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
  • UAE firm acquires majority stake in African power producer

    31 August 2026

    Abu Dhabi-based ePointZero has announced a deal to acquire a 90% stake in pan-African independent power producer Azura Power Holdings.

    The transaction will give the subsidiary of UAE investment group 2PointZero control of 752MW of operating power generation capacity across Nigeria, Senegal and Mozambique.

    The company will acquire the respective stakes held by existing shareholders Actis and Africa50 through an acquisition vehicle established with Amaya Capital, an Africa-focused investment firm based in London.

    Amaya Capital founded Azuro Power in 2010 and will retain a 10% minority stake in the company, which also has a development pipeline of more than 1.5GW of planned power projects.

    The pipeline includes expansions at existing sites, as well as new gas and renewable energy projects and battery energy storage systems.

    Azuro Power’s operating portfolio comprises the 461MW Azura-Edo power plant in Nigeria, the 116MW Tobene power plant in Senegal and the 175MW Central Termica de Ressano Garcia plant in Mozambique. The company’s operating assets generate around 10% of each country’s grid baseload power, the statement said.

    The company’s projects have received financing and support from development finance institutions including the World Bank, British International Investment, German Investment & Development Company, the US International Development Finance Corporation, the Dutch entrepreneurial development bank, the International Finance Corporation, the Multilateral Investment Guarantee Agency and France’s Proparco.

    The deal, subject to regulatory approvals and other customary closing conditions, marks ePointZero’s entry into African power generation and follows the acquisition of a 20% stake in Egypt’s Elsewedy Electric in 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19171095/main.jpg
    Mark Dowdall
  • Contract award nears for Saudi Landbridge Riyadh section

    31 August 2026

     

    Saudi Arabia Railways (SAR) is preparing to award the main construction contract for the design-and-build of the Riyadh Rail Link, a new north-to-south railway line across the capital.

    MEED understands that the commercial proposals were opened two weeks ago, with a decision expected imminently.

    SAR began the post-tender clarifications with bidders in July, as MEED reported.

    The bidders include:

    • China Civil Engineering Construction Corporation / Al-Ayuni Investment & Contracting (China/local)
    • Nesma & Partners / China Harbour Engineering Company (local/China)
    • Al-Rashid Trading & Contracting / IC Ictas Construction / Saipem (local/Turkiye/Spain)
    • Saudi Binladin Group (local)

    In June, MEED exclusively reported that contractors submitted their commercial proposals on the 30th of that month.

    The scope includes a 35-kilometre double-track line connecting SAR’s North-South Railway to the Eastern Railway network.

    Issued on 29 January, the tender also covers the procurement, construction and installation of associated infrastructure, including viaducts, civil works, utility diversions/installations, signalling systems and other related works.

    Once delivered, the Riyadh Rail Link is expected to become a key component of the Saudi Landbridge railway.

    In January, SAR said it would deliver the Saudi Landbridge project through a “new mechanism” by 2034, after failing to reach an agreement with a Chinese consortium to construct it, as MEED reported.

    In an interview with local media, SAR CEO Bashar Bin Khalid Al-Malik said the consortium failed to meet local content requirements, and that the project would instead be delivered in several phases under a different procurement model.

    Negotiations have been under way between Saudi Arabia and China-backed investors interested in developing the scheme through a public-private partnership (PPP). Al-Malik put the project cost at about SR100bn ($26.6bn).

    Overall, it comprises more than 1,500km of new track. A core element is a 900km railway between Riyadh and Jeddah, providing the capital with direct freight access to King Abdullah Port on the Red Sea.

    Other key elements include upgrading the existing Riyadh-Dammam line, a bypass around the capital known as the Riyadh Link, and a connection between King Abdullah Port and Yanbu.

    The Saudi Landbridge is one of the kingdom’s most anticipated project programmes. First announced in 2004, it was put on hold in 2010 before being revived a year later. Rights-of-way issues, route alignment and the high cost have been among the main stumbling blocks.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19161887/main.gif
    Yasir Iqbal
  • Prequalification begins for Dammam suburb boulevard PPP

    31 August 2026

    Saudi Arabia’s Ministry of Municipalities & Housing, in collaboration with Ashraq Development Company and the National Centre for Privatisation & PPP, has issued a request for qualification (RFQ) notice for the development of the King Fahd suburb boulevard project in Dammam.

    The notice was issued on 27 August, with a submission deadline of 22 October.

    The public-private partnership (PPP) project will be delivered using a design, build, finance, operate, maintain and transfer model, with a 43-year contract term.

    The project is located in Al-Bayda Governorate and features a 4 kilometre (km) mixed-use zone along a central boulevard, forming part of a larger 7.3km corridor.

    The project will be developed in two phases and span about 1 million square metres.

    According to a statement: “The private sector partner will be responsible for developing and operating the boulevard, which includes leisure and recreational facilities, public parks, entertainment venues, retail outlets, office spaces, hospitality zones, pedestrian walkways and road networks.”

    The project is the latest addition to the growing number of PPP projects in the kingdom. 

    In January, Saudi Arabia launched a national privatisation strategy aimed at mobilising $64bn in private sector capital by 2030.

    Building on the privatisation programme first introduced in 2018, the strategy focuses on unlocking state-owned assets for private investment and privatising selected government services.

