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Mena pushes for nuclear future

2 August 2023

 

The Middle East and North Africa (Mena) region is set to register a rise of at least 30 per cent in power generation capacity by 2030 due to population growth and industrial expansion.

The rapid increase requires a strategy to advance energy security while reducing carbon emissions and fossil-fuel dependence, creating strong interest in nuclear power and renewable energy.

Iran has a 1GW nuclear plant in Bushehr and construction is under way for a second 300MW reactor in Khuzestan.

In the UAE, three of the four 1.4GW reactors at the GCC region’s first multi-unit nuclear power plant in Barakah, Abu Dhabi, are now connected to the electricity grid.

Egypt, in partnership with Russia’s Rosatom, is building its first nuclear power plant in El-Debaa.

Riyadh, meanwhile, tendered the contract to build its first large-scale power plant in Duwaiheen last year.

Beyond the GCC, Jordan has announced the production of 20 kilograms of yellowcake from 160 tonnes of uranium ore at a newly operational processing facility, while Morocco has completed a study supporting a plan to go nuclear.

Alternative base load

Apart from Saudi Arabia, these countries have significant renewable capacity as of 2023. All aim for renewables to account for up to half of installed capacity by the end of the decade.

Nuclear is seen as an alternative base load to thermal capacity to counter the intermittency of renewables in the absence of viable storage solutions. This has helped build the case for adding nuclear to the energy mix – although, in the UAE, the Barakah plant predated the renewable energy programme.

The decarbonisation potential of nuclear may be overstated, however, says a leading regional expert on utility projects.

“We should use all available clean-carbon solutions to decarbonise all industrial and human consumption and endeavour,” says Paddy Padmanathan, former CEO of Saudi utility Acwa Power. “Clearly we need to decarbonise as soon as possible.”

The rate at which the residual carbon budget is being consumed implies that even zero emissions by 2050 will not be sufficient, according to the executive. This begs the question: Which technologies will deliver solutions at scale to quickly achieve decarbonisation.

Nuclear power plants, which – with the exception of Abu Dhabi’s Barakah – have struggled to be delivered on time and within budget, may not be a viable solution, says Padmanathan, who now sits on the board of the UK energy startup Xlinks and green hydrogen firm Zhero.

He says nuclear power plants outside China have taken twice as long to build than planned and have typically cost more than twice their budget. Such capital expenditure and long construction times mean nuclear may only make sense if you have lots of spare cash, he adds.

Hence it is unwise to factor in nuclear to plans to decarbonise power generation by 2050, Padmanathan argues. “We already have much – if not all – the technologies to get the job done,” he notes, referring to renewable energy and battery storage solutions, among others. 

He continues: “One cannot bank on such a rare outlier as Barakah, which got completed with only a marginal increase in cost and time, and rely on nuclear to deliver any meaningful level of flexible base load.”

Saudi programme

Budget availability and the urgency of decarbonisation aside, other factors complicate nuclear projects in the region, particularly in Saudi Arabia.

The kingdom’s nuclear energy programme dates back to 2010 with the creation of King Abdullah City for Atomic & Renewable Energy (KA-Care). In 2021, KA-Care invited consultancy bids for its first large-scale nuclear power project in Duwaiheen, close to the Qatar border. It awarded the financial, legal and technical advisory services contracts last year.

In October 2022, Riyadh issued the request for proposals for the main contract to Russian, South Korean, Chinese and French firms.

Earlier this year, it formed the Saudi Nuclear Energy Holding Company, which plans to develop nuclear power plants as early as 2027 to produce electricity and to desalinate seawater, as well as for thermal energy applications. 

Most recently, the state offtaker Saudi Power Procurement Company floated a tender for advisers to help prepare and review project agreements related to the procurement of electricity from Saudi’s first nuclear power plant, raising further speculation about the nuclear project.

The Saudi programme, particularly the kingdom’s plans to mine uranium as part of its economic and industrial strategy, is a thorn in Washington’s side. It is understood to have been a key theme in discussions when US President Joe Biden visited Riyadh last year.

