Renewables supply chain takes shape
24 October 2023
Commentary
Jennifer Aguinaldo
Energy & technology editor
It is an open secret that the financial close and construction of most independent power producer projects in the Middle East and North Africa region – and elsewhere – were significantly delayed between 2020 and 2022 due to the Covid-19 pandemic and the Russia-Ukraine war.
The China-centric nature of the supply chain, particularly for renewable energy components, triggered increases in solar panel and wind turbine component costs and engineering, procurement and construction expenses. The Russia-Ukraine war and the widespread economic uncertainty it caused subsequently triggered inflation.
Utility clients also paused some projects to allow time to assess the impact of the Covid-19 pandemic on their future and long-term demand.
Related read: Region turns into battery storage hotspot
Recent developments in the UAE and Saudi Arabia demonstrate their desire to minimise project delivery disruptions should similar events take place in the future, while also supporting their industrialisation strategies.
China's Trina Solar, Abu Dhabi Ports and Jiangsu Provincial Overseas Cooperation & Investment (Jocic) recently signed an agreement for Trina Solar to set up a solar production and supply chain hub in the UAE.
The plan entails setting up a production base for up to 50,000 tonnes of high-purity silicon, 30,000MW of silicon wafers and 5,000MW of battery modules across the solar industry chain. These are understood to be annual capacities for the plants.
In Saudi Arabia, the local Vision Industries and China's TCL Central New Energy Technology Company recently signed a joint development agreement for Saudi Arabia's first solar photovoltaic (PV) crystalline chip factory.
The project's first phase will have a design capacity equivalent to 20,000MW of solar PV production a year and will require an investment of more than $1bn.
Another Saudi-Chinese joint venture plans to build a wind turbine manufacturing facility at Oxagon in Saudi Arabia's Neom gigaproject development. The planned facility will have the capacity to manufacture wind turbines that can produce an equivalent of 3GW of electricity.
Vision Industries and China's Envision are investing in the wind turbine manufacturing plant project, which aims to cater to the growing demand for wind turbines in the broader Middle East and Africa region in light of widespread decarbonisation initiatives.
The first wind turbines are expected to roll out of production by the first quarter of 2025. MEED reported that it will require an investment of approximately $1.5bn.
The more than $120bn-worth of solar and wind power farms planned across the region – exclusive of the small and medium-sized commercial and industrial projects as well as those catering to the planned off-grid green hydrogen plants – can underwrite these investments, assuming all projects go ahead at some point in the future.
In June this year, the UAE tapped Belgium’s John Cockerill Hydrogen and the local firm Strata for the project to establish the country’s first electrolyser production plant.
With over $180bn-worth of integrated green hydrogen projects in the planning and design stages, primarily in Egypt, Oman, Saudi Arabia, Morocco and the UAE, locating an electrolyser plant in the region is imperative, given the need to scale up global production.
There have also been developments on the lithium and battery storage solutions front.
Australia-headquartered battery company EV Metals Group is developing an integrated battery chemicals complex on a 127-hectare plot in Yanbu Industrial City in Saudi Arabia, which is expected to house a lithium chemicals plant with scope to include a nickel chemicals plant and a cathode active materials plant. The estimated cost for phase one of the lithium chemicals plant is $1.3bn.
Another Chinese company, China’s Guangzhou Tinci Materials Technology, plans to build a lithium-ion battery materials plant in Morocco. The planned facility will produce the materials locally, which it will then export to Europe. Morocco’s ample phosphorite ore resources underpin Tinci’s plans.
Saudi Arabian Mining Company (Maaden) has also signed an agreement with US-based Ivanhoe Electric to undertake exploration of the Arabian Shield zone in Saudi Arabia for high-demand minerals. The Arabian Shield region – approximately the size of Switzerland – is understood to be rich in reserves of critical minerals such as copper, nickel, gold, silver and possibly lithium.
While these investments are a drop in the bucket compared to the national oil companies' multibillion-dollar investments to increase oil and gas production, they still represent a major change in strategy to support decarbonisation.
