Monthly briefing: 14 key developments in the region
21 November 2022
By MEED staff
> Lukewarm Cop27 ends
> UAE and US sign $100bn energy programme
> BlackRock looks to invest in projects with PIF
> Riyadh signs construction deals during Seoul visit
> Middle East outpaces global economic growth
> Riyadh Grade A office occupancy hits 98 per cent
> Dubai developer plans world's tallest residential building
> Saudi Arabia launches national automaker
> Alba reaches Block 4 financial close
> Partners award contracts for $8.5bn US chemicals project
> Investors launch Sohar industrial projects
> Aramco and IBM plan Riyadh innovation hub
COP27
Egypt climate conference ends with agreement on payout
Negotiators from nearly 200 countries at the 2022 UN climate summit Cop27, which took place in Egypt on 6-18 November, have agreed to set up a loss and damage fund aimed at helping vulnerable countries to cope with climate disasters. They also agreed that global greenhouse gas emissions need to be cut nearly in half by 2030.
The agreement also reaffirmed the goal of keeping global warming to 1.5 degrees Celsius above pre-industrial levels. However, a deal to phase out the use of fossil fuels, and not just coal, could not be agreed upon after a number of nations, including China and Saudi Arabia, blocked the proposal. Read more
The Middle East was thrust firmly onto the global stage on 20 November when football’s 2022 World Cup kicked off in Qatar
Region pitches to be global sporting hub
OIL
Opec and non-Opec partners cut 2 million b/d of production
Saudi Arabia, the world’s largest crude oil exporter, has started to cut its exports as Opec+ begins to reduce its overall target production by 2 million barrels a day (b/d).
Saudi Arabia had cut its crude oil exports by more than 400,000 b/d by the third week of November, while exports from Opec could be on course to drop by 1 million b/d.
In October, Opec+ announced it would slash its collective target by 2 million b/d from November. Although the actual reduction is expected to be about 1.1 million b/d, it is still the biggest cut since the record reduction announced in April 2020, when oil demand plunged at the start of the pandemic.
UAE-US DEAL
UAE and US sign $100bn clean energy partnership
The UAE and the US have signed a partnership that aims to catalyse $100bn in financing and other support, in addition to deploying 100GW of clean energy in the US, UAE and emerging economies around the world by 2035. They also reaffirmed their commitment to climate action, in line with their 2050 net-zero goals.
The two countries plan to stimulate private and public sector support in four areas: clean energy innovation, financing, deployment and supply chains; carbon and methane management; advanced reactors; and industrial and transport decarbonisation. Read more
PIF-BLACKROCK PARTNERSHIP
PIF and BlackRock agree to explore infrastructure projects
Saudi Arabia’s Public Investment Fund (PIF) has signed a non-binding memorandum of understanding with US asset manager BlackRock to jointly explore infrastructure projects in the Middle East, with a majority of the investment activity focused on Saudi Arabia.
The target projects are in several sectors, including energy, power, utilities, water, environment, transportation, telecommunications and social infrastructure.
BlackRock will look to build a dedicated infrastructure investment team in Riyadh to cover the Middle East region.
In a statement, the PIF said that the aim is to leverage positive Saudi and regional market dynamics to deliver sustainable long-term returns.
The sovereign wealth fund added that the two entities plan to work together to attract regional and international investors to participate in investment projects, and boost foreign direct investment into Saudi Arabia.
This will add value to the Saudi economy and the wider market while facilitating knowledge and skills transfer. Read more
ECONOMIC OUTLOOK
IMF predicts economic growth for the Middle East in 2022
The real GDP of oil exporting countries in the Middle East is projected to grow at 5.2 per cent in 2022, up from 4.5 per cent in 2021, according to the Washington-based IMF.
Growth is projected to slow to 3.5 per cent in 2023 as Opec+ production wanes, oil prices ease and global demand slows.
Crude producers are projected to accrue a cumulative oil windfall of about $1tn in 2022−26, which the IMF said oil-exporting countries like Saudi Arabia and the UAE could use to continue to invest in projects that support future economic growth. Read more
SAUDI-KOREA PROJECTS
Deals worth $30bn signed during royal visit to Seoul
Agreements totalling an estimated $30bn were signed during Saudi Crown Prince Mohammed bin Salman al-Saud’s visit to Seoul, South Korea on 17 November.
The biggest deal was a commitment from Saudi Aramco to invest $7bn in building an integrated refinery and petrochemicals complex in South Korea through its local affiliate S-Oil.
The new plant will have capacity to produce 3.2 million tonnes a year of petrochemicals.
