meed-logo

line1 line2 line3
SIGN IN / REGISTER

Riyadh to sustain power spending

12 March 2024

Latest news on Saudi Arabia’s power sector:

> Neom to start qualification for $2.7bn hydropower scheme
> Saudi power buyer holds Remah and Nairiyah meetings
> Enowa gives extra day for Gayal and Shiqri bidders
> Gayal and Shiqri bidders race to meet deadlines
> Neom extends Duba Energy Park bid deadline
> Data centre activity soars in Saudi Arabia
> US firm wins Al Kahfah solar tracker package
> Saudi-Omani team to set up transformers plant

 

The project pipeline in Saudi Arabia’s power generation sector continues to expand unabated.

The value of projects in execution or about to start construction has increased by 17% to $34bn compared to six months earlier, according to the latest available data from regional projects tracker MEED Projects.

The value of projects in the pre-execution phase similarly increased by 16% to reach $51bn during the same period. New schemes are expected to be announced in the coming 12-18 months, including power generation projects catering to the $500bn Neom development.

Two key factors underpin the ramp-up of both conventional and renewable energy generation capacity in the kingdom, notes a Dubai-based senior executive with an international developer.

“Saudi Arabia intends to become the renewable supplier of choice on the GCC grid,” the executive said, referring to the regional network linking the electricity grids of Bahrain, Kuwait, Oman, Qatar, the UAE and Saudi Arabia.

The second factor is the kingdom's push for industrialisation and urbanisation, including the adoption of electric vehicles and data centres.

“Saudi Arabia has very strong regulations to keep data within its domicile and the digitalisation needed to achieve the kingdom’s modernisation plans needs large data centres and corresponding electricity supply,” she notes.

Overall, Saudi Arabia awarded power generation contracts worth more than $16.1bn in 2023, which is higher than the total value of contracts awarded in the preceding eight years and nearly six times the value of contracts awarded in 2022.

The kingdom’s principal buyer, Saudi Power Procurement Company (SPPC) and its sovereign wealth vehicle, the Public Investment Fund (PIF), awarded the bulk of these contracts.

Shrinking renewables share

The share of renewable energy in the total value of awarded contracts shrunk to 28%, from about 82% in 2022, due to the award last year of the first gas-fired independent power producer (IPP) projects since 2016.

SPPC awarded a consortium comprising Saudi Electricity Company and Saudi utility developer Acwa Power the $3.9bn contract to develop and operate the Qassim 1 and Taiba 1 IPP projects in November 2023. Each combined-cycle gas turbine (CCGT) plant has a capacity of 1,800MW.

A team comprising the local Al Jomaih Energy & Water, France’s EDF and the local Buhur for Investment won the contract to develop the other pair of CCGT-based plants – the Taiba 2 IPP and Qassim 2 IPP schemes, each of which has a capacity of 1,800MW.

SPPC also awarded the contracts for the solar photovoltaic (PV) schemes under the fourth procurement round of the kingdom’s National Renewable Energy Programme (NREP).

A consortium that includes France's EDF Renewables, Abu Dhabi Future Energy Company (Masdar) and the local company Nesma won the contract to develop the 1,100MW Hinakiyah solar IPP project. A consortium led by China's Jinko Power won the contract to develop and maintain the 400MW Tubarjal solar IPP scheme.

The PIF, meanwhile, awarded contracts last year for the development of three solar PV schemes with a total combined capacity of 4.5GW to Acwa Power and its partner Water & Electricity Holding Company (Badeel). The 2GW Al Rass 2, 1.1GW Saad 2 and 1.4GW Al Kahfah solar PV IPPs require a total investment of about $3.4bn.

Unawarded projects

Following the award of these contracts, SPPC started the procurement process for four solar PV schemes with a total combined capacity of 3.7GW under the NREP fifth round, and four new CCGT schemes with a total combined capacity of 7.2GW.

Bids are due on 10 June for the 2GW Al Sadawi, 1GW Al Mas, 400MW Hinakiyah 2 and 300MW Rabigh 2 solar PV IPP schemes.

Bids are also due in late June for the Remah 1 and 2 and Al Nairiyah 1 and 2 gas-fired CCGTs.