Such investments in clean energy will only grow in the future if the countries in the region wish to maintain their status as global energy hubs.
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Saudi Arabia’s housing boom risks leaving citizens behind
23 October 2025
Saudi Arabia is in the middle of one of the biggest housing drives in its history. Across Riyadh, Jeddah and the Eastern Province, entire neighbourhoods are taking shape, funded by government initiatives and ambitious developers.The ambition is clear: raise living standards, push homeownership towards Vision 2030’s 70% target, and showcase modern Saudi life.
But here is the uncomfortable reality: homes are being built, yet many Saudis cannot afford them.
No one doubts the appetite for housing. Saudi families have always valued owning a home, and with such a young population, the demand is only growing. But affordability is slipping away.
According to Knight Frank, the number of families planning to buy fell sharply, from 40% in 2023 to 29% in 2024. Prices keep climbing: in Riyadh alone, apartment values rose almost 11% last year, while villas increased even more. Salaries, however, have hardly moved. The result is a widening gap between what people want and what they can realistically buy.
Wrong market
Much of today’s housing pipeline is designed for the top end. Villas and apartments that are priced at SR2-SR4m ($533,333-$1.07m) are now common, while surveys show that two-thirds of Saudi households can only afford about SR1.2m or less.
Developers understandably chase higher margins, building bigger homes with luxury finishes. But this leaves out the very group the government most wants to support: young, middle-income families. Land costs make the situation worse. Speculative buying has pushed land far out of reach, and those costs inevitably pass down to buyers.
Imported designs
International developers have entered the market with big ideas and sleek designs. Yet too often, their projects look as though they are meant for global investors or expatriates, not for Saudi households. Tower blocks and gated compounds may look impressive, but they do not always reflect local family life, or income levels.
Then there is infrastructure. Building communities is not just about homes, but also schools, hospitals, roads, utilities and parks. Those upfront costs are huge, and developers usually recoup them through higher sale prices. Once again, it is the local buyer who feels the squeeze.
Financing difficulties
Rising mortgage rates add another hurdle. With the Saudi central bank following US interest rate moves, borrowing has become more expensive. What might have been an affordable monthly payment two years ago is now out of reach for many young families.
Tower blocks and gated compounds may look impressive, but they do not always reflect local family life, or income levels
Saudi Arabia is opening its property market to foreign investors. That brings in capital and supports diversification. But if supply for citizens is not guaranteed first, the risk is clear: locals may be priced out of their own housing market.
The government is aware of these issues. The Ministry of Housing is rolling out schemes, financing tools and regulations. But more is needed. Policies must:
- Match new homes to actual income levels, not just investor targets
- Curb speculation and make land more accessible
- Expand subsidised mortgages for first-time buyers
- Open the market to foreigners gradually, after domestic needs are met.
Inclusivity goal
Housing is one of the most visible promises of Vision 2030. It symbolises progress, modernisation and opportunity. But unless the current course is corrected, many of these new developments could end up as exclusive enclaves rather than inclusive communities.
Saudi Arabia has the money, the demand and the ambition. The challenge now is to connect all three, so that the homes rising across its skylines are not just impressive projects, but real homes that reflect the aspirations of ordinary Saudis.
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Algeria $1.1bn oil contract signing expected by year-end
23 October 2025
The contract for the planned second phase of the Hassi Bir Rekaiz oil field development project in Algeria is expected to be signed before the end of the year, according to industry sources.
The provisional award of the $1.087bn contract to a consortium of Egypt’s Petrojet and Italy’s Arkad was announced earlier this month.
One source said: “The final approvals are expected to be granted over the coming weeks and the contract should be signed either in late November or early December.”
The scope of work includes the construction of a central processing facility with a capacity of 31,500 barrels a day (b/d), along with associated facilities and pipeline networks extending over 217 kilometres.
It also includes the construction of a power distribution station and storage tanks.
In a statement, Petrojet said: “This award represents a significant step forward in strengthening Petrojet’s presence in the Algerian market and reaffirms its position as a leading regional [engineering, procurement and construction] EPC contractor delivering integrated, world-class energy projects.”
