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
  • UAE firm wins contract for battery storage project

    10 October 2025

    Etihad Water & Electricity (EtihadWE) has won the award to develop the UAE’s largest grid-side energy storage project to be awarded through open tender. 

    Its subsidiary, Emirates Utilities Development Company (EUDC), will develop and operate the project, its first since its establishment.

    Chinese firm Dongfang International has been appointed as the EPC contractor.

    Called Bess 1, the project closely follows the model of Abu Dhabi’s independent power project (IPP) programme, in which developers enter into a long-term energy storage agreement (ESA) with Ewec as the sole procurer.

    The contract was signed at the Ministry of Energy in Abu Dhabi in the presence of senior officials from Dongfang Electric Corporation, EtihadWE and EUDC. 

    In April, MEED reported that Ewec had received proposals for the facility, which is expected to provide a total storage capacity of close to 1GWh across two sites, Al-Bihouth and Madinat Zayed. It will also include supporting booster stations.

    It is understood that the ESA will be for 15 years, commencing on the project’s commercial operation date, which falls in the third quarter of 2026. 

    The overall capacity of deployed bess globally is expected to reach 127GW by 2027, up from an estimated cumulative deployment of 36.7GW at the end of 2023, according to a recent GlobalData report.

    The report named Chinese companies BYD and CATL and South Korean companies LG Energy Solutions and Samsung SDI among the top battery technology providers globally.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14843641/main.jpg
    Mark Dowdall
  • Ashghal seeks firms for sports facilities upgrade

    10 October 2025

     

    Qatar’s Public Works Authority (Ashghal) has tendered a contract inviting consultants to bid for post‑contract professional consultancy services for the upgrade and renovation of Ministry of Sports & Youth facilities in the south sector.

    The assets include Qatar Bowling Centre, Al-Ahli Sports Club, Al-Arabi Sports Club, Al-Sadd Sports Club, Qatar Sports Club, Al-Wakrah Sports Club, Gharrafa Sports Club, Duhail Sports Club and Al-Khor Sports Club.

    The notice was issued on 5 October, with a closing date of 26 October.

    The contract duration is two years and seven months, which includes a 400‑day maintenance period.

    The latest notice follows tendering for the construction of roads and infrastructure in the town of Smaisma.

    The contract covers package two in the south area of Smaisma, located 52 kilometres (km) north of Hamad International airport.

    Market overview

    After 2019, there was a consistent year-on-year decline in contract awards in Qatar’s construction and transport sectors. The total value of awards in that year was $13.5bn, but by 2023 it had fallen to just over $1.2bn.

    In 2024, the value of project contract awards increased to $1.7bn, bucking the downward trend in the market in the preceding four years.

    Of last year’s figure, the construction sector accounted for contract awards of over $1.2bn, while transport contract awards were about $200m.

    There are strategic projects in the bidding phase in Qatar worth more than $5bn, and these are expected to provide renewed impetus to the construction and transportation market, presenting opportunities for contractors in the near term.

    READ THE OCTOBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Private sector takes on expanded role; Riyadh shifts towards strategic expenditure; MEED’s 2025 power developer ranking

    Distributed to senior decision-makers in the region and around the world, the October 2025 edition of MEED Business Review includes:

    > AGENDA 1: A new dawn for PPPs
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14843114/main.png
    Yasir Iqbal
  • Tendering begins for $1bn Sal Riyadh logistics centre

    10 October 2025

    Saudi Arabia’s Sal has started the tendering process for its upcoming SR4.2bn ($1bn) logistics zone in Falcon City, north of Riyadh.

    The tender for the earthworks package was issued on 21 September, with a submission deadline of 7 October.

    UAE-based Global Engineering Consultants is the project consultant.

    Earlier this week, the firm signed a lease agreement for the project, which will span about 1.57 million square metres (sq m). 

    According to an official statement: “The lease will extend for 30 years, which is further extendable to an additional 15 years upon agreement of both parties.”

    The logistics hub aims to meet the demand for customised warehouses located near King Khalid International airport and the Riyadh Metro.

