meed-logo

line1 line2 line3
SIGN IN / REGISTER

PPP activity rebounds in 2023

26 October 2023

 

This report on project finance and PPP also includes: Liquidity drives project finance appetite

There has been an increase in both the number and value of public-private partnership (PPP) contract awards made across the Middle East and North Africa region in 2023, according to data from regional projects tracker MEED Projects.

The total value of PPP deals from January to early October has already overtaken the value of awards made in 2022. To date, $21.3bn of PPP deals have been finalised in 2023, compared to $18.1bn in 2022, representing a rise of 18 per cent.

With most of the final quarter of the year still to go, there is every chance that the 2021 total of $22.6bn will also be surpassed. In the five years before that, the total was at most about $12bn a year, underlining the healthy position of the market at the moment.

However, the longer-term record high of $29.6bn, set in 2009, still appears to be out of reach.

In numerical terms the picture is more balanced, with 34 PPP contract awards to date in 2023, compared to 44 in 2022 and 47 in 2021. However, the average size of PPP contracts being handed out this year is significantly up, at $627m an award so far in 2023 compared to $401m in 2022 and $482m in 2021.

Water and transport lead the way

The surge in deal-making has been particularly evident in the water sector, where $9.3bn-worth of deals have been signed this year, far ahead of last year’s figure of $3.6bn.

The largest of these is a $2.2bn contract for Abu Dhabi National Oil Company’s Mirfa seawater treatment plant. A consortium of Orascom Construction and Metito has been appointed to develop the project.

Just behind this in terms of value is the $2.1bn contract to install a water transmission pipeline from the Ar-Rayis1 independent water plant to Rabigh for Saudi Water Partnerships Company. The contract was won by a consortium of Cobra Group, Al-Khorayef Water & Power Technologies and Orascom Construction.

The transport sector has also been performing well, with $5.3bn-worth of contracts in 2023, significantly more than the $428m in 2022. The biggest schemes include a $2.2bn contract for Iran’s Roads & Urban Development Ministry to expand capacity at Tehran’s Imam Khomeini International airport, for which a joint venture of Hycan Automobile Technology Company and Khatam al-Anbia was appointed in September.

Another major contract is the $1.9bn deal that Saudi Ports Authority (Mawani) signed with China Harbour Engineering Company to upgrade Terminal 1 and expand Terminal 2 at King Abdulaziz Port in Dammam.

Construction and power struggle

There has been a relative decline in other areas, however, and most notably in construction. The high level of activity seen in the sector in 2022 has not been sustained, with contract values falling by two-thirds so far this year to $1.6bn. The number of PPP awards in the sector has also fallen, from 14 in 2022 to seven so far in 2023 – the lowest figure for this part of the market since 2019.

The power sector looks set to continue its recovery, with several solar and wind independent power projects (IPPs) in Saudi Arabia expected to be awarded before the end of the year. An estimated $4.9bn-worth of deals have been awarded in the first nine months of 2023. 

The expected award of the Saudi IPP contracts, as well as the third solar photovoltaic project in Abu Dhabi, indicates that the total value of power deals this year could equal or exceed that of last year.

PPP deals in the power sector – which pioneered the model in the region – account for 139 of the 332 contracts awarded between 2015 and 2023. This is followed by the water sector with a further 86 contracts, construction with 50 awards and transport with 31 deals. The remaining contracts were awarded in the chemicals, oil and gas and industrial sectors.

Within the power sector there has been a preference for build, own and operate (BOO) contracts, with 84 in total over the period, worth a combined $30.1bn; and build, operate and transfer (BOT) contracts, of which there have been a further 76, worth $20.1bn. In the water sector, the contracts are more evenly spread between BOO, BOT and build-own-operate-transfer (BOOT) schemes, while both the transport and construction sectors tend to favour BOT models.

Across all sectors, BOT, BOO and BOOT contracts account for 77 per cent of all contracts by value in the period under review. BOT emerged as the frontrunner in 2023 in terms of the value of awards, having been second to BOO contracts last year.

For most of the past decade, these two contract models have been the dominant ones, although BOOT was far ahead of the pack in 2021 thanks to the award of a $6bn contract that year by Algeria’s Transport Ministry for the development of El-Hamdania Port.

Gulf economies remain dominant

The most important markets in the region for PPP deals in 2023 are Saudi Arabia, with $11.6bn-worth of contract awards, followed by the UAE with $5.7bn and Iran with $2.2bn – the latter almost wholly because of the Tehran airport deal.

