meed-logo

line1 line2 line3
SIGN IN / REGISTER

Resurging projects uplift UAE and Saudi economies

29 January 2024

 

The UAE and Saudi Arabia are almost neck-and-neck – with the UAE marginally in the lead – at the top of the MEED Economic Activity Index, which assesses the near-term economic health of regional markets.

In October 2023, both countries were forecast by the Washington-based IMF to grow at a region-beating rate of 4% in real GDP terms in 2024, though without taking into account the deepening of voluntary oil production cuts in November by half a dozen Opec+ countries, among them Saudi Arabia and the UAE.

In the Q4 Opec+ meeting, in addition to the voluntary cuts announced in April 2023 and extended until the end of 2024, Saudi Arabia and the UAE agreed to cut their oil production by a further 1 million barrels a day (b/d) and 163,000 b/d, respectively, until the end of Q1 2024.

The impact of these additional cuts, as well as the trailing of the oil price below the IMF’s forecast of $79.9 a barrel in 2024, remains to be seen, but – other factors notwithstanding – it should be negative.

In spite of this, some think tanks and ratings agencies have given both countries even more bullish real GDP projections since the start of the year. Aljazira Capital has forecast a 4.4% real GDP growth figure for Saudi Arabia in 2024 and ratings agency Moody’s has projected an even higher 4.6% growth rate.

Aljazira Capital stated that weaker oil revenues “would be offset by growth in non-oil revenues” from the private sector amid the implementation of non-oil spending programmes under Saudi Vision 2030.

For the UAE, ratings agency Standard and Poor’s (S&P) meanwhile forecast 5% growth in 2024 – also driven by the non-oil sector, which grew by 6% in 2023, led by hospitality, retail and financial services.

Beyond the headline figures, both countries are keeping their inflation and fiscal balance in check and have relatively contained unemployment levels. However, Saudi Arabia’s figures of 5.6% unemployment and 23.8% youth unemployment both remain well above average for the GCC countries.

Projects boom

Both countries have also seen a surge in projects activity. Together, they were responsible for the bulk of the $253bn in contracts that made 2023 a record year for regional project activity.

In Saudi Arabia, the total awards value for the year was 59% higher, rising to $95bn – double the long-term average value of project awards over the preceding 10 years. New work also outstripped project completions by a ratio of almost four to one, adding $70bn to the net value of projects under execution.

In the UAE, the value of project awards leapt by 175% to hit $81.5bn – a value almost close to double the long-term average. Significant project completions worth more than $48bn nevertheless weighed on the market and reduced the net change in the value of projects under execution to $33bn.

Other markets

The other GCC countries have mixed outlooks, with varying growth forecasts and projects market activity.

Qatar has a modest 2.2% growth projection for 2024 and has maintained recent project awards at a level matching the rate of completion of legacy projects, as well as the long-term award value average.

Kuwait’s economy was given a 2024 growth forecast of 3.6% by the IMF in October, after contracting in 2023, but this does not include the voluntary production cuts announced in November. The country’s projects market meanwhile continues to slip, with its 2023 awards sitting at just 76% of its average.

The revision of Oman’s 2024 growth forecast by the IMF in January provides a glimpse into the impact of the additional voluntary oil production cuts announced in November for Q1, with the country’s real GDP growth projection for the year having been revised down markedly from 2.7% to 1.4%. The country’s projects market is nevertheless largely holding its own, with its 2023 contract awards clocking in at 88% of the long-term average, even as completions slightly exceeded new awards.

Bahrain continues to struggle with a persistent fiscal deficit and deepening debt, and the squeezing of the country’s cash flow is being reflected in its sinking projects market. The $1.2bn in awards in 2023 flagged 32% behind completions and 65% below the market’s long-term average.

Morocco has increasingly emerged as one of the least troubled markets in the wider Middle East and North Africa region, with a solid 3.6% growth projection for its largely non-hydrocarbons economy. Inflation in the country has also been curbed and the $2.4bn in project awards in 2023 exceeded completions by 24%, despite dipping below the long-term average.

Egypt is heading into 2024 facing severe economic headwinds, with high inflation amid falling foreign exchange reserves and the looming prospect of a further currency devaluation, short of an IMF bailout. The country’s mounting fiscal trouble has been reflected by falling projects activity, with the $12.6bn in awards in 2023 being both below the level of completions and 44% below the long-term average.

