Riyadh prioritises stability over headline growth
28 September 2023
MEED's October 2023 special report on Saudi Arabia also includes:
> POLITICS: Saudi Arabia looks both east and west
> GIGAPROJECTS: Gigaproject activity enters full swing
> TRANSPORT: Infrastructure projects support Riyadh’s logistics ambitions
> UPSTREAM: Aramco focuses on upstream capacity building
> DOWNSTREAM: Saudi chemical and downstream projects in motion
> POWER: Riyadh rides power projects surge
> WATER: Saudi water projects momentum holds steady
> BANKS: Saudi banks track more modest growth path
> SPORT: Saudi Arabia’s football vision goes global
> JEDDAH TOWER: Jeddah developer restarts world’s tallest tower

As 2023 heads towards its final quarter, Saudi Arabia has elected to continue to pursue further voluntary Opec+ oil production cuts, supporting oil prices at the expense of its own immediate GDP growth.
On 5 September, Riyadh confirmed its intention to roll over its additional 1 million barrels a day (b/d) of production cuts until the end of the fourth quarter. Analysts had largely expected Saudi Arabia to extend the cuts with a view to further tightening oil markets, and the price of Brent crude broke the $90-a-barrel mark and reached its highest point in 10 months shortly after the cut extension was announced.
Despite the rise in prices, Saudi Arabia’s ongoing oil production restraint will ensure no improvement is likely to be made on its modest mid-year real GDP growth forecasts.
In July, the Washington-based IMF lowered its projection for Saudi Arabia’s economic growth to 1.9 per cent, down from an earlier forecast of 3.1 per cent in April – and compared to an 8.7 per cent growth figure for 2022, which saw oil reach highs of up to $124 a barrel and the kingdom’s first fiscal surplus in nearly a decade.
The country also entered a technical recession in the second quarter after its economy contracted for its second successive quarter in a row – shrinking by 0.1 per cent after a contraction of 1.4 per cent in the first quarter, according to estimates from the General Authority for Statistics (Gastat). This resulted in a slowing of year-on-year growth to 3.8 per cent in the first quarter and 1.1 per cent in the second.
There is now a risk that the Saudi economy could see an overall contraction for 2023. The further three months of production cuts will translate into a 9 per cent overall fall in production in 2023, the largest drop in 15 years, according to Khalij Economics.
Non-oil growth
Despite the disappointing headline GDP growth figures and projections, however, Saudi Arabia is maintaining a robust non-oil growth rate.
The non-oil economy is estimated to have grown 5.5 per cent year-on-year in the second quarter of 2023, according to Gastat, while oil sector growth declined by 4.2 per cent. Private sector growth for the quarter has been estimated to be even higher, at about 6.1 per cent.
At the same time, the Riyad Bank Saudi Arabia purchasing managers’ index (PMI) settled to an 11-month low of 56.6 in August 2023, down from 57.7 in July, reflecting a moderation of non-oil activity. It was the second stepdown in two months for the index from a multi-year high for new business in June.
The headline PMI figures remain deeply positive, however, with the index well above the 50 mark that delineates growth from contraction.
The index also saw the rate of job creation pick up further in August amid sustained new business growth. This reflects a continuation of a job creation trend in the country that has seen unemployment fall from 9 per cent during the Covid-19 pandemic to 4.8 per cent at the end of 2022. Meanwhile, youth unemployment has been halved over the past two years to 16.8 per cent in 2022.
On the flipside, input cost inflation accelerated to its fastest rate in over a year due to a sharper uptick in purchase prices, though selling prices partially compensated for this by also rising. Business confidence nevertheless slid to the lowest level since June 2020 over concerns of rising market competition.
Project performance
The kingdom’s non-oil sector should continue to be well supported by Saudi Arabia’s infrastructure and project spending plans. These schemes remain affordable thanks to the kingdom’s broad financial reserves and buffers.
As of mid-September, Saudi Arabia’s project spending for 2023 had already all but matched that of 2022, with contract awards in the kingdom approaching the $57bn mark – last year’s figure – but with three and a half months still left to run.
This is the third straight year with project awards of around $55bn or more. This is a 75 per cent increase in spending compared to the period from 2016 to 2020, which witnessed an average of only slightly more than $30bn in awards each year.
There is a further $50bn-worth of project work in bid evaluation and expected to be awarded this year. Even accommodating the possibility of delays for much of this work, the award of even a modest portion of this would make 2023 by far the strongest year on record for project awards in Saudi Arabia.