Washington is wary of the nuclear power plant contract being awarded to Chinese or Russian contractors, not only because this could drive Riyadh closer to geopolitical rivals of the US, but also because it weakens US demands for Riyadh to abandon its nuclear fuel cycle ambitions before signing any bilateral nuclear cooperation agreement (NCA), otherwise known in Washington as a 123 agreement.

Uranium has to be enriched to up to 5 per cent for use in nuclear power plants and to 90 per cent to become weapons-grade. According to an Energy Intelligence report, the stalemate between Washington and Riyadh centres around US demands for Saudi Arabia to commit to the NCA and not pursue a domestic uranium enrichment or reprocessing programme.

The US also wants the kingdom to sign and ratify the International Atomic Energy Agency’s (IAEA) Additional Protocol, allowing nuclear inspectors fuller access to Saudi Arabia’s nuclear programme.

The report alludes to the US supporting South Korean contractor Kepco’s bid to develop the nuclear plant because it provides Washington with a final lever for pressuring Riyadh to accept its conditions for the 123 agreement and IAEA protocol.

Done deal

Biden’s visit did not produce material results, although unconfirmed reports say he may have given his blessing to the project, while others argue Riyadh did not need it.

“I think, in the end, this is a done deal, meaning that Saudi Arabia will pursue a nuclear energy programme,” says Karen Young, a senior research scholar at the Centre on Global Energy Policy at Columbia University in the US.

“They will pursue domestic uranium mining and likely enrichment, and we will see a more global ramp-up of nuclear energy use – and also, over time, possibly areas of proliferation in security uses not just in the Mena region, but across a wide geography.”

The US can either take solace from the fact that it takes time to develop a nuclear project, or it can – if it is not too late – revisit its relationship with Saudi Arabia, especially in the wake of a rapprochement between Tehran and Riyadh under a deal brokered by China.

“Moving into design and procurement phases … whether with Russian, Chinese or South Korean [firms] … heightens already sensitive notions of strategic competition in the Gulf, as the US understands it,” notes Young.

In hindsight, it appears the US government has under-appreciated the seriousness of the Saudi plan or the importance of localised industry and mining as a domestic economic and security interest.

“Saudi Arabia sees an opportunity to play the US against its other options, so this is a unique moment of bargaining in which the nuclear file can be traded against broader foreign policy priorities for the Saudi leadership,” Young says.

Russian conundrum

The Barakah nuclear process, which entailed Abu Dhabi signing a 123 agreement with Washington, is seen as a gold standard. Emirates Nuclear Energy Company (Enec) signed supply contracts with France’s Areva and Russia’s Tenex for the supply of uranium concentrates and for the provision of conversion and enrichment services.

It then contracted Uranium One, part of Russia’s Rosatom, and UK-headquartered Rio Tinto for the supply of natural uranium for the plant. US-based ConverDyn provided conversion services, while British firm Urenco provided enrichment services.

The enriched uranium was supplied to Kepco Nuclear Fuels to manufacture the fuel assemblies for use at the Barakah nuclear power plant.

Fuel supply, processing, removal and storage are now complicated by Russia’s conflict and its global reputation, notes Young. The reference to Russia is important, given that Iran has provided drones to the country for use in its war with Ukraine, in exchange for the sale of advanced military equipment and cyber warfare. This is seen as a direct threat to Opec ally Riyadh.

The Tehran-Riyadh rapprochement only makes sense from a viewpoint where a dead Iran nuclear deal could expedite the Islamic Republic’s plan to build a bomb, potentially leading to a nuclear arms raise in the region, which everyone – particularly the two countries’ biggest client, China – would rather avoid.

Despite these complexities, the regional and global push to build nuclear capacity following the invasion of Ukraine and the threat to global gas supplies does not appear to be slowing.

