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.
Jennifer Aguinaldo
Related Articles
  • Yahsat wins $5.7bn UAE contract

    22 September 2023

    Al-Yah Satellite Communications Company (Yahsat) has won an AED18.7bn ($5.1bn) contract for the provision of satellite capacity and services to the UAE government. 

    Its subsidiary, Yahsat Government Solutions, will implement the 17-year contract, which includes operations, maintenance and technology management services of ground segment satellite systems and terminals.

    The contract will replace two current agreements, the capacity services agreement and the managed services mandate, which end in November and December 2026, respectively.

    Under the new contract, Yahsat will provide the government with "secure and reliable satellite capacity and related managed services using the Al-Yah 1 and Al-Yah 2 satellites, currently in orbit, and supplement this with two new satellites, Al-Yah 4  and Al-Yah 5".

    It is expected that the Al-Yah 4 satellite will be launched in 2027, followed by Al-Yah 5 in 2028.

    Yahsat has been providing services to the UAE government for nearly two decades, since it first began operations.

    The contract increases Yahsat's contracted future revenues to AED25.7bn, 16 times its 2022 annual revenues, according to a company statement.

    It also extends backlog well beyond 2040, providing security and visibility over its future cash flows.

    In June, Yahsat signed an authorisation to proceed (ATP) with Airbus for the construction of Al-Yah 4 and Al-Yah 5.

    According to Yashsat, the ATP document "preserves the programme schedule and enables certain activities to commence, such as the system requirements review, design work and procurement activities for long-lead items".

    The Al-Yah 4 and Al-Yah 5 procurement, including spacecraft, ground segment infrastructure, launch and insurance, will be funded by Yahsat’s resources, in addition to other potential funding options that are currently under review.

    The award also includes an advance payment from the government of $1bn, to be received in 2024.

    Main photo: Musabbeh al-Kaabi, chairman of Yahsat
    Jennifer Aguinaldo
  • Riyadh builds the world’s largest urban park

    21 September 2023


    Tucked away from view behind site hoarding in the centre of Riyadh, work is progressing on a project that will transform the heart of the Saudi capital by creating the world’s largest urban park.

    The King Salman Park project will cover an area of 16.7 square kilometres, and more than 70 per cent of that space will be green areas.

    “The unique aspect of our project when you compare it to others is the amount of green space it will have,” says George Tanasijevich, CEO of King Salman Park Foundation.

    “Other projects will have hotel rooms and residential units, but none will have the amount of green space that King Salman Park will have. It will be substantial by global standards.”

    The scale of the project becomes apparent when considering public parks in other major cities. It is five times the area of New York’s Central Park, six times the size of London’s Hyde Park, and 16 times larger than Singapore’s Gardens by the Bay.

    The aim of King Salman Park is to give residents of Riyadh access to a world-class park on their doorstep – the park is connected to several main roads and linked to the Riyadh Metro and the city’s bus station.

    “People today have to travel to experience green spaces, so we are bringing something here that will allow them the convenience of being at home and experiencing the lifestyle benefits of green space,” says Tanasijevich.

    Land at the King Salman Park site has been contoured to create hills

    While much of the focus of Saudi Arabia’s Vision 2030 is on economic transformation, it also includes targets aimed at improving the quality of life for people in the kingdom.

    “There is an economic aspect to what we are doing,” says Tanasijevich. “The primary highlight of our contribution [to Vision 2030] is more focused on lifestyle. It is not just being able to spend time in green spaces, but also all the sports facilities that will encourage younger people to become more interested in sports and athletics.”

    Project progress

    Launched in March 2019, there has been significant progress on the construction of the project. Much of the land has been shaped and contoured to create hills that will break up Riyadh’s typically flat topography.

    Work is also advancing on infrastructure and buildings, including the Royal Arts Complex and a visitor centre.

    “What we are trying to do is put together components that work together as a standalone project that are self-sustaining. We do not want people to visit and feel something is missing,” says Tanasijevich. 