This heightened level of projects activity is as much due to above-average spending on oil and gas infrastructure, amid a spree of investment by Saudi Aramco in the optimisation of its core assets, as it is to the kingdom’s gigaproject programme.
Oil and gas project awards alone have exceeded $21bn in 2023 to date and could readily be on track to beat the previous award high of $24.7bn seen in 2019.
It is the construction and transport sector that has the furthest to go to outdo itself in the last quarter of 2023.
Awards in the sector to date have hit $24.6bn, whereas awards in 2022 reached $34.7bn – so there is a $10.1bn gap to bridge to beat last year’s performance. This is not unrealistic given the $14.2bn-worth of projects in the sector under bid evaluation, and especially given the backing of the Public Investment Fund for the kingdom’s gigaprojects and other Vision 2030 schemes.
Overall, the ongoing upsurge in projects activity should continue to prove supportive of the non-oil economy, regardless of either the vicissitudes of the oil price or Saudi Arabia’s moderation of its own oil production.
Exclusive from Meed
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Kuwait utilities investment shifts towards water11 August 2026

China State Construction Engineering Corporation recently signed a contract for Kuwait’s North Kabd wastewater treatment plant, the country’s largest wastewater infrastructure project to date.
The award, following more than a decade of planning, propelled Kuwait’s water sector contract awards to more than $4bn as of early August, according to regional project tracker MEED Projects.
The facility will have a treatment capacity of up to 1 million cubic metres a day (cm/d), with the $3.3bn contract covering the design, construction, operation and maintenance of the plant over a 10-year period.
It marks a significant recovery for the sector after several years of subdued activity and the first time since 2020 that annual water awards have exceeded $1bn.
North Kabd is the largest of several major water projects awarded this year, alongside contracts covering desalination and the expansion and rehabilitation of water distribution infrastructure.
Desalination and distribution
These include a $316m contract awarded to local firm United Gulf Construction (UGC) by the Ministry of Electricity, Water & Renewable Energy (MEWRE) for the rehabilitation and expansion of the Doha water distribution complex.
The five-year project includes a new pump station and will add about 130 million imperial gallons of storage capacity, while increasing pumping capacity to 220 million imperial gallons a day (MIGD).
UGC was also selected in February to upgrade the Hawally water distribution complex in Kuwait’s Hawalli Governorate. The facility serves one of Kuwait’s most densely populated governorates, with the project intended to address chronic low water pressure, particularly during peak summer demand, and improve continuity of supply.
The upgrade will increase freshwater storage capacity by 66 million gallons and raise potable-water pumping capacity to 54.5 million gallons a day.
In April, Kuwait’s Central Agency for Public Tenders approved MEWRE’s recommendation to award a $371m contract for phase two of the Doha seawater reverse osmosis (SWRO) desalination plant.
A joint venture of Kuwait-based Heavy Engineering Industries & Shipbuilding Company (Heisco) and India’s VA Tech Wabag will carry out the project, which will have a capacity of about 272,000 cm/d.
Upcoming water awards
Meanwhile, Kuwait’s Ministry of Public Works (MPW) has been progressing several tenders for major water infrastructure projects covering rainwater drainage and treated water systems in the country’s southern and northern regions.
In July, local Combined Group Contracting submitted the lowest bid for a contract to develop a major treated water system in the southern region. The contractor submitted a price of about $515m for the scheme, according to a company disclosure.
For the smaller northern treated water system, Contractor General Trading & Contracting submitted the lowest bid of $169m.
In what is already a standout year for Kuwait’s water sector, further awards could push activity significantly higher. More than $1bn of water projects are currently under bid evaluation, indicating further evidence of a sustained recovery in the months ahead.
Power sector activity
Kuwait’s power sector recorded just $271m of contract awards by early August, according to MEED Projects, putting activity well below recent annual levels.
This compares with a record full-year total of $5.5bn in 2025 and $2.7bn in both 2024 and 2023.
Several large-scale generation projects have been slow to advance, with deadline extensions a notable feature in recent months. The outlook is stronger, however, with these projects now progressing through procurement and significant awards expected in the months ahead.
Kuwait is advancing the 1,800MW Al-Khairan phase one independent water and power project (IWPP), for which two developer consortiums led by Abu Dhabi National Energy Company (Taqa) and Saudi Arabia’s Acwa submitted bids in June.
