi Arabia when the government opened the market for private investment. It became operational in 2010.
Acwa Power, Shuaibah Water Electricity Company (Swec) and Saudi Water Partnership Company (SWPC) agreed to convert the water desalination component of the Shuaibah 3 IWPP into an SWRO plant in June 2022.
At the time, the stakeholders announced that “operations of Shuaibah 3 IWPP will cease in 2025, saving nearly 45 million tonnes of carbon dioxide emissions and 22 million barrels of light crude oil annually”.
A consortium led by Acwa Power and Public Investment Fund (PIF)-owned Badeel is developing the new facility, known as the Shuaibah 3 independent water project (IWP), at a cost of approximately SR3bn ($800m).
It will produce 600,000 cubic metres of water a day once complete.
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Read the April 2025 MEED Business Review MEED Editorial
3 April 2025
Download / Subscribe / 14-day trial access Governments in the Middle East and North Africa (Mena) region are digging deep to find solutions to the challenges posed by booming populations and rapidly growing cities. It is hoped that by expanding their underground infrastructure, major urban
centres such as Dubai, Riyadh and Doha can alleviate the mounting pressure that is being put on their existing transport and utility networks.
Subterranean transport projects, such as the high-profile Dubai Loop scheme being planned by the Roads & Transport Authority in partnership with Elon Musk's The Boring Company, or the recently completed metro systems in Riyadh and Doha, promise to tackle urban congestion and slash commute times. Meanwhile, through large-scale underground utilities schemes like the Dubai Strategic Sewerage Tunnels project, the traditional wastewater network can be upgraded without disturbing the existing cityscape.As a result, while governments globally are curtailing public infrastructure spending to reduce public debt, GlobalData has revealed that the Mena region has a tunnel construction pipeline worth $128.6bn.
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Although lower oil prices are expected to slightly dent revenues this year, Saudi Aramco is planning sustained capital expenditure and remains intent on projects to expand the production of high-value petrochemicals. Meanwhile, 2025 is expected to be a year of stable profitability for Saudi Arabia’s banks, and is set to be the busiest year ever for the power sector. Construction awards also remain up as Riyadh shifts its focus to delivering the infrastructure and transport projects that are needed for the kingdom’s hosting of upcoming international events.
This issue is also packed with analysis. We find out how BP’s planned $25bn investment in Iraqi oil fields will benefit Chinese contractors, round up the top five GCC data centre projects, look at why the rapid deployment of low-cost solar power is causing a surge in battery energy storage demand, and discover that Riyadh's need to diversify its sources of project financing has led to a sharp rise in the value of public-private partnerships in Saudi Arabia.
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> Traffic drives construction underground
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Abu Dhabi balances AI and net zero with $9.8bn infra spend Jennifer Aguinaldo
3 April 2025
Commentary
Jennifer Aguinaldo
Energy & technology editorAbu Dhabi National Energy Company (Taqa) and Emirates Water & Electricity Company (Ewec) have officially confirmed the scale of the power generation and grid infrastructure being planned to support the UAE capital’s artificial intelligence (AI) strategy.
The picture emerging from today’s announcement indicates a total investment of AED36bn, or roughly $9.8bn.
This includes the round-the-clock solar photovoltaic plus battery energy storage system project that Ewec and Abu Dhabi Future Energy Company (Masdar) announced in January, and which requires an estimated $6bn.
Today’s announcement said an advanced grid infrastructure project will account for 25% of the total investment, which equates to about $2.45bn. This implies that the build, own and operate contract for the Al-Dhafra open-cycle gas turbine (OCGT), which Taqa will 100% own, will require roughly $1.35bn.
The chosen energy infrastructure combination shows Abu Dhabi’s resolve to address the high energy density of the nascent AI sector and its commitment to achieving net-zero emissions in the long term.
These major investments provide a glimpse into the scale and urgency of Abu Dhabi’s AI ambitions.
In January, for instance, the government said it plans to deploy AED13bn for a three-year digital strategy to make Abu Dhabi the first government globally to fully integrate AI into its digital services by 2027.
The strategy includes achieving 100% adoption of sovereign cloud computing for government operations and digitising and automating 100% of processes to streamline procedures, enhance productivity and improve operational efficiency.
The strategy is projected to contribute AED24bn to Abu Dhabi’s GDP by 2027 while creating more than 5,000 jobs to support Emiratisation efforts.
Abu Dhabi-owned data centre operator Khazna Data Centres is also preparing for a major capacity expansion. Construction is under way for the state’s first 100MW data centre in Ajman.