    “We are going to have enough variety and elements in there that even when we open phase one, people are going to embrace it and find a multitude of ways to experience it.”

    As construction advances, the project took a major step forward on the first day of the Cityscape Global exhibition, which was held in Riyadh on 10-13 September. There, the King Salman Park Real Estate Development Fund was launched, with the aim of developing the first real estate investment plot within the site.

    The fund will bring in fresh financing for a SR4bn ($1.1bn) mixed-use project that will have more than 1,500 residential units together with offices, retail outlets, hotels, schools and other public amenities on a 290,000 square-metre site.

    Saudi Fransi Capital is the fund manager and King Salman Park Investment & Real Estate Development Company is the master developer. Naif al-Rajhi Investment Company is the real estate developer and master lessee of the entire project.

    Images: King Salman Park Foundation
    Colin Foreman
  • Amaala multi-utilities contract is valued at $2bn

    21 September 2023

    The contract to develop and operate a multi-utilities infrastructure for the 4,155 square-kilometre Amaala tourism scheme on Saudi Arabia’s Red Sea coast is valued at $2bn, according to an industry source.

    Red Sea Global recently awarded the Amaala multi-utilities contract to a team comprising France’s EDF and UAE-based Abu Dhabi Future Energy Company (Masdar).

    The scope of the contract includes a 250MW solar power plant and 700 megawatt-hour battery energy storage system that will enable Amaala to be powered entirely by solar energy.

    The work scope includes a seawater reverse osmosis plant with a peak capacity of 37,000 cubic metres a day, as well as a sewage treatment plant. Both will be powered by renewable energy.

    MEED understands another French firm, Suez, will implement the water infrastructure component of the project.

    Red Sea Global and the developer team have yet to confirm the engineering, procurement and construction and battery energy storage contractors for the project.  

    Amaala issued the tender for the contract in October 2021. It will be developed using a public-private partnership model.

    In February 2022, Amaala appointed Austria-headquartered ILF Consulting Engineers as technical adviser for the multi-utilities project.

    Concession agreement

    The developer consortium will be responsible for the development; financing; engineering, procurement, construction and installation; testing and commissioning; insurance; ownership; operation and maintenance; and transfer of each of the infrastructure systems under a 25-year concession agreement.  

    Each infrastructure system will be transferred to Amaala at the end of the concession term.

    Owned by Saudi Arabia’s sovereign wealth vehicle, the Public Investment Fund, Amaala includes three communities – Triple Bay, the Coastal Development and the Island – each consisting of several residential, hospitality and retail components.

    Construction works on phase one of Triple Bay have started.

    The scheme is part of the Amaala Tourism Destination Development project.

    Amaala previously planned the project. In October 2022, Amaala merged with The Red Sea Development Company to form a new company called Red Sea Global, which is now implementing the project.
    Jennifer Aguinaldo
  • Saudi Arabia’s $2bn water pipeline expands private sector role

    19 September 2023

    Jennifer Aguinaldo
    Energy & technology editor

    The $2bn Rayis-Rabigh independent water transmission pipeline (IWTP) project in Saudi Arabia further expands the role of private companies in developing and operating public infrastructure assets within the kingdom.

    It could have been just another water pipeline project if not for its scale – it extends 150 kilometres and can transmit up to 500,000 cubic metres of water – and its structure as a 35-year public-private partnership project.

    It also links major municipalities in Medina and Mecca, further increasing the project's strategic importance. 

    The project is reminiscent of the Rabigh 3 independent water project and the Dammam independent sewage treatment plants, which were procured between 2018 and 2019 by the state-backed offtaker Saudi Water Partnership Company (SWPC), formerly known as the Water & Electricity Company.

    The levelised water transmission tariff of SR1.256 ($0.33) a cubic metre is without any precedent, since the project is the first of its kind.