    The project is in line with Vision 2030 and the National Transport & Logistics Strategy, which aims to support the kingdom’s logistics sector and enhance Saudi Arabia’s position as a global logistics hub.

    Sal and Sela signed an agreement to develop the project in March.

    GlobalData expects the kingdom’s construction industry to record an annual average growth rate of 5.2% in 2025-28, supported by investments in transport, electricity, housing and tourism infrastructure projects, as well as the $850bn-plus gigaprojects programme.

    Growth will also be supported by government investments in rail, dams, industrial and road infrastructure projects. 

    The industrial sector is estimated to grow by 3.3% in 2025-28, supported by investments in the development of manufacturing, logistics, chemicals and pharmaceuticals plants.

    READ THE OCTOBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Private sector takes on expanded role; Riyadh shifts towards strategic expenditure; MEED’s 2025 power developer ranking

    Distributed to senior decision-makers in the region and around the world, the October 2025 edition of MEED Business Review includes:

    > AGENDA 1: A new dawn for PPPs
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14842592/main.gif
    Yasir Iqbal
  • Oman tenders consultancy for dams and reservoir study

    10 October 2025

    Oman’s Ministry of Agricultural, Fisheries Wealth & Water Resources has opened bidding for consultancy services covering feasibility studies and detailed designs for recharge dams, artificial reservoirs and flood protection dams in Wilayat Mahdah, Al-Buraimi governorate.

    The bid submission deadline is 16 November.

    The selected consultant will conduct a comprehensive feasibility study for 10 proposed sites.

    Based on this study, detailed engineering designs and tender documents will be prepared for five dams and three artificial reservoirs at priority locations to be approved by the ministry.

    The projects are aimed at enhancing groundwater recharge, improving water balance and securing sustainable resources to support future agricultural expansion and investment in the area.

    The work also includes the design of flood protection dams upstream of the Al-Rawḍah Special Economic Zone to reduce flash flood risks and safeguard planned developments.

    In addition, the consultant will study drainage channels from the recharge and flood protection dams to the beneficiary areas. The total channel length is estimated at about 50 kilometres, the authority said.

    Tender documents will be available to purchase until 27 October. A tender fee of RO300 and a bond equivalent to 1% of the quoted value are required.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14842491/main.jpg
    Mark Dowdall
  • Eni restarts oil and gas exploration in Libya

    10 October 2025

    Register for MEED’s 14-day trial access 

    The Italian oil and gas company Eni has restarted oil and gas exploration activities in Libya after a five-year hiatus.

    Eni’s North African unit has resumed work on exploratory well C1‑16/4, located off Libya’s northwest coast, according to the National Oil Corporation (NOC).

    In March 2020, Ensco’s 4005 rig began drilling the C1‑16/4 well and reached a depth of 1,012 feet before operations were halted due to the Covid‑19 pandemic.

    Ensco’s rig has now been replaced with Saipem’s Scarabeo-9, a sixth-generation semi-submersible drilling rig of Frigstad D90 design.

    The Scarabeo‑9 is re‑entering the well to complete drilling operations, aiming to reach a planned final depth of 10,520 feet, the NOC said.

    The exploratory well C1-16/4 is situated in Contract Area D, previously known as MN 41.

    It lies at a water depth of about 743 metres, approximately 95 kilometres from the Libyan coast and around 15km from the Bahr Es Salam gas field.

    Eni’s return to upstream exploration comes in the wake of US-based ExxonMobil signing an agreement to return to the North African country.

    On 4 August, Exxon signed a memorandum of understanding (MoU) with the NOC in London.

    Under the terms of the non-binding MoU, ExxonMobil agreed to conduct a detailed technical study of four offshore blocks located near Libya’s northwest coast and the Sirte Basin.

    Libya is trying to increase its national production capacity to 2 million b/d from the current level of around 1.3 million b/d.

    READ THE OCTOBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Private sector takes on expanded role; Riyadh shifts towards strategic expenditure; MEED’s 2025 power developer ranking

    Distributed to senior decision-makers in the region and around the world, the October 2025 edition of MEED Business Review includes:

    > AGENDA 1: A new dawn for PPPs
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14841969/main4339.jpg
    Wil Crisp