meed-logo

line1 line2 line3
SIGN IN / REGISTER

Mena power rides high into 2024

29 December 2023

 

The Middle East and North Africa (Mena) region’s power generation and transmission sector awarded an estimated $25.3bn-worth of contracts between January and November 2023.

While this pales in comparison to the record high of $37.7bn awarded in 2015, it is up 38 per cent on the previous full year 2022, according to MEED Projects.

Year-on-year, the value of awarded power generation contracts increased by 40 per cent to reach $19bn, outperforming the transmission sub-sector growth by nine percentage points.

Saudi Arabia accounted for 60 per cent of the awarded power contracts in 2023. These include the contracts to develop four independent power projects (IPPs) that use combined-cycle gas turbines (CCGT), the first to be procured since the kingdom awarded the contract to develop the 1,500MW Al-Fadhili IPP to France’s Engie in 2016.

The Taiba 1 and 2 and Qassim 1 and 2 IPP projects each have a generation capacity of 1,800MW and require a combined investment of $7.8bn, of which roughly 80 per cent is accounted for by engineering, procurement and construction (EPC) costs.

The kingdom also awarded an EPC contract for the 1,200MW expansion of a power plant complex in Jubail during the year.

On the renewable energy front, the principal buyer, Saudi Power Procurement Company (SPPC), and the Public Investment Fund awarded some 6.7GW of solar photovoltaic (PV) IPP projects.

The uptick in awards marks a major improvement after a year of tepid renewables project activity in 2022, barring the solar and wind farm projects being developed as part of the large-scale green hydrogen and ammonia project in Neom.

The transmission and distribution sub-sector contributed to Saudi Arabia’s sterling market performance this year, delivering contracts worth over $3.5bn.

The kingdom’s electricity grid is expected to continue to be upgraded to accommodate growing renewable energy capacity and the rise in electricity demand as Vision 2030-related projects enter the execution phase.

The plan to accelerate electricity trade with its GCC neighbours and other countries in the region, such as Egypt and Iraq, is also anticipated to encourage future grid investments. 

The award of the $2bn multi-utilities package for the Amaala development project also stood out, not least due to the inclusion of a 700 megawatt-hour battery energy storage system to enable the hotels within the development to be completely off-grid.

Unlike in the previous two years, Kuwait, the UAE and Oman also tendered or awarded substantial power generation contracts in 2023.

Nama Power & Water Procurement Company awarded the contracts to develop the second and third utility-scale solar PV schemes in the sultanate, Manah 1 and 2, each with a capacity of 500MW, in the first half of the year.

In September, Dubai Electricity & Water Authority awarded the contract to develop the sixth phase of the Mohammed bin Rashid solar complex.

Looking forward

The Mena power sector is expected to maintain its momentum into 2024, if the final quarter of 2023 is anything to go by.

Saudi Arabia is likely to continue dominating power project activities, with other states such as the UAE, Oman, Morocco, Egypt, Kuwait and Qatar offering significant opportunities for developers and EPC contractors.

Saudi Arabia’s SPPC has held a market-sounding event for the four solar IPPs under the fifth round of the kingdom’s National Renewable Energy Programme (NREP), while bid evaluation is still under way for the three wind IPPs under the NREP’s round four.

The tender documents are also being prepared for two CCGT projects in Riyadh, PP15 and Al-Khafji, with each expected to have a capacity of 3.6GW.

Qatar and Kuwait are advancing the procurement process for independent water and power producer (IWPP) projects that were held back over the past few years.

Abu Dhabi has initiated the procurement process for its fourth solar PV IPP and first twin battery energy storage facilities. 

It will also almost certainly kick off the procurement process for one or two thermal power plants in the months ahead in anticipation of the need to replace expiring gas-fired capacity.

North Africa

The procurement of renewable energy plants, particularly in the North African states, led by Egypt and Morocco, is also expected to ramp up, in part due to their goals to develop green hydrogen hubs and export clean energy to Europe.

“Morocco is definitely going to be a major market from 2024 and onwards, with several IPPs in the planning and study stage,” says a senior partner with a transaction advisory firm.

Expectations also continue to thrive for many thermal projects planned in Libya and solar PV IPPs in Iraq, despite political uncertainties. 

For Iraq in particular, the external pressure to rely less on Iranian electricity imports will provide impetus to its solar and CCGT capacity programmes.

The future trend for levelised costs of electricity is likely to remain mixed over the coming months

LCOE trend 

The future trend for levelised costs of electricity (LCOEs) – or the pre-agreed, long-term tariffs an offtaker pays utility developers for their plants’ electricity output – is likely to remain mixed over the coming months, according to a region-based expert.