    The Rayis-Rabigh IWTP will utilise the build-operate-transfer model, rather than the build-own-operate project structure employed by the private sector water desalination and water treatment plant projects in the kingdom.

    The project demonstrates the private sector's appetite to win new work that does not necessarily fall within its comfort zone, since all water transmission pipeline projects in the kingdom have previously been procured using the conventional engineering, procurement and construction model.

    A total of 31 companies, including 14 that are locally domiciled, expressed interest in bidding for the Rayis-Rabigh IWTP contract in December 2021.

    The contract was tendered in August 2022 and SWPC received bids in March this year from three teams, including one led by Nesma Company and another led by Vision International.

    Alkhorayef Water & Power Technologies, which leads the winning consortium for the project, said it will now work with the relevant stakeholders to reach financial close on the project.

    If successfully implemented, the project paves the way for seven IWTP projects that the kingdom is planning to procure in 2022-28.

    The market will now focus on the award of the contract for the kingdom's first independent strategic water storage project, also in Mecca, as Saudi Arabia continues to push the limits for private sector participation in previously state-dominated assets.
    Jennifer Aguinaldo
  • Aramco extends Safaniya cogen bid deadline

    18 September 2023

    Saudi Aramco has extended by three months the tender closing date for a contract to develop a cogeneration independent steam and power plant (ISPP) project in Safaniya.

    It now expects to receive bids by December in lieu of the previous bid deadline of 17 September, according to a source close to the project.

    Aramco held a job explanation meeting and site visit for the Safaniya ISPP project in May.

    Aramco issued the tender for the contract for the planned cogeneration ISPP facility, which will cater to Aramco's Safaniya central processing facilities (CPF), in April.

    MEED understands that the electricity generated during the steam production will be supplied to the CPF and offshore oil and water injection facilities through a new 230-kilovolt gas insulation station.

    Under the current plan, the Safaniya CPF will provide fuel gas, desalinated water and steam condensate to the proposed cogeneration plant, treating the oily and process wastewater.

    The plant is expected to have a design capacity of between 500MPPH and 700MPPH steam and 300MW-400MW of power generation. It also entails the capacity expansion of a seawater reverse osmosis (SWRO) plant by 10,000 cubic metres a day (cm/d).

    Aramco expects to implement the cogeneration project on a build-own-operate-transfer (BOOT) basis.

    The plant is expected to be commissioned in 2027 and will remain in service as a capital lease for 25 years from the start-up date.

    It is understood bidders are required to provide committed funding for at least 50 per cent of the project's full senior debt requirement upon the tender closing date.

    The facility is envisaged as the primary power source for the Safaniya CPF.

    Japan’s Sumitomo Mitsui Banking Corporation (SMBC) and US-based White & Case are providing financial and legal advisory services to the project client. Germany's Fichtner is providing technical consultancy services.

    Ongoing cogen projects

    In July last, Korea Electric Power Corporation (Kepco) won the contract to develop Aramco’s Jafurah cogeneration ISPP project.

    The plant will have a power capacity of 270-320MW and a low-pressure (LP) steam demand of 77-166 thousand pounds an hour (klb/hr) and high-pressure (HP) steam demand of 29-126 klb/hour by 2023. The LP and HP steam demand will increase to 283-373 klb/hr and 66-321 klb/hr by 2027, respectively.

    Construction work is under way for Aramco’s Tanajib ISPP and desalination plant. Aramco selected a team comprising Japan’s Marubeni and the UAE-based Abu Dhabi National Energy Company (Taqa) to develop the project in 2020.

    On 19 April, Saudi Aramco Total Refining & Petrochemical Company (Satorp) received proposals for the contract to develop a cogeneration ISPP serving the Amiral petrochemicals project in Jubail.

    It is understood that Satorp has issued a conditional award letter to the preferred bidder for the contract, a team comprising Japan's Jera and the UAE's Abu Dhabi National Energy Company (Taqa).

    The facility is expected to have a power generation capacity of 470MW.
    Jennifer Aguinaldo