The project will also include a desalination plant with a capacity of 125 MIGD. A second phase of the Al-Khairan IWPP, estimated at $750m, is understood to include a further 1,800MW of generation capacity through a combined-cycle gas-fired power plant. The project remains in the early development stages, with tendering not expected until at least 2027.
Renewable energy programme
The Kuwait Authority for Partnership Projects (Kapp) is also progressing the Al-Dibdibah power and Al-Shagaya renewable energy programme in partnership with Kuwait’s MEWRE.
The contract to develop the 1,100MW phase three, zone one solar photovoltaic (PV) project is expected to be confirmed soon, with a consortium led by Abu Dhabi Future Energy Company (Masdar) previously reported to be the frontrunner.
A separate 500MW solar PV project is also being procured under phase three, zone two of the same programme, with bids submitted on 26 July. If the contract is awarded by the end of the year, the two Shagaya contracts would add about $2bn to the value of power sector awards.
Another notable development was the 25-year energy conversion and water purchase agreement signed in February for the Al-Zour North IWPP phases two and three. The signing marked a key step towards financial close on the estimated $4bn project. Once completed, the facility will add 2,700MW of power and 120 MIGD of desalinated water to Kuwait’s supply network
The Shagaya, Khairan and Zour North projects form a key part of Kuwait’s generation portfolio. The country is aiming to reach 22,100MW of installed renewable energy capacity by 2030, under a 20-year strategy announced in March 2025 that extends to 2050.
Kuwait is also continuing to invest in existing generation plants. MEWRE is evaluating bids for the $1.7bn upgrade of the Subiya power and water plant, including the conversion of units from open-cycle to combined-cycle operation and the modernisation of existing facilities.
Battery energy storage systems
In the near to medium term, more than $10bn-worth of power projects are under bid evaluation. This includes several battery energy storage system projects with a planned total storage capacity of 1.5GW.
In June, Kuwait approved sites in Al-Mutlaa and Jaber Al-Ahmad cities for the development of the projects. The projects will be implemented in phases, with the first phase providing 500MW of storage capacity. The first facilities are expected to be operational by summer 2027 and will supply stored energy to the electricity grid during periods of peak demand.
Elsewhere, MEWRE continues to evaluate offers from Shanghai Electric Group and local firm Heavy Engineering Industries & Shipbuilding Company (Heisco) for the estimated $400m engineering, procurement and construction contract to rehabilitate and modernise eight boilers at the Subiya power generation and water distillation station. The bid bond validity has been extended to 23 August, indicating that the procurement process remains ongoing.
MEED’s September 2026 report on Kuwait also includes:
> ECONOMY: Kuwait shows tentative signs of economic development
> BANKING: Necessity is the mother of invention for Kuwaiti lenders
> OIL & GAS: Regional war to have lasting impact on Kuwaiti oil sector
> CONSTRUCTION: Kuwait construction holds up despite regional strifehttps://image.digitalinsightresearch.in/uploads/NewsArticle/18333042/main.gif -
Syrian court gives death penalty to Bashar Al-Assad11 August 2026
A Syrian court has sentenced former president Bashar Al-Assad to death after trying him in absentia, convicting him of crimes committed during the country’s nearly 14 years of civil war.
It is the first such ruling under Syria’s transitional authorities, who ousted Al-Assad in December 2024 and vowed justice and accountability for crimes committed under his rule.
Al-Assad fled to Moscow as Islamist-led forces closed in on Damascus after a lightning offensive.
In a Damascus court, Judge Fakhr Al-Din Al-Aryan convicted Al-Assad of crimes including “premeditated murder, the intentional killing of more than one person, the intentional killing of children under 15 years … torture, torture leading to death, and deprivation of liberty on multiple occasions” — acts the court classified as crimes against humanity and war crimes.
“He is therefore sentenced to death,” the judge said in his ruling.
The court also sentenced six former military and security officials to death in absentia, including Al-Assad’s brother Maher, who ran the army’s elite Fourth Division and also fled the country.
Those convicted included former defence minister Fahd Al-Freij and Louay Al-Ali, who headed military intelligence in Daraa province in 2011.
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The officials were convicted of crimes including murder, incitement to murder, torture leading to death and repeated deprivation of liberty, also classified as crimes against humanity and war crimes.