Among the other major contracts in these markets is a $2bn deal signed by Red Sea Global in September with a team of Masdar, EDF and Korea East-West Power Company for a multi-utilities package at the Amaala development, including a solar power plant, battery storage, sewage treatment and a desalination plant.

Also notable is Etihad Rail’s $800m contract with National Infrastructure Construction Company and National Projects & Construction in early October for the first phase of the light rail network in Abu Dhabi.

No other country has yet broken through the $1bn mark in terms of PPP contract awards in 2023, although Oman may yet do so. So far this year, the sultanate has seen the award of $824m-worth of projects, including two $400m contracts awarded by Oman Wastewater Services Company to develop solar power plants at Manah, southwest of Muscat.

This year’s figure is the highest for the sultanate in several years and marks a step-change from its recent performance. In 2021 and 2022, PPP contracts worth just $50m and $60m were signed, respectively.

Other markets have been performing more poorly. Both Egypt and Iraq have seen the level of activity slump significantly, with just $520m-worth of contracts in Egypt so far this year, compared to $3.6bn in 2022. Iraq has seen no PPP contract awards in 2023 at all, after two bumper years in which $8.5bn worth of deals were finalised in 2021 and $3.7bn in 2022.

The fall in these markets is a further sign of the wider problems facing their economies and could be a signal that private-sector actors are increasingly wary of signing up to long-term deals in such uncertain economic and political environments.

Among other, smaller markets, there have been signs of activity in both Bahrain and Tunisia, with one and two deals respectively this year, after no activity was recorded in either market last year. 

https://image.digitalinsightresearch.in/uploads/NewsArticle/11227112/main.gif
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Construction advances on Riyadh King Salman airport

    19 May 2026

    King Salman International Airport (KSIA) is advancing airside infrastructure works under its long-term expansion programme in Riyadh, including the delivery of a third runway and new private aviation facilities.

    Construction activity on the central runway programme is progressing across several operational zones, with works covering excavation, grading, site preparation and taxiway-enabling infrastructure to support upcoming phases.

    The third runway is intended to increase airfield capacity and cater to the airport’s future operational requirements.

    In a separate development, KSIA has completed initial landside works for the private aviation apron, marking a milestone in the rollout of its executive aviation infrastructure.

    The completed scope includes pavement markings, waterproofing systems, firefighting infrastructure chambers and final operational inspections to support readiness for the next stages.

    KSIA has also secured General Authority of Civil Aviation (GACA) approval for phase one airside works, which includes the planned connection of Taxiway Alpha to the private aviation facilities, strengthening operational integration between executive aviation assets and airfield movement areas.

    The packages form part of the wider KSIA masterplan, which covers about 57 square kilometres and supports Saudi Arabia’s objective of positioning Riyadh as a global aviation and logistics hub.

    The airport aims to accommodate up to 100 million passengers by 2030.

    Saudi Arabia plans to invest $100bn in its aviation sector. The Saudi Aviation Strategy, announced by GACA, aims to triple annual passenger traffic to 330 million travellers by 2030. It also targets air cargo growth to 4.5 million tonnes and an increase in total air connections to more than 250 destinations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16906496/main.jpeg
    Yasir Iqbal
  • Aldar launches Al-Ghadeer Gardens project

    19 May 2026

    Abu Dhabi-based real estate developer Aldar Properties has launched the Al-Ghadeer Gardens project, located on the Abu Dhabi-Dubai border.

    The new residential development will feature 437 villas and townhouses, offering two-, three- and four-bedroom homes.

    Al-Ghadeer Gardens will include more than 30,000 square metres of landscaped open space, supporting a pedestrian-friendly layout and outdoor-focused living.

    As part of its sustainability and wellbeing approach, the project is targeting Estidama Pearl 2 and Fitwel 2-star certifications.

    Earlier this month, Aldar announced its Q1 financial results, reporting a 20% year-on-year increase in net profit after tax to AED2.3bn ($626m).

    Aldar Development recorded a 14% year-on-year rise in revenue to $1.7bn, while earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 23% to $599m.

    UAE revenue backlog rose to $17bn at the end of March from $16.6bn at the end of December, with an average duration of 29 months.

    The group attributed its performance to revenue from its development backlog and steady income from its investment properties.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16906154/main.jpg
    Yasir Iqbal
  • Iraq trucks oil from the south to Kurdish pipeline

    19 May 2026

     

    Iraq is trucking crude from Basra to the north of the country to be exported via the Iraq-Turkiye Pipeline (ITP), according to industry sources.

    The oil is being loaded into trucks at fields in Basra before being driven to the north, where it is injected into the pipeline network at Khurmala Dome, in the northern section of the Kirkuk field.