“The LCOEs for CCGTs are likely to remain stable next year, while solar LCOEs could slightly decline, compared with those seen in 2023,” the source tells MEED.

Supply chain constraints for gas turbines remain a concern for future CCGT power plants, given what is understood to be a long lead time for delivery and the production capacity constraints in the EU plants of the leading suppliers such as Germany’s Siemens Energy and the US’ GE.

While this opens opportunities for gas turbine manufacturers based in China, it is foreseeable that there remains a dominant preference for EU-made products across the Mena region, particularly in the GCC states.

The same expert argues, however, that the massive increase in gas turbine demand may be temporary, with demand likely to start petering off sometime after 2024, when clients and utility developers alike will have to consider the impact of these assets, whose concession agreements extend between 25 and 30 years, to their net-zero commitments.

As previously cited, Saudi Arabia will continue to dominate the region’s power sector project activities in the foreseeable future. Its ambition for renewable energy sources to account for half its capacity by 2030 and the Vision 2030-related plans to build off-grid developments such as Neom, the Red Sea and Amaala, as well as its multibillion-dollar industrialisation programme, will drive this.

According to MEED Projects data, Iran, Algeria, Kuwait, the UAE and Qatar are the other key markets for projects in the bidding stage. Morocco, Egypt, Kuwait and the UAE are the most promising markets for projects outside Saudi Arabia in the study, design or prequalification stage.

Overall, the net-zero commitments made by key states such as Saudi Arabia and the UAE, and plans to build green hydrogen valleys from Abu Dhabi to Morocco, in addition to an endemic rise in electricity demand as populations and economies grow, will likely keep the overall power sector buoyant over the coming years, barring any major events, like the Covid-19 pandemic in 2020 or the Russia-Ukraine war in 2022. 

Sustainability drives water investments

https://image.digitalinsightresearch.in/uploads/NewsArticle/11336705/main.gif
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Egypt’s Obelisk equity move merits attention

    27 February 2026

    Commentary
    Mark Dowdall
    Power & water editor

    The first phase of Africa’s planned largest hybrid solar and battery installation project reached commercial operations this week. While the 1.1GW Obelisk facility in Egypt is significant in capacity terms, the more interesting detail may lie in its ownership structure.

    Scatec secured the 25-year US dollar-denominated power purchase agreement in 2024 and moved the project into construction as majority shareholder with Norwegian Investment Fund for Developing Countries (Norfund).

    In November, France’s EDF acquired a 20% equity stake to join the project as a shareholder, while discussions with additional equity partners are at an “advanced” stage.

    With the development risk largely already absorbed and revenues secured under a long-term, dollar-denominated contract, the question arises: how are developers approaching capital allocation in the renewables market?

    Especially in emerging markets, sponsors must consider currency convertibility, sovereign exposure and overall balance sheet concentration. Bringing in partners after key milestones reduces that exposure without abandoning the asset.

    However, risk mitigation is not the only driver behind these decisions.

    This week, Masdar agreed to sell a 60% stake in a portfolio of wind assets in Portugal, a more mature European market with stable regulation and limited currency risk.

    Given the developer’s 100GW global target, this would seem a prudent way to recycle capital as part of an aggressive growth strategy.

    Meeting global climate targets will require sustained and rapid expansion of renewable capacity. Estimates suggest the world must add more than 1,100GW of renewables annually through 2030 to remain on track.

    Increasingly, as pipelines expand and capacity targets rise, developers are likely to weigh carefully when to hold assets and when to release capital.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15798541/main.jpg
    Mark Dowdall
  • Petrokemya awards contract for ethylene oxide project

    27 February 2026

    Register for MEED’s 14-day trial access 

    Petrokemya, an affiliate of Saudi Basic Industries Corporation (Sabic), has awarded China National Chemical Engineering Group Corporation (CNCEC) the main contract for an ethylene oxide catalyst project.

    The project covers engineering, procurement and construction (EPC) of a new 4,000-tonne-a-year (t/y) ethylene oxide catalyst production unit, encompassing multiple units for catalyst carrier washing and drying, as well as supporting utilities.

    Ethylene oxide catalysts are the core technology of the ethylene oxide industry chain, directly determining production efficiency, product quality and energy consumption of the process unit.

    Petrokemya is a wholly owned affiliate of Sabic, with its main petrochemical production complex located in Jubail Industrial City, in Saudi Arabia’s Eastern Province.

