meed-logo

line1 line2 line3
SIGN IN / REGISTER

Rise in PPPs reflects Saudi budgetary pragmatism

7 March 2025

 

Register for MEED’s 14-day trial access 

The value of public-private partnership (PPP) contracts in Saudi Arabia has risen sharply over the past two years as the government seeks to develop projects through the private sector and diversify funding sources.

According to MEED Projects data, in 2023, the value of PPP concession contracts hit an all-time high of $28.2bn, equivalent to more than 23% of the total value of all project contracts awarded that year. Although that figure fell to 18.3% last year, it was still far higher than the historical average in the kingdom.


Source: MEED Projects

The figures are even starker when taking only government spending into account. In 2023, the value of signed PPP contracts totalled more than a third of the value of government or government-related projects awarded in 2023 and more than a quarter last year. This is compared to the average of 15.6% between 2019 and 2022, and just 3.5% recorded in 2018. 

Government contracts include awards made by ministries, municipalities and royal commissions, in addition to state-funded key project clients such as Saudi Water Authority, the National Housing Company and Jeddah Airports Company. Public Investment Fund (PIF) subsidiaries such as Neom, the National Water Company and Rua Al-Madinah are also included.

Reducing spending

The government increasingly views the development of projects through the PPP framework as a means of delivering strategic schemes like power and desalination plants off-balance sheet using private sector funding, thereby reducing its capital expenditure requirements. 

This has been particularly important as Riyadh’s financing commitments for its gigaprojects and infrastructure programmes have soared in line with its Saudi 2030 Vision. New contract awards overall in the kingdom reached $149bn, the highest ever recorded by a single country in the region and one of the largest globally.


*Government contracts include awards made by ministries, municipalities and royal commissions, in addition to state-managed key project clients such as Saudi Electricity Company, the National Housing Company and Jeddah Airports Company. Public Investment Fund (PIF) subsidiaries like Neom and Rua Al-Madinah are also included. Capital expenditure by Saudi Aramco is excluded from the analysis | Source: MEED Projects

Beyond utilities

PPPs have been used in Saudi Arabia and the wider GCC region for over two decades, but have been mainly limited to power generation and water desalination plants, where the developer benefits from guaranteed take-or-pay power-purchase agreements that eliminate demand risk.

However, over the past three years, the government has successfully implemented PPPs in a number of new sectors, including education and healthcare, to finance, build and operate schools and hospitals. Forthcoming PPP projects include the estimated $2.5bn Asir-Jizan highway, which would be the first road concession in the GCC, and the multibillion-dollar contract to develop the expansion of Abha International airport.

The NCP is expected to add dozens more PPPs to its future pipeline to relieve the state’s financial burden and to stimulate the private sector’s involvement in the local projects market 

Outside the utilities sector, the body responsible for pushing the PPP agenda is the National Centre for Privatisation (NCP). It has more than 170 PPPs in the pipeline, covering long-term concession agreements in projects as diverse as municipal laboratories, television and radio tower infrastructure, court complexes and logistics zones.

As capital expenditure continues to increase, the NCP is expected to add dozens more PPPs to its future pipeline to relieve the state’s financial burden and to stimulate the private sector’s involvement in the local projects market.

Gigaproject delivery

The gigaproject development companies will likely follow a similar path. Off-grid developers Neom and Red Sea Global have both signed utilities concessions with the private sector for their power, desalination, water treatment and district cooling requirements, with the former also contracting companies to build and operate labour accommodation.

Going forward, other PIF developer subsidiaries like New Murabba Development Company (NMDC), Diriyah Company, Roshn Group and King Salman International Airport Development Company are attempting to harness the private sector for a number of their project components. 

NMDC, for example, will seek companies over the next five years to finance and operate its water treatment, power, district cooling, waste collection, telecommunication, secondary roads, street lighting, social infrastructure and EV charging infrastructure requirements under its partnership strategy. 

The use of PPP contractual frameworks will be critical to ensure delivery of the gigaprojects as soaring construction costs have resulted in delays to the programme and put a strain on the PIF and government’s finances. 