Five South Korean companies – Korea Electric Power Corporation (Kepco), Korea Southern Power Company, Korea National Oil Corporation, Posco Holdings and Samsung C&T Corporation – have also signed agreements with Saudi Arabia’s Public Investment Fund to build and operate a green hydrogen and green ammonia production facility in Saudi Arabia. Read more
RIYADH REAL ESTATE
Riyadh Grade A office occupancy hits 98 per cent
Occupancy levels for prime office space in Riyadh have risen by four percentage points to 98 per cent according to a report by property consultancy Knight Frank.
Average lease rates for prime office space have increased by 18 per cent over the past 12 months to about SR1,775 ($473) a square foot. The company said there is unprecedented demand for Grade A office space.
“As the kingdom’s economic transformation plan unfolds, business activity is rising at an extraordinary pace. Seventy firms have now committed to relocating their regional headquarters to Riyadh, including Aldeham Education Group and French rolling stock manufacturer Alstom,” Knight Frank said. Read more
UAE
Dubai developer plans world’s tallest residential building
Local real estate developer Binghatti and jewellery brand Jacob & Co have announced plans to build the world’s tallest residential structure in Dubai’s Business Bay district.
Known as Burj Binghatti Jacob & Co Residences, the tower will comprise more than 100 storeys and will offer two- and three-bedroom apartments. Amenities in the building will include an infinity pool, a spa and a gymnasium.
Companies recently moved onsite in Business Bay to work on a 116-storey tower for Binghatti. The contractor is Granada Europe Construction. The consultant is Silver Stone Engineering Consultants. Read more
ELECTRIC VEHICLES
Saudi Arabia launches electric vehicle manufacturer
Saudi Arabia’s Crown Prince Mohammad bin Salman al-Saud has announced the launch of Ceer, the first Saudi electric vehicle brand. Ceer is the first Saudi automotive brand to produce electric vehicles in Saudi Arabia.
The company is a joint venture of Saudi sovereign wealth entity the Public Investment Fund and Taiwan-based Hon Hai Precision Industry Company, which trades as Foxconn internationally.
Foxconn will license component technology from BMW for use in the vehicle development process, with the first vehicles – sedans and sports utility vehicles – expected to be available in 2025.
Foxconn will develop the electrical architecture of the vehicles, which will feature infotainment, connectivity and autonomous driving technologies.
Ceer is expected to attract over $150m in foreign direct investment and create up to 30,000 direct and indirect jobs. Read more
Further reading
Alba agrees Block 4 financing
Aluminium Bahrain (Alba) has reached financial close on the 681MW combined-cycle gas turbine plant that comprises Block 4 of the smelter’s Power Station 5. China Export & Credit Insurance Corporation (Sinosure) will provide a $225m facility.
Contracts awarded for US plant
QatarEnergy and Chevron Phillips Chemical Company have reached final investment decision on the Golden Triangle Polymers Plant, an $8.5bn integrated polymers facility in the US. The plant will include the biggest ethylene cracker in the world with a capacity of 2.1 million tonnes a year.
Investors launch Sohar projects
Investors have launched two non-oil industrial projects in Sohar Freezone in Oman. The sultanate’s first petroleum coke calcining facility will be built at a total investment of about $155.9m, while a titanium dioxide production facility will be established at a cost of $112m.
Aramco plans innovation hub
Saudi Aramco and US technology company IBM plan to establish an innovation hub in Riyadh. The hub will support tech-driven economic growth in Saudi Arabia with the help of emerging technologies in hybrid cloud, artificial intelligence and quantum computing.
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Exclusive from Meed
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Dewa retenders pumping stations package18 March 2025
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Tabreed confirms $408m Palm Jebel Ali deal17 March 2025
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Alkhorayef wins four water contracts17 March 2025
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Firms prepare Al-Zarraf solar PV bids17 March 2025
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Dewa retenders pumping stations package
18 March 2025
State utility Dubai Electricity & Water Authority (Dewa) has retendered a contract to build pumping stations and related facilities in the emirate.
The contract covers the construction of a pumping station (PS6) catering to the 30-million-imperial-gallons-a-day Ghafat Idah reservoir complex and another pumping station on Endurance Road (PS21), phase one, stream A.
The contract covers all electro-mechanical and supervisory control and data acquisition (Scada) works.Dewa expects to receive bids for the retendered contract by 15 May.
The tender requires interested firms to submit a bid bond of AED5m ($1.37m).
Dewa first tendered the contract in April last year and received six bids three months later.