The UAE, for instance, has partnered with the US to mobilise $100bn to support clean energy projects at home and abroad, and has pledged $30bn for energy cooperation with South Korea. Both these commitments involve significant investments in renewable and civilian nuclear energy projects.

This suggests that nuclear as a clean energy option is here to stay, despite mounting costs and geopolitical risks

Unfortunately, however, in a region marked by perennial instability, there are few incentives for the involved countries to be more transparent about their programmes.

While the evolving rapprochement between countries that have previously considered each other existential threats might not eliminate the spectre of a nuclear arms race, it can defuse tensions in the interim while helping push decarbonisation agendas.

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Jennifer Aguinaldo

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    Ever since Aldar Properties first launched the Yas Island project with its Yas Marina Circuit for the Abu Dhabi Grand Prix in 2006, Abu Dhabi has been steadily adding theme parks to the island’s roster of attractions. First, there was the Ferrari theme park, then came a water park, a Warner Bros theme park and, most recently, SeaWorld. 

    The theory with theme park development is bigger is better. 

    A destination needs a series of parks to create a critical mass to attract visitors who can stay and enjoy multiple parks in one visit. The example always cited is Florida, which is home to many of the world’s largest theme parks, including Disney World. 

    The theory gained particular traction in the region when Dubai Parks and Resorts opened. The company, which was public until it was acquired by Meraas in 2021, reported significant losses as it struggled to attract enough visitors.

    Although it opened with Legoland, Legoland Waterpark, Motiongate and Bollywood theme parks, insiders said that the problem with the development was that it did not have enough attractions to turn it into a successful theme park destination. 

    The financial performance of theme parks on Yas Island has not been publicly disclosed. While it is accepted that they have been more successful than their counterparts in Dubai, some say that the island still does not have the critical mass required to establish itself as a global destination for theme park visitors.


    Miral has developed a series of theme parks and other entertainment-related attractions on Yas Island 

    Enter Disney

    Disney changes that. It is the largest brand in the theme park space and will be a major attraction, but with limited information released on the project so far, it is difficult to fully gauge how significant the project will be. 

    The official release said that the project will be developed and operated by Abu Dhabi developer Miral, adding that Disney’s in-house design and engineering unit, Walt Disney Imagineering, will lead creative design and operational oversight to provide a world-class experience. It did not give any details on the ownership of the project. 

    In Hong Kong, for example, a company, Hong Kong International Theme Parks, was established as a joint venture, with the Government of Hong Kong holding 57% and The Walt Disney Company holding 43%. 

    In Japan, the structure is different. The Tokyo Disney Resort is owned and operated by Oriental Land, and the company pays licences and royalties to The Walt Disney Company.

    In interviews following the launch announcement, Miral CEO Mohamed Abdalla Al-Zaabi confirmed the arrangement will be like Tokyo. 

    Waterfront location

    The official release for the Abu Dhabi launch also said that the project is on Yas Island, which only has limited areas of land to develop. The release also said that the land is waterfront, and imagery in the launch video shows the Abu Dhabi skyline in the background, suggesting the land is on the northern waterfront of Yas Island. 

    There is a substantial tract of undeveloped land on the north shore of the island, which measures about 13 square kilometres (sq km). This is larger than the 4 sq km site that Hong Kong Disneyland occupies, but much smaller than Disney World in Florida, which spans an area of 111 sq km – nearly five times the size of the whole of Yas Island and nearly double the size of Abu Dhabi Island.

    The hope is that Yas Island will become a leading global theme park destination and attract large numbers of visitors wanting a holiday with multiple theme park visits

    Exclusivity clause

    Another area of interest will be whether Abu Dhabi has an exclusivity agreement with Disney for the region. No exclusivity was mentioned at the launch, but in Hong Kong, the issue became contentious when Disney announced plans to build a park shortly after Disneyland Hong Kong opened. Local politicians criticised the Hong Kong government for not including an exclusivity clause in its deal with Disney. 