Tunisia has a forecast of just 1.9% real GDP growth, but an unexpected burst of $1.5bn in project awards in 2023 boosted projects activity – with the value nearly double both completions and average awards.

Algeria, Iraq and Jordan face various headwinds, but chief among their problems is that their middling growth rates are insufficient to accommodate either their rising debt or double-digit unemployment. All three countries also had projects markets that underperformed in 2023, with award values below both the level of completions and long-term averages.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11466710/main1207.gif
John Bambridge

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

Click here to register
Exclusive from Meed
Related Articles
  • Iraq awards Baghdad airport PPP deal

    29 October 2025

    Register for MEED’s 14-day trial access 

    Iraq has awarded a contract to develop Baghdad International airport on a public-private partnership (PPP) basis to a consortium comprising Luxembourg-based Corporacion America Airports (CAAP) and local firm Amwaj International.

    According to local media reports, the estimated $764m contract covers the rehabilitation of airport infrastructure, construction of a new passenger terminal, and operations and maintenance under a 25-year concession.

    In a statement on its website, the Ministry of Transport said the airport’s initial capacity is expected to be around 9 million passengers, gradually increasing to 15 million.

    Iraq’s Ministry of Transport and General Company for Airports & Air Navigation Services received the bids earlier this month, MEED reported.

    The bidding consortium included:

    • Asyad Holding / Top International Engineering Corporation / Lamar Holding / YDA Insaat / Dublin Airport Authority (Saudi Arabia/Saudi Arabia/Saudi Arabia/Turkiye/Ireland) 
    • Corporacion America Airports / Amwaj International (Luxembourg/Iraq)
    • ERG International / Terminal Yapi / ERG Insaat (UK/Turkiye/Turkiye)

    The media report added that the winning consortium offered the government 43.05% of total airport revenues.

    The Asyad-led consortium offered 38.05%.

    The ERG International-led consortium was disqualified from the bidding process.

    The International Finance Corporation (IFC), a member of the World Bank Group, is the project’s lead transaction adviser.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14971278/main.jpg
    Yasir Iqbal
  • Saudi Electricity Company secures $3bn financing deal

    29 October 2025

    Saudi Electricity Company (SEC) has signed a $3bn financing agreement with a consortium of international banks at the Future Investment Initiative Forum (FII9) in Riyadh.

    The financing comes as SEC continues to expand its project portfolio to meet rising electricity demand. In September, SEC outlined plans to invest SR220bn ($58.7bn) in power projects between 2025 and 2030.

    This includes SR135bn ($36bn) and SR85bn ($22.7bn) for transmission and distribution, respectively, and is part of long-term plans to meet growing electricity demand while improving grid efficiency and reliability.

    The financing partners include the UAE's Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank and Emirates NBD.

    Also included are Bank of East Asia (Hong Kong), Bank of China, Barclays (UK), China Construction Bank, HSBC (UK), Industrial and Commercial Bank of China (China), ING (Netherlands) and Mega Bank (Taiwan)

    The state-controlled utility, majority-owned by the Public Investment Fund (PIF), has dominated procurement activity in the power sector in 2025, awarding approximately $6bn-worth of contracts.

    This has been led by two standalone projects in Dawadmi and Riyadh, each with a capacity of 500MW/2,000MWh and an estimated value of about $600m.

    The utility continues to advance other major developments including the PP13 and PP14 combined-cycle gas turbine (CCGT) power plants in Riyadh. In October, it signed $3.4bn in offtake deals for the plants, which have a total capacity of 3,356MW.

    It also recently reached financial close for Saudi Arabia’s Qurayyah CCGT independent power project (IPP) expansion.

    SEC will develop, finance, build, own and operate the 3,010MW plant as part of a consortium with Saudi Arabia's Acwa Power and Hajj Abdullah Alireza & Company (Haaco).

    Alongside its financing agreement, SEC launched a new Supply Chain Financing Programme during FII9 in partnership with local fintech Manafa and US-headquartered SAP Taulia, supported by the Saudi Industrial Development Fund.

    The initiative aims to improve liquidity across the energy supply chain and enable suppliers to access fast financing at more competitive rates.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14971266/main.jpg
    Mark Dowdall
  • Design work completed for $1bn Libyan pipeline

    29 October 2025

     

    Front-end engineering and design (feed) work has been completed for the major oil pipeline that will extend from oil fields in the south of Libya to the oil export terminal of Es Sider, according to industry sources.

    Libya’s Waha Oil Company, a subsidiary of state-owned National Oil Corporation (NOC), is developing the pipeline.