Former security official Atif Najib – the only defendant tried in person – was also sentenced to death for crimes against humanity committed while he headed political security in Daraa province, the cradle of the country’s 2011 uprising.
Najib, a cousin of Al-Assad who was arrested in January last year, was convicted of crimes including murder, the intentional killing of children under 15 and torture leading to death.
The acts attributed to him are “crimes against humanity”, the court said as it handed down “the harshest punishment … which is the death penalty”.
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Syria began proceedings in April against Al-Assad and other officials, accused both in person and in absentia of atrocities during the civil war, which erupted after the former authorities’ brutal repression of pro-democracy protesters.
More than half a million people were killed and millions displaced, while tens of thousands disappeared, many into the country’s brutal prison system.
The uprising began in Daraa in March 2011 after 15 students were arrested for allegedly writing anti-government slogans on the city’s walls.
Residents said the students were tortured, prompting protests demanding their release that ended in bloodshed.
Security forces suppressed demonstrations and fired live ammunition to disperse sit-ins at several locations.
Najib was dismissed after the crackdown as protests spread to other provinces.
Judge Al-Aryan said Najib had denied the charges and shown “no remorse”.
Al-Assad took power in Syria in 2000 in an unopposed election following the death of his father, Hafez Al-Assad, who was president from 1971.
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Oman extends deadline for $150m water transmission project11 August 2026

State-owned Nama Water Services (NWS) has extended the bid submission deadline for a contract to build a $150m water distribution network project in Jalan Bani Bu Ali Wilayat in Oman’s South Sharqiyah Governorate.
The new deadline is 24 August. The original deadline was 17 August.
The engineering, procurement and construction (EPC) contract covers the development of water distribution infrastructure in the JBBA North and JBBA Coastal areas.
The scope includes new water storage reservoirs, elevated tanks, booster pump stations and transmission and distribution pipelines.
The project includes two reservoirs in the JBBA North area with a capacity of 40,000 cubic metres, along with about 58 kilometres of ductile iron distribution pipelines and 343km of high-density polyethylene (HDPE) pipelines.
The JBBA Coastal works include reservoirs at Asilah, Ashkarah, Wadi Sal and Khabbah, as well as elevated tanks and pump stations. The scope also includes about 38.5km of 400mm-diameter ductile iron transmission pipeline.
NWS issued the main contract tender on 4 June. UK-headquartered Mott MacDonald is the main consultant on the project.
The project is one of three water distribution schemes being tendered under a wider $350m masterplan covering Jalan Bani Bu Hassan, Jalan Bani Bu Ali, and Al-Kamil and Al-Wafi wilayats.
The Jalan Bani Bu Hassan scheme includes a new 40,000-cubic-metre ground reservoir at Al-Sayah Al-Sharqi 4, a pump station and associated transmission and distribution pipelines. It will also include a pump station serving the Industrial Area and an inline booster pump station supplying Al-Mintajjah and Sariq Haryah.
The projects covering Jalan Bani Bu Ali and Al-Kamil and Al-Wafi wilayats are estimated to cost £100m each. The bid submission deadline for both projects is 17 August.
READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDFSaudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.
Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:
> WORLD CUP: What the 2026 World Cup means for Saudi Arabia 2034> MARKET FOCUS: Maghreb fortunes diverge> INDUSTRY REPORT: GCC banks prove resilient amid turmoil> LEADERSHIP: Private capital and the GCC infrastructure inflection> INTERVIEW: Developers look beyond standalone solarTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/18326851/main.jpg -
Medina invites bids for major stormwater project11 August 2026

Saudi Arabia’s Madinah Municipality has issued a tender for an engineering, procurement and construction (EPC) contract to upgrade the city’s rainwater drainage network.
According to regional project tracker MEED Projects, it is the first main contract tender the municipality has issued for a major water infrastructure project since 2022.
The $30m project covers the construction of rainwater drainage networks and the repair of existing stormwater pipelines across major roads and corridors within the urban area of Medina.
It aims to improve the performance of the city’s stormwater drainage system, reduce surface flooding, and protect roads and nearby assets during heavy rainfall.
The bid submission deadline is 5 September.
According to MEED Projects data, Madinah Municipality completed two rainwater drainage network projects in Medina in 2024.
The local Al-Ayuni Investment & Contracting was the EPC contractor for both Phase 1 and Phase 2 projects. Saudi contractor Azmeel Contracting also previously submitted bids for both projects.