Groupement HBR, which operates the Hassi Bir Rekaiz oil and gas concession, tendered the design contract for the second phase of the field development project in August 2023.
HBR started production from phase one of the project in June 2022.
China Petroleum Engineering & Construction Corporation executed EPC work on the first phase of the field development project. The contract was signed in 2020, with a value of $116m.
The production target for phase one was 13,000 b/d of oil.
The project site, in the eastern part of Algeria, contains blocks 443a, 424a, 414ext and 415ext.
PTTEP and its partners found oil and gas in 10 out of 11 exploration wells drilled in the 1,916-square-kilometre area between 2013 and 2016.
Algeria oil and gas sector
Project activity in Algeria’s energy, industrial and manufacturing sectors is steadily building as the country focuses on a vertically integrated strategy that leverages the exploitation of its natural resources.
In July, Sonatrach and Italian energy company Eni signed a production-sharing hydrocarbons contract estimated to be worth $1.35bn.
The contract covers the exploration and exploitation of the Zemoul El-Kebir concession area, located in the Berkine Basin, approximately 300km east of Hassi Messaoud.
The deal with Eni is the latest of several high-profile agreements that Sonatrach has announced with international oil and gas companies.
In June, Algeria awarded five out of the six oil and gas exploration licences it offered during its 2024 bidding round, a move viewed as a success by stakeholders in the country’s energy sector.
The companies that were awarded blocks included France’s TotalEnergies, state-owned QatarEnergy, Eni and PTTEP.
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Riyadh tenders Al-Zulfi passenger railway station
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Saudi Arabia Railways (SAR) has tendered a design-and-build contract for the construction of a passenger railway station in the Zulfi governorate, located 260 kilometres northwest of Riyadh.
The station in Al-Zulfi will serve SAR’s North Railway line.
According to the tender notice published on SAR’s website, the scope includes the construction of the station building, firefighting facilities, track works, signalling and telecommunication systems, utilities, access roads, parking, landscaping and other associated works.
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The passenger section of the North Railway – formerly known as the North-South Railway – extends over 1,250 kilometres.
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Procurement begins for $372m Rixos Alkhobar resort
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Saudi Arabia’s Tourism Development Fund and US-based investment firm FTG International Group have invited companies to prequalify for a contract to develop a mixed-use resort at Half Moon Beach in Alkhobar, in the kingdom’s Eastern Region.
“The prequalification process is ongoing and the project is likely to be tendered in a few weeks,” sources close to the project told MEED.
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The resort will operate under the Rixos brand and be fully managed by French hospitality firm Accor.
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The commercial construction sector is projected to grow by 3.7% in real terms in 2025 and maintain an average annual growth rate of 3.7% from 2026 to 2029. This is supported by Saudi Arabia’s Vision 2030, which aims to attract 150 million tourists annually and add 320,000 hotel rooms by 2030.
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Saudi Arabia plans Mecca transit-oriented development
22 October 2025
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Saudi Railway Company (SAR) has signed an agreement with local investment firm Riyad Capital to establish a real estate fund to develop a mixed-use, transit-oriented project in Mecca.
The project will span more than 90,000 square metres in the Al-Rusifah district, near the Haramain high-speed railway station in Mecca.
The development is estimated to cost more than SR6bn ($1.6bn).
Riyad Capital operates through four business lines: asset and wealth management, brokerage, corporate investment banking and securities services.
In an official statement, the company said its real-estate portfolio spans three continents and is valued at more than $6bn.
UK-based analytics firm GlobalData expects Saudi Arabia's construction industry to grow by 4% in real terms in 2025, supported by investments in the housing, energy and transport infrastructure sectors.
The commercial sector is estimated to grow by 3.7% in real terms in 2025 and to register an average annual growth of 3.7% from 2026 to 2029, supported by the government’s Vision 2030 plan. Under that plan, the government aims to attract 150 million tourists annually and add 320,000 hotel rooms by 2030.
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