Local contracting company Sawaed Alqafelah General Contracting (Syed Contracting) submitted the lowest bid of AED78.76m ($21.44m).
Japan’s Torishima Pump Manufacturing Company – the only non-local bidder – offered the second-lowest bid of AED86.05m, with an optional offer of AED85.12m.
The other bidders and their offers were:
- Danway Electrical & Mechanical (local): AED99.4m
- Binghalib Technology (local): AED179.24m (main); AED 174.96m (option one)
- Green Oasis General Contracting (local): AED200.18m
- Emarat Aloula Contracting (local): AED242.69m (main); AED239.08m (option one)
Three companies declined to bid for the contract, including India’s Larsen & Toubro, the local Lindenberg Emirates and United Engineering Construction.
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Tabreed confirms $408m Palm Jebel Ali deal
17 March 2025
Abu Dhabi-headquartered National Central Cooling Company (Tabreed) has signed a concession agreement with Dubai Holding Investments, part of Dubai Holding, to provide district cooling services for Palm Jebel Ali in Dubai.
MEED reported in January that talks were under way for a contract to develop new district cooling plants on Palm Jebel Ali, with an initial capacity of 25,000 refrigeration tonnes (RTs).
Tabreed said the system will address the need for approximately 250,000 RTs of cooling capacity and require an estimated investment of AED1.5bn ($408m) over multiple phases, making it one of the largest district cooling plant projects ever awarded in the UAE.
In a statement, Tabreed said the agreement establishes a joint venture, with Tabreed holding a 51% stake and Dubai Holding Investments retaining the remaining 49%.
Tabreed’s major shareholders, sovereign investor Mubadala (42%) and French utility developer Engie (40%), supported the firm’s proposal to develop the project.
Tabreed CEO Khalid Al-Marzooqi and Dubai Holding Investments CEO Omar Karim signed the agreement in the presence of senior officials from Tabreed, Dubai Holding, Mubadala and Engie.
The construction of the district cooling network is expected to commence in Q2 2025, with the first cooling services expected to be delivered by 2027.
The deal is subject to customary approvals.
Tabreed acquired an 80% stake in Emaar Property’s Downtown Dubai district cooling business at a cost of AED2.48bn ($675m) in 2020.
Tabreed raised AED700m ($190.6m) via an inaugural, five-year green sukuk as the first issuance under its new $1.5bn trust certificate issuance scheme, the firm said in early March.
The firm reported a revenue of AED2.4bn and a net profit before tax of AED624m in 2024, representing a 4% increase over 2023, excluding one-offs.
Its Ebitda increased by 5% year-on-year to AED1.25bn, with an improved margin of 51%. Net profit after tax stood at AED570m, up 32% compared to AED431m in 2023.
Mixed-use developments in the region commonly deploy district cooling. The process involves using a central chiller plant to cool water, which is circulated to multiple buildings to provide cooling.
It is considered more energy-efficient, consuming at least 20% less electricity than conventional air-cooled or individual water-cooled air conditioning systems.
Photo credit: Tabreed
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Alkhorayef wins four water contracts
17 March 2025
The local firm Alkhorayef Water & Power Technologies Company has won the contract to operate and maintain four water treatment plants in Saudi Arabia.
The water treatment plants are located in Wadi Aldawaser, Alsalil, Alsafa in Najran and Alwajid.
According to a company filing, the contract is worth SR58.78m ($15.7m).
Saudi Water Authority, formerly Saline Water Conversion Company (SWCC), awarded the contract to Alkhorayef on 16 March.
In July last year, Saudi Arabia’s National Water Company (NWC) awarded contracts to install new water and wastewater connections across six regions in Saudi Arabia.
The 36-month contracts, described as blanket purchase agreements, were worth SR190.8m ($50.8m).
The water and wastewater connections will be located in Al-Qassim, Hail and Jizan and in the north, south and central sectors of the kingdom’s Eastern Region.
MEED’s April 2025 report on Saudi Arabia includes:
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
> CONSTRUCTION: Reprioritisation underpins Saudi construction
> TRANSPORT: Riyadh pushes ahead with infrastructure development
> BANKING: Saudi banks work to keep pace with credit expansionhttps://image.digitalinsightresearch.in/uploads/NewsArticle/13498519/main.jpg -
Firms prepare Al-Zarraf solar PV bids
17 March 2025
Prequalified firms have approximately three months to form consortiums and prepare proposals for a contract to develop Abu Dhabi’s fifth utility-scale solar photovoltaic (PV) independent power project (IPP).