    Tourism gateway

    Like Hong Kong, Abu Dhabi is a smaller economy sitting next to a larger regional player. With Saudi Arabia’s ambitious Vision 2030 strategy and its existing roster of theme park developments at Qiddiya, which includes a Six Flags, a water park and a Dragon Ball Z theme park, developers in Riyadh would likely be keen to have a Disney theme park, too. 

    For now, with Disney on board in Abu Dhabi, the hope is that Yas Island will become a leading global theme park destination and attract large numbers of visitors wanting a holiday with multiple theme park visits.

    The potential is certainly there. During the project launch, Disney highlighted that the UAE is located within a four-hour flight of one-third of the world’s population, making it a significant gateway for tourism. It is also home to the largest global airline hub in the world, with 120 million passengers travelling through Abu Dhabi and Dubai each year.

    If that potential is realised, then the bigger is better theory will be proved right. If the park’s performance disappoints, then it will suggest the region is not such a great destination for theme parks after all. 

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    Four local and international firms have won contracts for the construction of seven high-voltage substations in Qatar.

    State-backed Qatar General Electricity & Water Corporation (Kahramaa) signed the contracts, which have a total combined value of approximately QR3.1bn ($850m), with the following firms:

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    Kahramaa said the projects aim to “meet electrical network demand in light of the country's fast-growing …urban development”.

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    This reflects “our great confidence in the capabilities of the local private sector and its pivotal role in achieving our development vision and achieving Qatar National Vision 2030”, said Kahramaa president Abdulla Bin Ali Al-Theyab.

    Qatar Minister of State for Energy Affairs, Saad Sherida Al-Kaabi, and senior executives from Kahramaa and the contracting firms signed the deals at a ceremony held in Doha.

    Al-Kaabi said the projects will help “ensure our networks' continued and sustainable ability to accommodate the unprecedented growth of the power sector and meet the increasing electricity demand”.

    Kahramaa said the contractors will undertake the construction of electrical substations and the connection of cables and overhead lines, as well as the development of some existing substations to increase their capacity.

    Qatar has been ramping up its power generation capacity in recent years.  

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    A consortium led by South Korea's Doosan Enerbility, and that includes Beijing-headquartered PowerChina, will undertake the Ras Abu Fontas peak power plant's engineering, procurement and construction contract, with Germany's Siemens Energy supplying the plant's gas turbines.

    Photo credit: Kahramaa

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  • Data centres churn investments

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    Global investment firm KKR appointed retired US Army general and former Central Intelligence Agency director David Petraeus as chairman of its Middle East operations in mid-April.

    The move is indicative of the region’s importance as a destination for the firm’s future investments, and capitalises on the strength of the relationships Petraeus has forged with Gulf country leaders during his years as a top US military strategist.

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    KKR’s prior investments in the region include a partnership with Abu Dhabi National Oil Company (Adnoc) in 2019 to create Adnoc Oil Pipelines, and acquiring a portfolio of commercial aircraft from Abu Dhabi’s Etihad Airways in 2020.

    The private equity firm’s investment in GDH, however, shows only part of the picture as far as the rapidly evolving data centre investment landscape is concerned.

    In March, Abu Dhabi-based critical infrastructure-focused sovereign investor ADQ and US-headquartered power developer Energy Capital Partners agreed to establish a 50:50 partnership to build new power generation and energy infrastructure that will serve the long-term needs of data centres and industrial clusters in the US and selected other international markets.

    The two firms plan to make total capital investments of more than $25bn across 25GW-worth of projects. The combined initial capital contribution from the partners is expected to amount to $5bn.

    That announcement came a day after UAE National Security Adviser and Deputy Ruler of Abu Dhabi, Sheikh Tahnoon Bin Zayed Al-Nahyan, met with US President Donald Trump at the White House. During the meeting, the UAE is understood to have committed to a 10-year, $1.4tn investment framework for the US.

    Tech funds

    In the past 24 months, Abu Dhabi and Riyadh in particular have set up funds, sometimes in partnership with global firms, to invest in AI and data centre infrastructure, both domestically and abroad.

