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
  • Dubai plans EPC tender for Warsan sewage treatment plant

    25 February 2026

     

    Register for MEED’s 14-day trial access 

    Dubai Municipality is preparing to tender the main construction package for the Warsan sewage treatment plant (STP) by the end of the year, according to sources close to the project.

    The scheme is linked to the deep sewerage tunnels infrastructure programme being implemented by the municipality’s sewerage and recycled water projects department.

    As MEED understands, the Warsan STP had previously been expected to be procured as a public-private partnership (PPP) scheme.

    However, sources confirmed that the main construction package will now be procured as an engineering, procurement and construction (EPC) contract.

    The project involves the construction of a sewage treatment plant with a capacity of about 175,000 cubic metres a day (cm/d), including treatment units, sludge handling systems and associated infrastructure.

    The plant, estimated to cost about $326m, will be developed at the existing Warsan complex, where the municipality is also progressing separate expansion and rehabilitation packages.

    These include Warsan STP Phase 1 (DS-355/1), which involves sewerage and stormwater network upgrades, and Stage 2 of the Al-Warsan sewage treatment plant (DS-203/2), comprising new treatment units

    Kuwait-headquartered Mohammed Abdulmohsin Al-Kharafi & Sons is the main EPC contractor for both projects.

    Separately, the municipality is also progressing the expansion and upgrade of the first and second phases of the Jebel Ali STP.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cm/d.

    Earlier this month, contractors were invited to prequalify for the contract.

    The bid submission deadline is 2 April.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15765751/main.jpg
    Mark Dowdall
  • Aramco firm and Arcapita sign logistics facility deal

    25 February 2026

    Asmo, the logistics joint venture of Saudi Aramco and DHL Supply Chain, has signed an agreement with Bahrain‑headquartered Arcapita Group Holdings to deliver a 1.4-million-square-metre (sq m) built-to-suit logistics complex at King Salman Energy Park (Spark).

    The project will feature a 43,000 sq m temperature-controlled, Grade A warehouse, more than 3,000 sq m of office and staff amenities, 5,300 sq m dedicated to chemical storage, and an open yard spanning about 1.2 million sq m.

    Planned for large-scale industrial use, the site is expected to incorporate advanced warehouse and building management systems, end-to-end digital connectivity, automation and robotics.

    It will also be developed in line with internationally recognised sustainability standards, featuring solar (photovoltaic) readiness, EV charging infrastructure and a target of LEED Gold certification.

    The development is aimed at supporting the next stage of Saudi Arabia’s logistics and supply chain expansion.

    Under the deal structure, Arcapita will provide funding and retain ownership of the asset, while Asmo will develop the facility and then lease and operate it under a 22-year occupational lease.

    According to a statement, “the scheme will be executed via a forward-funding model, underscoring a long-term commitment to national infrastructure”.

    Asmo added that this will be its first purpose-built logistics centre and one of four strategic locations planned to anchor its nationwide logistics network, aligned with the National Transport and Logistics Strategy (NTLS) under Saudi Vision 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15765085/main.gif
    Yasir Iqbal
  • Algeria gives bidders more time for 1.2GW plant

    25 February 2026

    Algeria’s state-owned electricity and gas utility Sonelgaz has extended the bid submission deadline for a contract to build a 1,200MW combined-cycle gas-fired power plant in Adrar.

    The project is being procured through Sonelgaz’s power generation subsidiary, Societe Algerienne de l’Electricite et du Gaz – Production de l’Electricite (SPE).

    The new bid submission deadline is 29 April. The main contract was first tendered in April last year, and the deadline has been extended several times since.

    The latest deadline was 26 February.

    The tender is open to local and international companies with experience in delivering large-scale power generation projects and with sufficient technical and financial capacity.

    Algeria’s wider power sector has experienced periods of limited contract activity in recent years. Between 2018 and 2022, virtually no new solar or wind farm contracts were awarded, according to available data from the regional projects tracker MEED Projects.

    In 2023, Sonelgaz Energie Renouvelables, a subsidiary of Algeria’s state-owned utility, awarded 14 of the 15 solar photovoltaic (PV) packages it tendered that year.