    The 700-kilometre pipeline will have a diameter of 32 inches and the capacity to transport 1 million barrels a day (b/d) of oil.

    One source said: “It is crucial that the existing pipeline is replaced. The existing pipeline is suffering frequent leaks and cannot handle higher pressures.

    “In 1960, when the pipeline was installed, the pipe thickness was 36mm, but it is now so worn out that this has been reduced to around 8mm across much of the pipeline. In some spots, it is even less than 8mm.

    “Production cannot be increased at the oil field due to this ageing facility.”

    Waha is preparing to eventually tender an engineering, procurement and construction (EPC) contract for the project, which is estimated to have a value of between $1bn and $1.25bn.

    Although the pipeline’s actual usage is unlikely to exceed 300,000 b/d for some time after its completion, it is being designed to be ready for a significant increase in oil production from Libya’s southern oil fields.

    It is unclear when Waha plans to issue an invitation to bid for the project’s EPC contract.

    In 2012, Waha announced a project to replace key oil pipelines in Libya, but funding issues delayed the timeline and invitations to bid were never issued.

    In January 2024, MEED reported that Waha was considering plans to boost its production by 1 million b/d.

    At the time, the subsidiary was producing about 300,000 b/d.

    Earlier this month, NOC announced that the country’s crude oil production had reached 1,383,430 barrels a day (b/d).

    The company said that natural gas production was 2,519 million cubic feet a day (cf/d), while condensate production was 49,013 b/d.

    NOC said it aimed to further increase production capacity to approximately 1.6 million cf/d by 2026.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14970171/main.jpg
    Wil Crisp
  • Qatari firm tenders Oman gabbro mining works

    29 October 2025

    Register for MEED’s 14-day trial access 

    Qatar Primary Materials Company (QPMC) has issued a tender for additional works at its gabbro mining development in the Khatmat Milaha area of Oman, close to a border crossing with the UAE.

    The broad scope of work involves the remaining works for two gabbro quarries and the construction of an export jetty at Khatmat Milaha, state-owned QPMC, also known as Al-Awalia, said in the tender notice.

    Firms have until 11 November to submit bids for the tender, QPMC said.

    QPMC owns a 3 million tonne‑a‑year (t/y) gabbro quarry at Khatmat Milaha in Oman, which is understood to have been commissioned in 2020. The quarry has an expandable capacity of 7 million t/y.

    The Omani quarry project had been planned for a number of years. In 2015, QPMC signed an agreement with Belgian firm Rent-A-Port to start work on the Khatmat Milaha quarry project.

    Rent-A-Port was the consultant for QPMC’s gabbro port in Qatar. A joint venture of Denmark’s FLSmidth and Sixco completed the estimated QR1.6bn ($430m) contract to build the aggregate berths in 2017. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14968152/main2817.jpg
    Indrajit Sen
  • Kuwait forms project company for Al-Zour North expansion

    29 October 2025

    Register for MEED’s 14-day trial access 

    Kuwait has formally established a new public shareholding company to manage the next stages of the Al-Zour North independent water and power plant (IWPP).

    The Gulf Alliance for Power & Water Company will be responsible for the construction, implementation, management, operation and maintenance of Al-Zour North IWPP phases two and three.

    The Al-Zour North phases two and three IWPP involves constructing a 2,700MW power plant and a 120-million-imperial-gallon-a-day desalination facility. The project’s total estimated value is approximately $4bn.

    In August, Saudi Arabia’s Acwa Power and Kuwait-based financial institution Gulf Investment Corporation (GIC) signed a contract to develop the project, which will be the country’s largest IWPP.

    The consortium of Acwa Power and GIC will hold 40% of the project company through Al-Zour Kuwaiti Second & Third Holding Company.

    The Public-Private Partnership Authority will hold 10% on behalf of government entities, while 50% will be offered to Kuwaiti citizens through a public subscription process.

    Al-Zour North IWPP phases two and three is owned by the Kuwait Authority for Partnership Projects (Kapp) and the Ministry of Electricity, Water & Renewable Energy.

    It will be developed under a build-operate-transfer model with a 25-year offtake agreement.

    Sepco3 is the EPC contractor for the project.

    The project company has been set up with an authorised and issued capital of KD197.032m ($639m).

    This capital is divided into 1.97 billion shares, each with a nominal value of 100 fils. The paid-up capital at the time of establishment is KD49.2m.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14963914/main.jpg
    Mark Dowdall