Read the January 2023 MEED Business Review

29 December 2022

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All eyes are on the Middle East’s property market after a dramatic reversal in fortunes over the past two years.

In mid-November, investors flocked to Dubai’s Coca-Cola Arena for the launch of Burj Binghatti Jacob & Co Residences, the world’s tallest residential building.

It was the clearest sign yet of a dramatic return to form for Dubai’s real estate sector.

Developments in Abu Dhabi continue to sell strongly, and in Bahrain, developers attending Cityscape in November said they were expecting good years ahead.

The biggest market, Saudi Arabia, may have seen its residential market cool in recent months due to higher interest rates, but commercial property continues to perform well and the overall outlook for real estate remains positive.

In the January issue of MEED Business Review, MEED editor Colin Foreman analyses why real estate in the region is here to stay, despite the ups and downs of the property cycle.

This month, we also reveal the region’s top 100 megaprojects – which, combined, account for $1.4tn in project value. Of this, more than $570bn is made up of project components that have moved beyond the study stage and are actively moving through the design, main contract bidding and execution phases.

The Top 100 ranking and analysis on increasing activity on oil and gas schemes and economic diversification initiatives, particularly in Saudi Arabia, can be accessed here. 

Our 15-page special report on Oman, meanwhile, finds that budget discipline has allowed Muscat to hugely improve the sultanate’s fiscal standing.

Most significantly over the past 12 months, Oman has garnered the interest of investors for its potential as a hydrogen generation and transmission hub, with planned hydrogen schemes in the sultanate valued at almost $80bn.

Must-read sections in the January 2023 edition of MEED Business Review include:

> AGENDA: Dubai real estate returns

> RIYADH 2KM-TALL TOWERSaudi tower tops GCC list of megatall structures

> ACQUISITIONAlec acquires Abu Dhabi contractor Target

> BIG INTERVIEW: Awaidha Murshed Ali al-Marar, chairman of the Abu Dhabi Department of Energy

> OPINIONEnergy challenges cloud 2023 outlook

MEED COMMENTS: 

    > Middle East rail sector has best year since 2013

    > Riyadh doubles down on Beijing relationship​​​​​

> SAUDI BUDGETRiyadh increases expenditure as projects take centre stage

> TOP 100 PROJECTS: Saudi Arabia ramps up project activity

> INTERVIEW: Harssha Shetty, CEO of Oman steel manufacturer Jindal Shadeed Group

> ENERGY TRANSITION: Hydrogen’s energy transition role is precarious

> TENDER INFLATION: Saudi construction faces rising costs amid optimism

> MEED INDEX: UAE leads the region in MEED’s Digital Transformation Index

> FOOD SECURITY: UAE food suppliers face global issues

> OMAN MARKET FOCUS: Oman restores the faith of investors

> MARKET SNAPSHOT: The region’s growing hydrogen economy

> GULF PROJECTS INDEX: Gulf projects market ends 2022 on positive note

> NOVEMBER 2022 CONTRACTSAwards fall off sharply in November

BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

To see previous issues of MEED Business Review, please click here

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Marianne Makdisi
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    "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:

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    •  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.

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  • 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)
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    • 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)
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    • Buhur for Investment Company (Saudi Arabia)
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    • 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.

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  • Dewa seeks firms for landfill gas energy project

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    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.

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

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    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).

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  • 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.

    Agenda:

    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.
     

    Speakers:

    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

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  • PIF and Acwa Power take on next solar round

    16 April 2024

     

    Saudi utility developer Acwa Power and sovereign wealth vehicle the Public Investment Fund (PIF) are discussing the fourth round of the renewable energy programme that is being implemented by the PIF.

    "We are now looking at the next round," Marco Arcelli, Acwa Power's chief executive, told MEED on the sidelines of the ongoing World Future Energy Summit (WFES) in Abu Dhabi.

    He declined to comment on the outage of one of the company's concentrated solar power plants in Morocco, which is expected to result in $47m of lost revenue for the firm.

    MEED previously reported that Acwa Power is working to reach financial close on three solar photovoltaic (PV) schemes with a total combined capacity of 4,550MW, as part of Saudi Arabia's National Renewable Energy Programme (NREP).

    In February, Acwa Power said the schemes "have satisfied the conditions precedent for senior loans drawdown".

    The next round under discussion by Acwa Power and the PIF is understood to have a similar capacity to the third round.

    The Riyadh-headquartered utility developer and its partner, Water & Electricity Holding Company (Badeel), signed the power-purchase agreements with Saudi Power Procurement Company to develop and operate the three projects in May 2023.

    The three projects, located in the central and northern regions of Saudi Arabia, are:

    • Al Rass 2: 2,000MW
    • Saad 2: 1,125MW
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    The projects are estimated to cost a combined SR12.8bn ($3.4bn).

    According to Acwa Power's recent bourse filing, the banks that agreed to provide senior debt financing of SR8.6bn ($2.3bn) for the projects include:

    • Banque Saudi Fransi (local)
    • HSBC (UK)
    • Mizuho Bank (Japan)
    • Riyad Bank (local)
    • Saudi Awwal Bank (local)
    • Saudi National Bank (local)
    • Standard Chartered Bank (UK)

    The financing duration is 27.75 years. The project debt financing amount is non-recourse to Acwa Power, which owns a 50.1% equity in the three projects.

    Its partner, the PIF subsidiary Badeel, owns the remaining 49.9% equity in the projects.

    MEED reported in June 2023 that the developer team expected to have the financing in place for the projects last year.

    The three projects take the number of solar PV contracts awarded by the PIF under the kingdom’s NREP to five.

    It awarded contracts for the development of the 1,500MW Sudair solar PV in 2021 and the 2,060MW Shuaibah 2 solar PV in 2022.

    The PIF is mandated to procure 70% of the NREP’s target capacity through the kingdom's Price Discovery Scheme.

    The PIF also owns 44% of Acwa Power.

    Based on MEED data, the three projects take the total number of solar PV contracts developed by an Acwa Power-led team in Saudi Arabia to 10. These projects have a total combined capacity of 10GW.


    MEED's April 2024 special report on Saudi Arabia includes:

    > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
    > BANKING: Saudi lenders gear up for corporate growth
    > UPSTREAM: Aramco spending drawdown to jolt oil projects
    > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector

    > POWER: Riyadh to sustain power spending
    > WATER: Growth inevitable for the Saudi water sector
    > CONSTRUCTION: Saudi gigaprojects propel construction sector
    > TRANSPORT: Saudi Arabia’s transport sector offers prospects

     

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