    Abu Dhabi’s MGX aims to build $100bn in assets under management within a few years, along with US-headquartered and Blackrock-backed Global Infrastructure Partners and Microsoft, the fund's key partners. It is part of the US’ Stargate consortium, which aims to mobilise up to $500bn to build AI infrastructure in the US over the next four years.

    In Riyadh, a $100bn AI initiative known as Project Transcendence is expected to invest in data centres, technology startups and other related infrastructure for the development of AI.

    US-based Silver Lake announced in March 2025 that, together with MGX, it has become a minority shareholder in state-backed, Abu Dhabi-based Khazna Data Centres, one of the region’s largest data centre operators.

    In 2023, Saudi sovereign wealth vehicle the Public Investment Fund (PIF) partnered with US-based DigitalBridge to develop data centres in Saudi Arabia and across the GCC states.

    In early 2025, Saudi Arabia-based DataVolt – which is owned by Vision Invest, a major shareholder in Saudi utility developer Acwa Power and a public-private partnership advocate – signed a preliminary agreement to build a data centre in Neom, Saudi Arabia. The $5bn facility, with an initial phase of 300MW, is the first of many such schemes that DataVolt is planning.

    Not to be outdone, the founder of Dubai-based private real estate developer Damac pledged to invest $20bn in data centre projects in several US cities earlier this year.

    And there is more to the growing – if outsized – number of bidirectional data centre-focused investment flows than meets the eye.

    Given the global AI race and mounting competition, investment decisions regarding data centres are moving from a simple, commercial focus to account for complex geopolitical considerations, according to Jessica Obeid, a partner at Dubai-headquartered New Energy Consult.

    “As the US weaponises its technological advancements, decisions to invest in US-based data centres hedge against the risks of US export controls, positioning developers in proximity to suppliers, ensuring reliable access to components.

    “Yet, this access could become costlier, driven by trade tariff wars, heightened regulations and limited access to grid infrastructure,” Obeid says.

    She adds that the GCC is quickly positioning itself as a global digital hub, driven by cost-competitive energy, advanced infrastructure and strong government backing.

    “Proximity to reliable power supply at an affordable cost, and speed in licensing processes and grid connections, are increasingly becoming strategic factors in data centre deployment – and the GCC offers that.”

    Powering AI strategies

    Almost all of the GCC states have formulated AI strategies that aim to improve operational efficiencies, create jobs and support their energy transition and net-zero initiatives.

    As a result, analysts expect the region to register double-digit annual growth in data centre construction activities in the next few years.

    In a recent update, global consultancy PwC projected that the Middle East data centre capacity could triple from 1GW in 2025 to 3.3GW in five years’ time.

    According to data from regional projects tracker MEED Projects, as of April, an estimated $12bn-worth of data centre construction projects are in the planning stage, in addition to over $820m under bid and $7bn under construction.

    Li-Chen Sim, assistant professor of civil security at Abu Dhabi’s Khalifa University, says that AI investments are, on the one hand, “all part of a carefully conceived strategy to … diversify out of a hydrocarbons-driven economy, to create new revenue streams from overseas data centres, build new growth sectors, support business requirements and offer more knowledge-based jobs as opposed to traditional manufacturing from domestic investments”.

    On the other hand, AI investments also aim to future-proof the hydrocarbons sector, which Sim expects will continue to be a significant driver of growth, revenue and exports, even as the use of renewable power grows.

    However, the ability of Gulf states to execute their plans for leveraging AI to diversify economies and create jobs –and specifically to address youth unemployment – depends on two factors, according to Obeid.

    The first factor is the ability of countries to advance their AI goals from infrastructure to capital and partnerships. The second involves the speed with which they can build up adequate human capital and a skilled workforce.

    “We will have to see how governments align their educational curricula with the AI policies and electricity infrastructure development,” she says.