State utility Emirates Water & Electricity Company (Ewec) prequalified 16 companies that can bid for the Al-Zarraf solar IPP, also known as PV5, which will have a capacity of 1,500MW.
Industry sources say up to five consortiums are being formed to bid for the contract as of mid-March.
The 10 firms that may bid as managing members of the bidding consortiums are:
- AlJomaih Energy & Water (Saudi Arabia)
- EDF Renewables (France)
- International Power (Engie)
- Jera Nex (Japan)
- Jinko Power (Hong Kong)
- Korea Electric Power Corporation (Kepco, South Korea)
- Korea Western Power Company (Kowepo)
- Marubeni Corporation (Japan)
- SPIC Hunaghe Hydropower Development Company (China)
- Sumitomo Corporation (Japan)
The following six companies may bid as consortium members:
- Alfanar Company (Saudi Arabia)
- Alghanim International General Trading & Contracting (Kuwait)
- China Power Engineering Consulting Group International Engineering Company (CPECC, China)
- Etihad Water & Electricity (UAE)
- Orascom Construction (Egypt)
- PowerChina International Group (China)
Ewec received expressions of interest for the contract from 20 companies and consortiums in October last year and issued the tender in January.
It expects to receive bids for the contract by 12 June, one of the sources said.
Like the first four solar IPPs tendered by Ewec, the Al-Zarraf solar IPP will involve the development, financing, construction, operation, maintenance and ownership of the solar PV plant and associated infrastructure.
The successful bidder or consortium will enter into a long-term power-purchase agreement with Ewec as the sole procurer of electricity.
Ewec opened the bids for its fourth utility-scale solar project, the Al-Khazna solar IPP or PV4, on 30 October.
Engie offered a levelised cost of electricity (LCOE) of AED fils 5.35502 ($c1.459) a kilowatt-hour (kWh) for the contract, beating by roughly 3% the second-lowest offer made by a team of China’s Jinko Power and Japan’s Jera of AED fils 5.54126/kWh.
A team of France’s EDF Renewables and its partner, Korea Western Power Company (Kowepo), emerged with the highest offer of AED fils 5.86311/kWh.
Ewec is expected to award the Al-Khazna solar IPP contract to Engie around the second quarter of this year, as MEED reported.
Successful PV bidders
In 2016, a team of Japan’s Marubeni and Jinko Power won the contract to develop and operate Abu Dhabi’s first utility-scale solar PV project in Sweihan, the 934MW Noor Abu Dhabi IPP.
Four years later, in 2020, a team comprising EDF Renewables and Jinko Power won the contract to develop the 1,500MW Al-Dhafra solar PV, which was inaugurated last year.
In April 2024, Ewec awarded the contract to develop PV3, the 1,500MW Al-Ajban solar IPP, to a team led by EDF Renewables and including Kowepo.
Ewec forecasts that at least 18,000MW of solar PV will be in operation by 2035, supporting the realisation of the Abu Dhabi Department of Energy’s Clean Energy Strategic Target 2035.
The programme envisages renewable and clean energy sources meeting 60% of the emirate’s total power demand at the end of the forecast period.
MEED’s April 2025 report on Saudi Arabia includes:
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
> CONSTRUCTION: Reprioritisation underpins Saudi construction
> TRANSPORT: Riyadh pushes ahead with infrastructure development
> BANKING: Saudi banks work to keep pace with credit expansionhttps://image.digitalinsightresearch.in/uploads/NewsArticle/13498422/main.jpg -
Contractors submit final offers for Diriyah Arena district
17 March 2025
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Saudi Arabia’s Diriyah Company has received the last and final offers from firms for the contract to build the Arena Block assets in the Boulevard Southwest section in the DG2 area of the Diriyah gigaproject.
MEED understands that final proposals were submitted last week and the award is expected shortly for the multibillion-riyal package, which consists of mixed-use facilities, including offices.
Tendering activity is also progressing on several other major schemes at Diriyah, including the Royal Diriyah Opera House project. It is understood that the bid evaluation has reached the final stages and the contract will likely be finalised in March.
In January, the client also asked firms to prequalify for a contract to build a new museum in the DG2 area of the Diriyah project.
MEED previously reported that Diriyah Company had asked firms to prequalify for another contract covering the infrastructure development works in the DG2 area of Diriyah.
Developed by Diriyah Company, the Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it covers 14 square kilometres and combines 300 years of history, culture and heritage with hospitality facilities.
The company awarded several significant contracts last year, including two major contracts worth over SR16bn ($4bn). These include 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 house 100,000 residents and visitors.
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