Growing appetite

Power and water production schemes aside, it remains to be seen whether the private sector and banks will have the appetite to take on the investment risk these projects will entail, especially if they do not come with government guarantees, explicit or otherwise.

However, the experience to date suggests that there is a big appetite in the private sector – at least locally – to take on an expanded role in absorbing some of the state’s financing burden. Whether this will remain the case as the PPP pipeline continues to grow will be key to Saudi Arabia’s project and 2030 Vision ambitions.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13466076/main.gif
Edward James

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

Click here to register
Exclusive from Meed
Related Articles
  • Riyadh shifts bid deadline for King Salman Stadium works

    11 November 2026

     

    Saudi Arabia’s Sports Ministry has set a deadline of 1 December for a contract covering early works at the King Salman International Stadium in Riyadh.

    The tender scope encompasses enabling works, site preparation and initial construction activities. The tender was issued on 11 October, carrying an initial submission deadline of 19 November. Contractors previously submitted prequalification statements for the main design-and-build contract in February.

    Designed by US-based architectural firm Populous, the stadium will cover approximately 660,000 square metres (sq m), seat 92,000 spectators and stand adjacent to King Abdulaziz Park. Facilities will feature a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

    The broader masterplan encompasses more than 360,000 sq m of ancillary facilities, featuring two training fields, fan zones, a closed sports hall, an Olympic-sized swimming pool, an athletics track, and outdoor courts for volleyball, basketball and padel.

    Scheduled for completion by 2029, the venue will serve as the home base for the Saudi national football team and host the opening match and final of the 2034 Fifa World Cup.

    Saudi stadium plans

    In August 2024, MEED reported that Saudi Arabia plans to build 11 new stadiums and refurbish four existing venues for the 2034 tournament. Eight venues will be located in Riyadh, four in Jeddah, and one each in Al-Khobar, Abha and Neom.

    An additional 10 cities will host team base camps: Al-Baha, Jazan, Taif, Medina, AlUla, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah. Across the kingdom, organisers plan to deploy 134 training sites, comprising 61 existing facilities and 73 new builds.

    Saudi Arabia was officially selected to host the 2034 Fifa World Cup during an online convention of member associations at the Fifa Congress on 11 December 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21325461/main.jpg
    Yasir Iqbal
  • Dubai approves metro extension to Al-Maktoum airport

    10 November 2026

    Dubai’s Executive Council has approved a project to extend the Dubai Metro’s Route 2020 to Al-Maktoum International Airport City, with passenger services scheduled to begin operations in 2031.

    Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum, Crown Prince of Dubai, announced the decision following a council meeting held during the UAE Government Annual Meetings 2026.

    The rail project forms part of a package of strategic schemes worth over AED11bn ($3bn) approved by the council.

    The wider approvals include a comprehensive framework to upgrade community facilities and public services by 2040, with priority given to residential communities for UAE citizens.

    The project approval follows the procurement of detailed design work for the rail link. MEED exclusively reported in September that Dubai’s Roads & Transport Authority (RTA) had awarded US-based engineering consultancy Aecom the design contract for the Route 2020 extension.

    The planned extension will run for about 3 kilometres from the existing Expo 2020 terminus station to connect directly with the West Terminal of Al-Maktoum International airport. The scheme will add two new stations to the network.

    The existing Route 2020 corridor is a 15km spur that branches off the Dubai Metro Red Line at Jebel Ali station. It comprises 11.8km of elevated viaduct and 3.2km of underground track, serving five elevated and two underground stations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21301168/main.png
    Yasir Iqbal
  • Egypt seeks to accelerate gas pipeline project with Libya

    10 November 2026

    Egypt aims to accelerate a range of energy projects with Libya, including gas pipeline links, according to a statement from the Egyptian Foreign Minister Badr Abdelatty.

    Other projects include a scheme to refine Libyan crude in Egypt and an electricity interconnection.

    Abdelatty’s comments came in a ministry statement after a meeting with Libya’s acting oil and gas minister, Khalifa Abdulsadek, in the Libyan capital of Tripoli.