    In a statement, NCP said the strategy comprises 147 opportunities drawn from a broader pipeline of more than 500 projects across 18 sectors.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19160560/main.jpg
    Yasir Iqbal
  • Contractors submit bids for Kuwait power transmission works

    31 August 2026

     

    Kuwait’s Public Authority for Housing Welfare (PAHW) has received bids for two tenders covering power transmission works at the South Saad Al-Abdullah residential development.

    The first tender covers the supply, installation and maintenance of 10 main 132/11kV transformer substations for the third phase of the development. 

    According to sources, five contractors submitted bids on 26 August. The local Sayed Hamid Behbehani & Sons made the lowest offer of $104.2m.

    The bids include:

    • Sayed Hamid Behbehani & Sons: $104.2m (Kuwait)
    • Industrial Electrical Projects (IEP): $111.5m (Kuwait)
    • Larsen & Toubro: $114m (India)
    • Oman National Engineering & Investment: $118m (Oman)
    • National Contracting Company: $126m (Saudi Arabia)

    The second PAHW tender covers the supply, installation and maintenance of 10 main 132/11kV transformer substations for the fourth phase of the project. 

    According to sources, five contractors also submitted bids on 26 August, with A-Ahleia Switchgear making the lowest offer of $103.3m.

    The bids include:

    • Al-Ahleia Switchgear: $103.3m (Kuwait)
    • Industrial Electrical Projects (IEP): $111.7m (Kuwait)
    • Larsen & Toubro: $114m (India)
    • Oman National Engineering & Investment: $118.3m (Oman)
    • National Contracting Company: $126m (Saudi Arabia)

    Both projects were initially tendered in May. As reported by MEED, PAHW previously issued addendums for both substation tenders, revising the qualification requirements for bidders.

    According to the revised requirements, contractors must be approved by Kuwait’s Ministry of Electricity, Water & Renewable Energy and have experience supplying and installing at least 10 132kV substations in Kuwait.

    The addendums also introduced requirements related to transformer and gas-insulated switchgear manufacturing approvals, as well as operational performance records for installed equipment.

    Sabah Al-Ahmad residential city

    Meanwhile, bids remain under evaluation for two 132kV underground cable tenders for the South Sabah Al-Ahmad residential development, tendered by PAHW in May.

    The first cable tender covers the supply, extension and maintenance of 132kV underground cables feeding eight main transformer substations serving the N1, N6 and N11 districts in the project’s fourth phase. 

    MEED previously reported that Egytech Cables, a subsidiary of Egypt’s Elsewedy Electric, was the lowest bidder with an offer of $42.37m.

    The second cable tender covers the supply, extension and maintenance of 132kV underground cables linked to substations serving the N5, N6, N8 and N10 districts in the project’s third phase. 

    Egytech Cables submitted the lowest offer of $39.95m. TBEA Shandong Luneng Taishan Cable submitted a bid of $41.89m, along with Riyadh Cables ($42.05m) and The Contractor General Trading & Contracting ($44.97m).

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19151780/main.jpg
    Mark Dowdall
  • Eni plans to drill 230 oil and gas wells in Egypt

    31 August 2026

    Italy’s Eni is planning to drill 230 new oil and gas wells in Egypt, according to a statement from the country’s Ministry of Petroleum & Mineral Resources.

    Eni’s chief executive, Claudio Descalzi, discussed his plans for exploration and development in Egypt on 25 August during a meeting with Egypt’s Prime Minister Mostafa Madbouly and the Minister of Petroleum and Mineral Resources Karim Badawi.

    During the meeting, Descalzi said that the company has plans to drill 30 exploration wells in addition to 200 development wells.

    Descalzi said his company plans to intensify its exploration and development programmes, especially in the Mediterranean and Western Sahara regions, to increase production of natural gas and crude oil.

    He said that his company plans to use the latest seismic imaging and artificial intelligence technologies as a key part of its exploration and development plans.

    In a separate statement, Eni also said that it is working with UK-headquartered BP and state-owned Egyptian General Petroleum Corporation (EGPC) to reach a final investment decision (FID) for a project to develop the major gas discovery of Denise West in Egypt’s Temsah concession.

    Eni made the discovery in February and says it holds about 2 trillion cubic feet of gas and 130,000 barrels of condensate.

    It is targeting first gas in less than two years and expects to reach FID “in the next few months”, according to its statement.

    Eni’s total investments in Egypt have reached a value of $8.5bn, according to the statement from Egypt’s Ministry of Petroleum & Mineral Resources.

    During the meeting on 25 August, Descalzi also stressed the importance of linking Cyprus’ Cronos gas field to Egyptian export infrastructure.

    In July, Eni reached the FID to develop the Cronos project in deep waters offshore Cyprus, targeting the first Cypriot gas to market in 2028.

    Production is expected to reach a plateau of 500 million standard cubic feet a day.

    In October last year, Egypt and Cyprus signed provisional agreements to connect Cyprus’ Cronos gas field to Egypt’s gas infrastructure.

    The agreements were signed by parties including Egypt’s Ministry of Petroleum and Mineral Resources, Eni, and the French oil and gas company TotalEnergies.

    Connecting the Cronos field to Egypt is expected to involve the tendering of a major subsea pipeline project.

    This will allow gas to be transported and processed in existing Zohr facilities in Egypt, then transferred and liquefied at the Damietta LNG plant for export as LNG to international markets, primarily Europe.

    At the meeting on 25 August, Descalzi said the planned project to connect the Cronos field to Egypt will be considered a model for regional cooperation in the gas sector and will enhance Egypt’s status as a regional gas hub.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19079059/main.jpg
    Wil Crisp