In addition, UAE AI and technology fund MGX and US-based private equity investor Silver Lake recently acquired a minority stake in Khazna, while Abu Dhabi AI firm G42 remains the company’s majority shareholder.
A March meeting between US President Donald Trump and Abu Dhabi deputy ruler, Sheikh Tahnoon Bin Zayed Al-Nahyan, at the White House also highlighted Abu Dhabi’s unfolding AI pursuit.
The formation of a $25bn joint venture between Abu Dhabi’s ADQ and US-headquartered Energy Capital Partners (ECP) to build data centres in the US preceded that meeting.
However, in the minds of some observers, the real diplomatic objective of the UAE is to gain easier access to US-made graphics processing units (GPUs), which are vital to the successful implementation of its AI strategy.
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Taqa and Ewec sign Dhafra OCGT and grid contracts Jennifer Aguinaldo
3 April 2025
Abu Dhabi National Energy Company (Taqa) and state utility and offtaker Emirates Water & Electricity Company (Ewec) have signed a 24-year power-purchase agreement (PPA) to build, own and operate an open-cycle gas turbine (OCGT) project in Abu Dhabi.
The Al-Dhafra OCGT project will have a capacity of 1,000MW.
Taqa will own 100% of the project and undertake the operation and maintenance (O&M) of the plant, the firms said in a joint statement issued on 3 April.
MEED previously reported that the Italian original equipment manufacturer, Ansaldo Energia, will supply gas turbines for the project.
The project’s engineering, procurement and construction (EPC) contract is also expected to be formally awarded imminently to a team of South Korean and local contractors, according to industry sources.
In addition to the Dhafra OCGT project, Taqa Transmission, previously Transco, agreed to develop advanced power grid infrastructure to integrate the additional generation capacity to new sources of energy demand, enabling access to “reliable power with a low carbon footprint”.
According to Taqa and Ewec, both schemes will support the round-the-clock solar and battery energy storage system (bess) project, which Abu Dhabi Future Energy Company (Masdar) and Ewec announced in January.
Related read: Masdar meets renewable’s moonshot challenge
That project, comprising a 5.2GW solar photovoltaic (PV) plant and 19 gigawatt-hours bess plant, aims to deliver up to 1GW of “baseload” power from renewable sources “24 hours a day, seven days a week”.
These projects aim to advance the UAE National Strategy for Artificial Intelligence 2031 and the UAE Net Zero by 2050 initiative.
“The collaboration between Ewec, Taqa and Masdar will drive investment of around AED36bn ($9.8bn) in energy supply infrastructure in Abu Dhabi with around 75% of that to be invested in renewable and conventional power generation.
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The round-the-clock solar plus bess project is understood to require $6bn in investment, which implies that the BOO contract for the Dhafra OCGT is roughly $1.35bn.
The advanced grid infrastructure will account for the remaining $2.45bn.
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Australian firm wins Trojena dams subcontract Yasir Iqbal
3 April 2025
Australian firm Glaass has won a subcontract from Italian contractor Webuild for the Trojena dams project in Neom, Saudi Arabia.
In an official statement, the firm said its contract scope covers providing comprehensive quality, health, safety and environmental services for the project, which involves around 2,800 field workers.
Neom awarded Webuild a $5bn contract in late 2023. The deal covers the construction of three dams that will form a freshwater lake for the Trojena ski resort.
The main dam will be 145 metres high and 475 metres long at its crest. It will be built using 2.7 million cubic metres of roller compact concrete (RCC).
Some 650,000 cubic metres of RCC will be used to build a dam within the planned lake, creating an island below the water level.
The kidney-shaped dam will be 38 metres high and 700 metres long. It will be connected to the nearby Lake Village by an underwater tunnel. The landscaping and other attractions within the dam are known as the Enchanted Forest.
The third dam will be 65 metres high and 490 metres long at its crest. It will be constructed using 4.15 million cubic metres of rockfill. The works also include the lakebed line and the foundations for the Bow Building, a concrete structure at the end of the lake that will overhang the valley below and incorporate a hotel.
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MEED’s April 2025 report on Saudi Arabia includes:
> GOVERNMENT: Riyadh takes the diplomatic initiative
> ECONOMY: Saudi Arabia’s non-oil economy forges onward
> BANKING: Saudi banks work to keep pace with credit expansion
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
> CONSTRUCTION: Reprioritisation underpins Saudi construction
> TRANSPORT: Riyadh pushes ahead with infrastructure development
> DATABANK: Saudi Arabia’s growth trend heads uphttps://image.digitalinsightresearch.in/uploads/NewsArticle/13609655/main.gif