    At the time, MEED reported that the 15 packages had a total combined capacity of 2,000MW, requiring at least AD172bn ($1.2bn) of investment.

    However, publicly available data suggests that progress has been slow with several schemes yet to reach full construction or commercial stages.

    Gas-fired combined-cycle plants continue to account for the majority of Algeria’s electricity generation capacity. Data from MEED Projects indicates that more than 5,000MW of oil- and gas-fired power capacity is currently under construction.

    Despite this, new contract awards in 2025 came from three solar schemes.

    This included the construction of a 154MW solar PV plant in Bechar, for which China Power was appointed main contractor in August.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15765079/main.jpg
    Mark Dowdall
  • Riyadh tenders Line 7 metro project management deal

    25 February 2026

     

    Register for MEED’s 14-day trial access 

    The Royal Commission for Riyadh City (RCRC) has issued a tender inviting firms to bid for a contract for project management consultancy services for the construction of Riyadh Metro Line 7.

    MEED understands that RCRC has allowed firms until March to submit their proposals.

    The latest development follows contractors submitting bids on 31 January for a contract to design and build the project.

    The project involves constructing a metro line linking the Qiddiya entertainment city development, King Abdullah International Gardens, King Salman Park, Misk City and Diriyah Gate. The total length of the line will be about 65 kilometres (km), of which 47km will be underground and 19km will be elevated.

    The line will have 19 stations, 14 of which will be built underground and five above ground.

    Riyadh Metro’s first phase features six lines with 84 stations. The RCRC completed the phased roll-out of the Riyadh Metro network when it started operating the Orange Line in January this year.

    Construction has also begun on the next phase of Riyadh Metro, the extension of Line 2.

    In July last year, MEED exclusively reported that RCRC had awarded an estimated $800m-$900m contract for the project.

    The contract was awarded to the Arriyadh New Mobility Consortium, led by Italy’s Webuild. 

    The group also includes India’s Larsen & Toubro, Saudi Arabia’s Nesma & Partners and France’s Alstom.

    Line 3, also known as the Orange Line, stretches from east to west, from Jeddah Road to the Second Eastern Ring Road, covering a total distance of 41km. 

    The line spans 8.4km, of which 1.3km is elevated and 7.1km is underground. It includes five stations – two elevated and three underground.

    It will run from the current terminus of Line 2 at King Saud University (KSU) and continue to new stations at KSU Medical City, KSU West, Diriyah East and Diriyah Central – where it will interchange with the planned Line 7 – before terminating at Diriyah South.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15764750/main.png
    Yasir Iqbal
  • Six companies prequalify for Algeria gas contract

    25 February 2026

    Register for MEED’s 14-day trial access 

    Six companies have prequalified for a contract that is part of a project to connect the liquefied natural gas (LNG) storage and loading lines of the gas complexes known as GL1Z and GL2Z, according to a statement issued by Algeria’s state-owned oil and gas company Sonatrach.

    The two complexes are part of Sonatrach’s Arzew LNG hub.

    The scope of work for the contract is focused on the execution of the basic engineering study for the project.

    The six companies that have prequalified for the project are:

    • JGC (Japan)
    • McDermott (US)
    • Synergy Engineering (Indonesia)
    • ExidaSP (UAE)
    • EPPM (Tunisia)
    • Enreco (Italy)

    In its statement, Sonatrach said: “Following the review of applications, the companies … have been prequalified and will be invited to participate and submit bids in the selective consultation.”

    The Arzew LNG hub is Algeria’s main LNG export centre, located near the port town of Arzew, about 40 kilometres east of Oran on the Mediterranean coast.

    Sonatrach is currently implementing several projects to upgrade facilities within the hub.

    In October last year, MEED revealed that the gas train known as T-300 had been brought back online at the site.

    The train was brought back online after a new main cryogenic heat exchanger (MCHE) was commissioned.

    The upgrade was part of a broader contract with US-based Honeywell to replace four MCHEs at GL1Z.

    The contract was originally signed with Air Products, and Honeywell acquired the contract when it bought Air Products’ LNG process technology and equipment business in September 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15762638/main.png
    Wil Crisp