    Egypt is currently trying to address an energy squeeze that has escalated ​due to elevated global liquefied natural gas (LNG) prices since the ​start of the US-Israeli war on Iran in February of this year.

    In his statement, Abdelatty called ‌for ⁠cooperation on petroleum products and the completion of projects to refine Libyan oil in Egypt and re-export ​it.

    He also said that Abdulsadek would ​visit ⁠Cairo soon to continue technical talks with Egypt’s petroleum and electricity ministers.

    The ⁠statement ​did not provide ​details on costs or the status of the projects.

    Plans for new gas pipeline links with Libya are just one of several ambitious gas pipeline plans Egypt is pursuing.

    In October, the Italian oil and gas company Eni signed the main engineering, procurement, construction and drilling contracts for a project to export gas from reserves in Cyprus using a major pipeline to Egypt.

    The project includes contracts with several companies that will develop infrastructure in both Egypt and Cyprus.

    The awards included a $170m contract won by Egypt’s Petrojet for a new onshore gas pipeline in Egypt that will help transport gas to Egypt’s Damietta LNG facility.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21273777/main.jpg
    Wil Crisp
  • Omani company signs Kuwait drilling contract

    10 November 2026

    Oman’s MBPS has signed a drilling rig contract worth $127.3m with state-owned upstream operator Kuwait Oil Company (KOC).

    Under the terms of the deal, MBPS will supply and operate three newly built 1,000-horsepower land rigs for drilling and workover operations, according to a company statement.

    The UAE-based oil field services company Adnoc Drilling is a majority shareholder in MBPS.

    The chief executive of MBPS, Salim Al-Harthy, said: “This is another important milestone for MBPS and a strong reflection of KOC’s confidence in our capabilities.

    “It further strengthens our presence in Kuwait and our commitment to delivering safe, reliable and efficient drilling and workover services across the region.”

    He : “My sincere appreciation to KOC for their continued trust, and to our MBPS team for their hard work and dedication in making this possible.”

    In October last year, KOC said it planned to spend KD1.2bn ($3.92bn) on its exploration drilling programme through 2030.

    The spending was part of a KD9.8bn budget, the company’s biggest ever, allocated for drilling and maintenance of up to 6,193 wells by the end of this decade.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21273731/main.png
    Wil Crisp
  • Adnoc Drilling wins $315m Kuwait offshore rig deals

    10 November 2026

    Register for MEED’s 14-day trial access 

    Abu Dhabi National Oil Company (Adnoc Group) subsidiary, Adnoc Drilling, has been selected for two offshore drilling rig contracts in Kuwait with a combined maximum value of KD96.55m ($315m), according to documents published by Kuwait’s Official Gazette.

    The Higher Purchasing Committee of state-owned Kuwait Petroleum Corporation (KPC) has given approval for its subsidiary Kuwait Oil Company (KOC) to award the contracts to the Abu Dhabi-listed drilling contractor after Adnoc Drilling submitted the lowest compliant bids.

    While the maximum combined contract value has been confirmed as KD96.55m ($315m), the individual contract values, rig identities, durations and expected commencement dates have not been disclosed.

    The approval comes as Kuwait moves to expand offshore exploration and development following a series of discoveries in its territorial waters.

    It is currently unclear how Kuwait will provide security for its planned offshore oil and gas projects in the Gulf, adding uncertainty to the outlook for these plans.

    On 5 October, KPC chief executive Shaikh Nawaf Al-Sabah reiterated the company’s commitment to developing three major offshore oil discoveries in the region.

    KPC initially launched the Al-Seef project to develop the three fields in February, just weeks before the US and Israel attacked Iran, triggering a regional war that has sparked a crisis in Kuwait’s oil and gas sector.

    The regional conflict has seriously disrupted shipping through the Strait of Hormuz, a key export route for Kuwaiti oil.

    The war has also led to dozens of attacks on Kuwaiti oil and gas infrastructure, with at least one causing damage to a Kuwaiti offshore platform.

    This attack took place on 12 July, when a drone struck a KOC offshore drilling platform in Kuwaiti territorial waters, causing damage to the platform and injuring one worker.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21273678/main2430.jpg
    Wil Crisp