    Ecosystem investment

    AI and data centre investments go beyond the facilities that house thousands of advanced graphics processing units, miles of cables and many cooling systems. To run and execute applications – particularly AI inferencing tasks – data centre facilities require a substantial amount of energy. 

    Moreover, data centres in the Middle East and North Africa region face elevated environmental risks due to the high ambient temperatures, which increase energy demand for cooling, as well as water requirements.

    This presents both a challenge and an opportunity, according to Obeid. "The GCC has an opportunity to advance innovation in energy and cooling technologies. Liquid cooling is necessary for AI workloads, and small modular reactors will become central in these data centres.” 

    In January, Abu Dhabi’s Emirates Water & Electricity Company (Ewec) appeared to show the way with a plan to build a round-the-clock solar photovoltaic (PV) plant combined with a battery energy storage system (bess) facility.

    The 5.2GW solar PV and 19 gigawatt-hour bess plant is expected to deliver renewable power as baseload, and UAE President Sheikh Mohamed Bin Zayed Bin Sultan Al-Nahyan has said that the project will help power advancements in AI and emerging technologies, and support the delivery of the UAE National AI Strategy 2031 and 2050 Net Zero initiative.

    Sim agrees that renewables combined with battery storage is part of the answer when it comes to building sustainable data centres. “Globally, data centres consume about 1% of electricity, and this figure – together with carbon emissions by data centres – is expected to grow significantly.”

    He notes that Goldman Sachs Research forecasts that global power demand from data centres will increase 50% by 2027, and 165% by the end of the decade, compared to 2023.

    “The other part of the puzzle with regard to sustainability is water consumption by data centres, particularly those in the Gulf, where high temperatures necessitate even more cooling measures.

    “Singapore, for instance, has pioneered integrated water systems that recycle treated wastewater for reuse – and this circular water model could be an option for data centres in the Gulf, instead of using expensive desalinated water,” says Sim.

    As things stand, the GCC can play a key role in the advancement of these and other technologies, along with efficiency measures and the optimisation of server utilisation through AI applications such as digital twins, says Obeid.

    This is just as well, since the region appears to be on the cusp of a boom in inbound and outbound investments that will build data centre capacity abroad and closer to home.

    “We are at a pivotal moment for innovation, where the intersection of digital advancements and energy innovation could position the GCC as a global leader, shaping the future of sustainable digital infrastructure,” concludes Obeid.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13732105/main5907.jpg
    Jennifer Aguinaldo
  • Diriyah floats museum tender

    8 May 2025

    Saudi gigaproject developer Diriyah Company has tendered a contract to build the new iconic museum in the DG2 area of the Diriyah project in Riyadh.

    MEED understands that the tender was issued in April, with the bid submission deadline in June.

    Diriyah completed the prequalification process for the project in February this year.

    Diriyah Company is expected to award more multibillion-dollar contracts this year. In April, MEED exclusively reported that the client had awarded an estimated SR4bn ($1.1bn) contract for a utilities relocation package for the King Salman University (KSU) project located in the second phase of the Diriyah Gate development (DG2).

    The contract was awarded to the joint venture of Beijing-headquartered China Railway Construction Corporation and China Railway Construction Group Central Plain Construction Company.

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    Diriyah gigaproject

    The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

    The company awarded several significant contracts last year, including three contracts worth over SR21bn ($5.5bn). These included an estimated $2bn contract awarded to a joint venture of El-Seif Engineering & Contracting and China State to build the North Cultural District.

    In late July, Diriyah also awarded a $2.1bn package to a joint venture of local contractor Albawani and Qatar’s Urbacon to construct assets in the Wadi Safar district of the gigaproject.

    In December, MEED reported that Diriyah Company had awarded an estimated SR5.8bn ($1.5bn) contract to local firm Nesma & Partners for its Jabal Al-Qurain Avenue cultural district, located in the northern district of the Diriyah Gate project.

    Once complete, Diriyah will have the capacity to accommodate 100,000 residents and visitors.

    MEED’s April 2025 report on Saudi Arabia includes:

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