As of early March, Neom’s utility subsidiary, Enowa, had received bids for two renewable energy engineering, procurement and construction (EPC) contracts, the 1.2GW Gayal wind farm and 800MW Shiqri solar farm.

Enowa is understood to be preparing a site for two CCGT plants to be built on a fast-track basis at Duba Energy Park. The first phase comprises a transportable gas turbine generator (GTG) with a capacity of 300MW, which is designed to deliver emergency power to Neom.

The second phase is a permanently installed 500MW facility comprising heavy-duty GTGs. Both are considered fast-track projects, with the first phase due for completion in early 2024 and the second phase in early 2025.

The first phase of a multi-gigawatt programme to build renewable energy capacity in Neom using a public-private partnership model is also expected to start soon.

Soaring costs

The raft of new projects coming to the pipeline is exerting pressure, particularly for the CCGT supply chain, experts tell MEED. “On average, the EPC prices have more than doubled since before the Covid-19 pandemic began,” says an executive working for an original equipment manufacturer (OEM).

The average EPC cost per kilowatt for CCGT plants with a capacity of over 1.5GW is understood to have reached approximately $750 a kilowatt in 2023, which is more than twice the average cost in 2019. EPC costs for smaller plants have similarly posted significant increases.

Industry sources say the turbine supply chain problem arises from the decision by some OEMs to reduce capacity over the past few years, driven by a combination of the Covid-19 pandemic and the threat of curtailed demand due to the push to decarbonise electricity systems.

The post-Covid-19 recovery, as well as the resurgence of demand for gas-fired power plants in the Middle East – and even in some countries in Europe – along with the expressed preference by most GCC clients for European-made gas turbines, has resulted in a seller’s market.

A Dubai-based OEM executive told MEED last year that its EU-made turbines are booked for several years, but order deliveries can still be shuffled between customers, so they do not expect major delays in delivering to clients. "It's definitely a seller's market right now for turbines. We have capacity in other regions like China, but customers prefer [turbines made in] EU factories”.

In comparison, the jury is still out on solar PV costs, although historical tariff data indicates a general upward trend between the record-low tariffs seen in 2021 and those submitted last year.

Transmission and distribution

Transmission and distribution (T&D) contracts exceeding a total of $12bn are under execution in Saudi Arabia, with an estimated $22.4bn in the pre-execution phase.

The value of contracts awarded in 2023, which sits at $4bn, exceeded the previous year’s total by 41%. The contract to build a high-voltage, direct current transmission system between Neom’s Oxagon industrial cluster and Yanbu is the largest T&D contract to have been awarded last year.

Volume-wise, 59 T&D contracts were awarded in Saudi Arabia last year compared to 64 in 2022.

Saudi Arabia has been gradually expanding the reach of its grid, both domestically – due to the development of new communities and industries and the growth of renewable energy capacity – as well as internationally.

Projects to link with Egypt and other countries in the GCC, as well as with Iraq and Jordan, are under way, while preliminary studies are ongoing to link the kingdom’s power grid further afield, including to the grids of India and Greece.

Energy storage and nuclear

A new project activity segment within Saudi Arabia’s power sector is emerging. SPPC intends to start the procurement process this year for the 2GW first phase of a project to procure 10GW of battery energy storage system (bess) capacity by 2030.

Bess comprises rechargeable batteries that can store and discharge energy from various sources when needed.

Saudi Arabia plans to locate its bess facilities near demand centres to boost the electricity grid's spinning reserves as more renewable energy is expected to enter its electricity production mix.

The 2GW first phase of the project entails building several plants at different locations, with individual capacities ranging from 50MW to 300MW each. 

Finally, the procurement process is moving – albeit slowly – on the Duwaiheen nuclear power plant, Saudi Arabia’s first large-scale nuclear power project. Bids for the main contract are due in late April, following several deadline extensions since the kingdom invited selected companies to bid for the contract in 2022.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11584212/main2905.gif
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Jordan tenders advisory for wastewater treatment plant

    9 September 2026

    The Water Authority Jordan (WAJ) has issued an invitation to prequalify for advisory services for the rehabilitation and expansion of the Shallala wastewater treatment plant in Irbid, northern Jordan.

    The Shallala plant was commissioned in 2013 with a design capacity of about 14,000 cubic metres a day (cm/d).