    The ethylene oxide catalyst project is the ninth contract awarded by Petrokemya to CNCEC since 2015. Previous jobs cover EPC works on seven specialty chemical projects and a project to upgrade and expand output capacity at Petrokemya’s main methyl tert-butyl ether (MTBE) production unit.

    Petrokemya awarded CNCEC the contract for the MTBE plant expansion project in November 2022, with the contractor starting work the following month.

    Through the project, the output potential of Petrokemya’s MTBE unit will increase from 700,000 t/y to 1 million t/y, purportedly making it the world’s largest single-unit MTBE plant.

    CNCEC achieved mechanical completion of the MTBE plant expansion project in August last year, and the project is now understood to have been commissioned.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15797372/main4837.jpg
    Indrajit Sen
  • Regulatory environment shifting for Kuwait oil and gas tenders

    27 February 2026

     

    Changes to the way key contracts are tendered in Kuwait have increased expectations that the country is shifting to a new regulatory environment for oil and gas projects.

    Contractors interested in bidding for Kuwait’s planned tender for a $3.3bn gas processing facility have been briefed that the country’s Central Agency for Public Tenders (Capt) will not be involved in the tender process.

    The exclusion of Capt from participating in the tender process has come at a time of increasing concerns surrounding the role of the agency, and has sparked speculation that it could be excluded from an increasing number of strategic tenders in future.

    Capt is responsible for reviewing technical and commercial evaluations of bids and verifying that bidding is competitive.

    Prior to its suspension in May 2024, Kuwait’s parliament was often blamed for blocking projects and halting the initiatives of Kuwait Petroleum Corporation (KPC).

    However, the suspension of parliament has not triggered an uptick in project activity at KPC, indicating that other problems are holding back decision-making.

    As time has passed, many stakeholders have started to view Capt as a key sticking point in the tendering process.

    One source said: “There is a lot of frustration within some parts of the country’s oil and gas sector about the time it takes for Capt to review everything and approve a tender.”

    Although this is not completely unheard of for small contracts tendered by Kuwait Gulf Oil Company (KGOC) to bypass Capt, it is unusual to see very large contracts bypass the agency.

    “A lot of people were very surprised when they heard that Capt would not be involved in this process,” said one source.

    “While the agency is resented by many in the sector that see it as a big reason for a lot of delays, it’s also highly respected for stopping corruption and bad practices.

    “If you look historically at which large contracts avoided a review by Capt or its predecessor, it was only the most critical and urgent projects.

    “The fact that this project is being permitted to side-step the agency’s process seems to mark a shift – and we could well see more big contracts following the same route in the future.”

    Past exceptions

    An example of a time period when key contracts were allowed to bypass Kuwait’s Central Tenders Committee (CTC), the predecessor to Capt, was in 1991.

    During this time, in the wake of the Gulf War, urgent contracts needed to be tendered by Kuwait Oil Company (KOC), including some related to extinguishing fires at oil wells, which were lit by retreating Iraqi troops.

    One source said: “I think the early nineties was the last time that large contracts were tendered by KOC without going through the relevant agency.

    “It is easier to bypass Capt when it is a KGOC contract, but it’s still very surprising to see it with a contract of this size.”

    If more contracts in the future are “fast-tracked” in the same way, it is likely that many stakeholders will welcome the effort to speed up tendering.

    However, some are worried that if the streamlined tendering model is replicated too widely, it could undermine checks and balances that stop corruption.

    “Kuwait is lucky as it has a system that makes corrupt practices very difficult to participate in,” said one source.

    “The country needs to be careful and make sure that it doesn’t undermine the rigour of the system by prioritising convenience.”

    Direct awards

    Another factor that has impacted expectations about the future of project tendering in Kuwait’s oil and gas sector is that the methods used for several large contracts have been recently tendered in other sectors.

    Key tenders that are impacting the discussions surrounding Kuwait’s oil and gas sector are the award of the $4bn Grand Mubarak Port contract to China Harbour Engineering Company in December and the award of a $3.3bn wastewater treatment plant contract to China State Construction Engineering Corporation in January.

    Both of those direct contract awards were government-to-government agreements that did not have an open tender process in Kuwait and were not approved by Capt.

    One source said: “These huge contract awards to Chinese companies without open tenders in Kuwait were extremely surprising.

    “If you had asked me at the start of last year whether this kind of thing would be signed off, I would have told you it’s highly unlikely.

    “I think there is no reason why we couldn’t see similar contract awards coming in the future in Kuwait’s oil and gas sector.”

