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Power market reshapes contractor landscape

16 October 2025

Commentary
Mark Dowdall
Power & water editor

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The number of UAE-based power projects awarded under the traditional engineering, procurement and construction (EPC) model has fallen to its lowest level in the past decade.

Admittedly, this does not include the Covid year of 2020, but the point stands. Across the GCC, capital is still flowing into the sector at record levels. What has changed is how that capital is being deployed.

In a recent analysis, I revealed 2025 to be a record-breaking year, with the UAE’s power market recording its highest annual total for contract awards on record. Yet instead of a broad spread of smaller contracts, governments and utilities are concentrating investment in fewer larger and more complex schemes that are reshaping how the region’s energy systems are built and financed.

In 2025, a single solar and battery storage independent power project (IPP) in Abu Dhabi accounts for 67% of the country’s total power contract value. EPC contracts, once the mainstay of the market, have been eclipsed by developer-led models as the preferred route for large-scale power generation.

Saudi Arabia is moving in the same direction, albeit at a different pace. While EPC work remains central to grid expansion, the kingdom’s largest investments are now in utility-scale IPPs backed by the Public Investment Fund.

In my recent annual ranking of private power developers across the GCC, the surge in power generation capacity owned by Saudi Arabia’s Acwa Power was telling. Not only did the firm’s net equity grow by 70% in a single year, but it now eclipses the combined equity of the other leading developers in the region, a direct result of its dominant role in PIF-backed schemes. These projects, including multi-gigawatt solar and wind developments, are redefining the scale and structure of procurement.

Behind this shift is a combination of market maturity, financing strategy and energy transition goals. Developer-led projects concentrate capital and risk in fewer hands, streamline procurement timelines and align closely with long-term policy objectives.

For governments, they deliver capacity without requiring large upfront capital commitments. For developers, they offer stable, long-term returns through secure offtake agreements.

But this concentration also narrows the field of opportunity. Where dozens of smaller EPC packages once supported a broad ecosystem of contractors and suppliers, today’s market is increasingly revolving around a handful of mega deals.

Competition is intensifying for fewer projects, and entry barriers, ranging from balance sheet strength to technical capabilities, are rising.

Smaller EPC contractors, once central to power delivery across the GCC, risk being pushed to the margins. Some will adapt by partnering with larger developers, but others may find fewer opportunities to participate.

Which takes me back to the UAE. In the water sector, 2026 is already shaping up to be a landmark year, with nearly $31bn-worth of projects in tender. A single project, Dubai’s $22bn Strategic Sewerage Tunnel scheme, accounts for over 70% of this total.

It will follow a public-private partnership (PPP) delivery model that consolidates the entire scope under one consortium, streamlining delivery. However, this approach significantly reduces the number of prime contracting opportunities, with smaller EPC firms more likely to find themselves competing for limited subcontracting roles rather than leading bids.

It is important to note that while large-scale projects tend to dominate during major build-out phases, attention inevitably turns to smaller, more distributed schemes.

However, this alone does not necessarily mean a return to the EPC-heavy landscape of the past. For now, as these large projects set the pace, the region’s energy transition may accelerate, but it will also decide who gets to reshape and build it.

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Mark Dowdall

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