    Once it has entered the network at Khurmala Dome, it is transported to the main ITP export pipeline and eventually to the port of Ceyhan in Turkiye, where it can be loaded onto ships.

    The volumes of crude being transported using trucks have surged in Iraq since the US and Israel attacked Iran on 28 February, starting a regional conflict that has disrupted shipping through the Strait of Hormuz.

    One source said: “Most of the crude that is being trucked out of Iraqi oil fields at the moment is going to Syria, but some is being trucked to the north where it is being funnelled through the pipeline.”

    Even with the additional volumes being trucked from the south, Iraq is struggling to boost exports using the ITP.

    At the end of March, Amer Khalil, the director-general of Iraq’s state-run North Oil Company, said that Iraq was exporting 200,000 barrels a day (b/d) through the ITP.

    At the time, he said that the pipeline, which runs from Kirkuk in Iraqi Kurdistan to the port of Ceyhan in Turkiye, was expected to start transporting 300,000 b/d “in the near future”.

    As of early May, the pipeline was still exporting about 200,000 b/d, despite having a nameplate capacity of 1.4 million b/d.

    One of the factors said to be stopping increased volumes from being shipped through the pipeline is that several key oil fields in northern Iraq evacuated staff and stopped production after the US and Israel started their war with Iran.

    Another factor is that Iraq has not invested in domestic pipeline infrastructure to pipe production from Basra to Kurdistan, where it could be exported via the Kurdish ITP route.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16902345/main1824.jpg
    Wil Crisp
  • Kuwaiti oil services company secures credit facility

    19 May 2026

    The Kuwaiti drilling and oilfield services provider Action Energy Company (AEC) has secured a new credit facility and renewed and expanded an existing facility in order to support the company’s rig fleet expansion.

    The new facility and the expansion were obtained from two Kuwaiti banks and had a combined value of KD40.9m ($132.8m).

    In its statement, AEC said that the facilities support the financing and deployment of new rigs linked to contract awards previously announced with the state-owned upstream operator Kuwait Oil Company (KOC).

    The company added: “They further reinforce AEC’s financing structure and strengthen its ability to execute its contracted fleet expansion plan through 2026 and beyond, while maintaining a disciplined approach to capital allocation.”

    The new credit facility was obtained from Kuwait International Bank (KIB).

    It is worth KD7.3m ($23.7m) and will finance two new 750-horsepower (HP) rigs.

    The renewal and expansion of the existing facility is worth KD33.6m ($109.1m) and was obtained from Commercial Bank of Kuwait (CBK) to finance four new 1,500 HP rigs and one 1,000 HP rig, in addition to the renewal of the existing facilities.

    AEC announced its financial and operational performance for the first quarter earlier this month.

    The company reported a net profit of KD2.2m ($7.1m).

    The company’s revenue grew by 69.2% year-on-year, primarily driven by the expansion of the operating rig fleet from 13 rigs in the first quarter of 2025 to 20 rigs in the first quarter of 2026, including the full-quarter contribution of 10 new rigs deployed during 2025.

    The company is benefitting from a substantial multi-year contracted backlog with KOC.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16902234/main.jpg
    Wil Crisp
  • Emirates awards $5bn engineering complex deal

    18 May 2026

    Register for MEED’s 14-day trial access 

    Emirates Airline has awarded a AED19bn ($5bn) contract to build one of the world's largest engineering complexes in Dubai South.

    The contract was awarded to Beijing-headquartered China Railway Construction Corporation (CRCC).

    CRCC is being supported by French firm Artelia, as the project consultant.

    The complex will cover over 1 million square metres (sq m).

    It will comprise 77,000 sq m of dedicated workshop space for maintenance and repairs, 380,000 sq m of storage and logistics capacity, a 50,000 sq m administrative building for Emirates Engineering and 15,000 sq m of training facilities.

    It will be the world's only complex with a capacity to service 28 wide-body aircraft simultaneously.

    The airline officially broke ground on the project on 18 May. 

    The groundbreaking ceremony was attended by Sheikh Ahmed Bin Saeed Al-Maktoum, chairman and CEO of Emirates Group; Tim Clark, president of Emirates Airline; Khalifa Al-Zaffin, executive chairman of Dubai Aviation City Corporation and Dubai South; and Dai Hegen, chairman of CRCC.

    The facility will enable large-scale retrofits, cabin redesigns and structural modifications to be performed in-house, thereby reducing turnaround times.

    The engineering complex is scheduled for completion in 2030 and will be located at Al-Maktoum International airport.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16895218/main.jpg
    Yasir Iqbal