The municipality is also understood to be nearing completion of a separate Phase 1 rainwater drainage network project in Al-Rawabi in Al-Madinah province. This project was tendered in 2022 and awarded to Al-Naeim Contracting (Saudi Arabia) in 2023.
Meanwhile, Madinah Municipality received prequalification documents at the beginning of the year for two stormwater drainage projects in Yanbu. It is unclear if the main contract tender will be issued this year.
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Adnoc Gas expects Habshan to hit full capacity in 202711 August 2026
Adnoc Gas hopes to restore full output capacity at its Habshan gas processing facility in Abu Dhabi by the second quarter of next year, following attacks on the facility in March and April during the US-Iran conflict.
Adnoc Gas, the natural gas processing business of Abu Dhabi National Oil Company (Adnoc Group), said it has already restored 85% of the Habshan facility’s capacity, surpassing the year-end target set in May.
The Habshan complex is one of the largest gas processing facilities in the UAE and the wider Middle East and North Africa region. It has a processing capacity of 6.1 billion cubic feet a day. The complex comprises five trains and 14 processing units that receive gas feedstock from onshore and offshore fields in Abu Dhabi.
The Habshan facility was struck at least three times in March and April by Iranian drones and missiles. On 19 March, UAE authorities suspended operations at Habshan after it was affected by debris falling from Iranian missiles intercepted by the country’s air defence systems.
Adnoc Gas then announced on 23 March that operations were continuing safely across its asset base, after similar missile and drone attacks by Iran on facilities owned by its parent, Adnoc Group, although it did not specifically mention the Habshan plant.
The worst of the attacks on Habshan took place on 3 April, when Iranian drones intercepted by the UAE’s air defence systems caused damage at the site, resulting in the death of an engineer working at the facility for Egyptian contractor Petrojet during an evacuation. Four other contractors sustained minor injuries, but were later discharged from hospital after receiving treatment.
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On 8 April, Abu Dhabi authorities said three people – two Emiratis and an Indian national – sustained minor injuries after debris fell at the Habshan gas complex following a successful interception by the UAE’s air defence systems.
The debris also sparked several fires at the facility, prompting a temporary suspension of operations as safety and response teams assessed the situation.
“Adnoc Gas responded swiftly to the security-related incidents at the Habshan site on 3 and 8 April, prioritising safety and minimising disruptions to customers,” the company said on 10 August.
“The company has concluded its technical assessment of the impact from these incidents and recovery has progressed ahead of schedule, with gas supply already restored to 85%,” Adnoc Gas said as part of its announcement of financial results for the second quarter of 2026.
During a press conference to discuss Adnoc Gas’ Q2 2026 results, Peter Van Driel, the company’s chief financial officer, said: “At the moment, we have progressed to 85% of supply being reinstated, so the balance will be reinstated between now and the first half of 2027.
“If I look at the cost impact, we are still firming up our estimates. There are uncertainties around the pricing of certain items that we need to install as part of the final reinstatement.
“If we look at the key driver for our results in the second half, the 85% reinstatement of supply is definitely important. We’re encouraged by the fact that the 85% was delivered ahead of schedule,” Van Driel told journalists.
Fatema Al-Nuaimi, Adnoc Gas’ CEO and board member, said: “If I may add one point: it might be 85%, but in reality, today we are supplying 100% of our customers’ requirements locally.”
She added: “On exports, of course, we try our best to satisfy requirements and work closely with customers. But in terms of gas supply to the UAE, we are at 100%.”
Role of robotics and AI
Responding to a question about the deployment of robotics and artificial intelligence (AI) to carry out damage assessment and repair work at the Habshan gas processing facility, Al-Nuaimi said: “One of the technical challenges in restoring the facilities quickly was that we had to inspect a significant part of our assets – some 600 kilometres of piping of different sizes across the facilities.
“If we had done this in the conventional way, we would have spent around 100 additional days putting up scaffolding and sending people to conduct manual and visual inspections.”
The CEO continued: “Instead, we used robotics supported by AI-driven software, which enabled us to shorten the inspection and response time and carry out repairs faster.
“It was not just about time; it was also about safety. It spared us from sending our people into critical areas that might not yet have been safe.”
She added: “We also used robotics in responding to fires and accessing certain parts of the assets.
“When we talk about AI, it is not a headline. It is real work and real value that we see every day in our business,” Al-Nuaimi further remarked.
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