    The rehabilitation and expansion project will increase its treatment capacity to about 30,500 cm/d to meet projected wastewater flows through 2050.

    The PIU Support and Construction Supervision Consultancy Services tender was released on 19 August.

    The submission deadline is 21 September.

    The consultancy will support the project implementation unit and provide construction supervision services for the project. The project has an estimated value of $69m and is being financed by the European Bank for Reconstruction and Development.

    The planned works include rehabilitating the existing activated sludge and treatment units and constructing a new treatment train.

    The scope also includes installing biogas combined heat and power units, improving sludge handling and dewatering systems, and installing odour control and chemical containment systems.

    WAJ is also undertaking the upgrade and expansion of the Ain Ghazal wastewater treatment plant in Amman.

    The existing facility had a capacity of 330,000 cm/d and is being upgraded to 726,712 cm/d to accept and treat expected incoming flows until 2045.

    The local Arab Towers Contracting Company was appointed as the main contractor for the project last year.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19498520/main.jpg
    Mark Dowdall
  • Medina’s KEC signs real estate project development deal

    9 September 2026

    Medina’s Knowledge Economic City (KEC) has signed an agreement with Riyadh-based Kaden Investment Company to develop a mixed-use project in Medina.

    The project will have an estimated gross floor area of about 230,000 square metres (sq m).

    According to a statement filed by KEC with the Saudi Exchange (Tadawul), the project – called Multaqa Al-Madinah 2 – will be built on a 92,000 sq m plot located directly north of the first phase of the Multaqa Al-Madinah development.

    It is expected to include about 1,527 residential units across three residential zones, along with commercial and office space totalling about 31,108 sq m of net leasable area.

    It will also feature parking, recreational and service facilities, landscaping and other supporting infrastructure.

    KEC and Kaden intend to deliver the project through a closed-ended real estate investment fund regulated by Saudi Arabia’s Capital Market Authority.

    Under the proposed structure, KEC will contribute the land as an in-kind contribution and hold 75% of the fund units, while Kaden will contribute cash and hold the remaining 25%.

    Kaden will also serve as the development manager.

    KEC said the land has been initially valued at about SR692.3m ($184.6m), while the total equity required for the project is estimated at around SR833m.

    Once final agreements are signed, KEC expects to receive SR67.7m in cash and fund units valued at approximately SR624.6m.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19492407/main.png
    Yasir Iqbal
  • Morocco signs agreement for synthetic fuel complex

    9 September 2026

    Switzerland-based Synhelion has signed an agreement with the Government of Morocco with the aim of developing a large-scale commercial synthetic fuel plant in the country’s southern Tan-Tan province.

    The memorandum of understanding (MoU) relates to a facility with the capacity to produce 100,000 tonnes a year of fuel, according to a statement released by the company.

    Synhelion has secured land for the project site and established a subsidiary in Morocco to develop the fuel complex.

    Gianluca Ambrosetti, one of Synhelion’s co-chief executives, said: “Morocco’s exceptional renewable energy resources and its clear industrial strategy make it an ideal location for scaling our synthetic fuel technology.

    “With the MoU signed, the land reservation secured and our branch in place, we are moving from evaluation to execution and toward our first commercial-scale plant in the region.”

    Synhelion specialises in producing hydrocarbon fuels using renewable energy. Its products include synthetic jet fuel, gasoline and diesel.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19489903/main.jpg
    Wil Crisp
  • Iraq solar package on track to come online in December

    9 September 2026

     

    The 1,000MW solar photovoltaic project in Artawi – also called Ratawi – in southern Iraq is on track for its second phase to come online on 8 December, according to industry sources.

    This phase has a capacity of 250MW and will bring the project’s total online capacity to 500MW.

    The first phase of the project, also with a capacity of 250MW, came online in March this year.

    The third and fourth phases, each with a capacity of 250MW, are expected to be brought online next year.

    The solar project is part of the broader Gas Growth Integrated Project (GGIP), which has an estimated total value of $27bn and a first phase worth an estimated $10bn.

    The solar project’s ownership differs from the headline GGIP ownership structure, with its ownership equally divided between France’s TotalEnergies and QatarEnergy.