    Another source said: “Just like the gas processing contract, these contracts awarded to Chinese firms seem to have side-stepped Capt in a way that is very surprising.”

    The planned $3.3bn gas processing facility is not the first time that KPC has tried to reduce its reliance on Capt for processing tenders.

    In April 2024, KPC launched its own tendering portal in an effort to streamline the tendering process for projects in the oil and gas sector.

    The portal was named the “KPC and Subsidiaries K-Tendering Portal” and is referred to as “K-Tender” by contractors.

    The portal gave KPC a way of tendering and communicating with contractors without relying on the Capt website.

    “The K-Tender portal was a step towards reducing reliance on Capt and gave KPC the flexibility to tender projects without Capt, even though, at the time, KPC made it clear that it intended to list all tenders both on the Capt website and its own portal.”

    The recent direct contract awards to Chinese contractors and the tendering process for the $3.3bn gas processing facility have sent a signal to contractors in the Kuwaiti market that more unusual tenders could be in the pipeline.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15791028/main.gif
    Wil Crisp
  • Kuwait awards oil pier contract

    27 February 2026

    Kuwait National Petroleum Company (KNPC) has awarded local firm Gulf Dredging & General Contracting Company a $172m contract to help develop a new south arm facility at the Shuaiba oil pier.

    The scope of the contract covers civil, marine, mechanical and electrical work, according to a statement.

    Gulf Dredging & General Contracting Company is a subsidiary of Kuwait-headquartered Heisco.

    The main contractor on the Shuaiba oil pier project is the Greek construction firm Archirodon. In October last year, KNPC awarded Archirodon a KD160m ($528m) contract to develop the new south arm facility.

    The Shuaiba oil pier comprises several structures, including the approach trestle, the north arm facility and the south arm facility. A number of planned projects are to be developed at the Shuaiba port facilities.

    The north arm facility consists of two berths, 31 and 32. When operational, it loads refined products for both KNPC and state-owned Petrochemicals Industries Company.

    The north arm facility is currently not operational and will be upgraded as part of a separate project.

    KNPC is a subsidiary of Kuwait Petroleum Corporation (KPC).

    Last year, KPC chief executive Sheikh Nawaf Al-Sabah reiterated that the company plans to increase its oil production capacity to 4 million barrels a day by 2035.

    About 90% of Kuwait’s oil production comes from Kuwait Oil Company, which also plans to achieve a daily gas production capacity of 1.5 trillion cubic feet by 2040.

    Kuwait is estimated to have 100 billion barrels of oil reserves.

    Under KPC’s 2040 strategy, it plans to invest $410bn, sourced from cash flow, debt and joint ventures with other businesses.

    Of the $410bn, KPC and its subsidiaries intend to invest $110bn to accomplish the group’s energy transition targets.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15791026/main.jpg
    Wil Crisp
  • Local firms win $378m Qatar project contracts

    27 February 2026

     

    Qatar’s Public Works Authority (Ashghal) has awarded construction contracts for two major projects in Doha to a pair of local contractors.

    According to the results of the tender published on Ashghal’s website, a joint venture of Imar Trading & Contracting and Al-Sraiya Trading & Contracting won a QR1.1bn ($323m) contract for the redevelopment of Hamad General Hospital.

    Qatar Building Engineering won the other QR198.5m ($55m) contract for the design and build of the new Q-Post headquarters building and sorting facility.

    The two projects are part of 12 newly signed contracts announced by Ashghal earlier in February.

    The other projects awarded include the renovation of the Qatar Racing & Equestrian Club and the Qatar Equestrian Federation, as well as the implementation of phase four of the Al-Uqda Equestrian complex development.

    In the roads and infrastructure sector, four projects have been awarded, led by packages one and two of the road and infrastructure development works in Izghawa and Al-Thumaid.

    The awards also include a project covering landscaping and an air-conditioned walkway at Qatar University, as part of broader public facilities improvement initiatives.

    Mohammed Bin Abdulaziz Al-Meer, president of Ashghal, said that the projects have been awarded to Qatari firms, reflecting Ashghal’s commitment to strengthening the role of local companies.

    According to UK analytics firm GlobalData, Qatar’s construction industry is expected to expand by 4.3% in 2026, supported by investments in renewable energy and transportation infrastructure.

    According to the Planning & Statistics Authority, Qatar’s construction value-add grew by 6.6% year-on-year in the first half of 2025. 

    GlobalData expects the industry to grow at an annual average growth rate of 4.6% in 2027-29, supported by investments in construction, energy and infrastructure projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15795459/main.jpg
    Yasir Iqbal