    The wider GGIP consortium includes TotalEnergies, Iraq’s Basra Oil Company and QatarEnergy, which hold stakes of 45%, 30% and 25%, respectively.

    China Energy Engineering Corporation is part of a consortium that is executing the main engineering, procurement and construction contract for the project.

    It announced that the first 250MW of capacity had been connected to the grid on 4 March this year.

    The consortium also includes China Energy Engineering Group Tianjin Electric Power Construction Company and Chengdu-headquartered Southwest Electric Power Design Institute Company.

    The project scope includes:

    • Construction of a substation
    • Installation of a 132kV booster station
    • Installation of solar panels
    • Installation of transformers
    • Laying of transmission lines
    • Construction of related infrastructure

    In February 2025, Basra Investment Commission director Alaa Abdul Hussein said the solar plant had an estimated total value of $820m.

    The GGIP programme is focused on developing four major projects in Iraq:

    • The Common Seawater Supply Project (CSSP)
    • The Ratawi gas processing complex
    • The 1GW solar power project for Iraq’s electricity ministry
    • A field development project at Ratawi, known as the Associated Gas Upstream Project (AGUP)

    All four of these projects are currently under execution, though there have been some delays related to the regional war that started when the US and Israel attacked Iran on 28 February.

    The conflict has caused significant disruption to shipping through the Strait of Hormuz, which Iraq uses to export crude oil and import equipment and materials for projects.

    READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19489818/main.jpg
    Wil Crisp
  • Saudi water sector hits sharp slowdown

    8 September 2026

     

    Saudi Arabia’s water sector has recorded a sharp slowdown in contract awards this year, with $3.94bn of new contracts awarded as of early September.

    According to regional project tracker MEED Projects, this is well below the $10.7bn recorded in 2025, $13bn in 2024 and a record $15.3bn in 2023.

    The slowdown comes as several major projects remain in the procurement process, with some yet to reach financial close or contract award, while tender deadlines for other schemes have been pushed back.

    Among the largest is the estimated $2bn Riyadh-Qassim independent water transmission pipeline. The 859-kilometre project will have a transmission capacity of 685,000 cubic metres a day (cm/d). Vision Invest was selected as the preferred bidder last December; however, more than eight months later, an official developer’s agreement has not yet been signed.

    Similarly, the Arana and Hadda independent sewage treatment plant (ISTP) projects have yet to reach the financial close originally targeted for the second quarter. The two schemes will provide a combined treatment capacity of 350,000 cm/d.

    Delays extend further down the procurement pipeline. The latest developer bid deadline for the estimated $150m Riyadh East ISTP is 29 September, almost a year after the request for proposals (RFP) was issued in October 2025.

    Procurement for the main contracts for the Jubail-Buraidah and Ras Mohaisen-Baha-Mecca independent water transmission system projects could also slip into 2027, amid delivery-model changes by Water Transmission Company.

    New awards

    The market received a boost in September when Saudi Arabia’s National Water Company (NWC) announced it had signed a SR1.3bn ($347m) deal with a Saudi-Chinese consortium for package 10 of its long-term operations and maintenance programme.

    The consortium – comprising China’s Jiangsu United Water Technology and Saudi-based Armada Holding – will rehabilitate, operate and maintain nine sewage treatment plants (STPs) with a combined design capacity of more than 337,000 cm/d. Based on the latest procurement timeline, it is unclear whether the selected consortium for package 11 will be formally announced this year. Packages 12 and 14 remain under tender while package 16 is next in line, with its RFP not expected to be issued before November.

    NWC is the second-largest awarding entity by value in 2026, accounting for $1.09bn, or about 28% of the total. Saudi Aramco is the largest, with $2.15bn, meaning the two organisations account for more than 82% of awards so far this year.

    Aramco’s activity has been led by two major oil field developments. In June, it awarded the $1.5bn Safaniya onshore surface facilities project: package 1 to a joint venture of Tecnimont and Consolidated Contractors Company. The package includes a water treatment and injection plant supporting upstream production.

    It also awarded the second phase of its Zuluf water treatment project to a joint venture of Almar Water Solutions and AlJomaih Energy & Water. The project will add a 308,000-cm/d treatment facility at Tanajib in the Eastern Province, supplying water for injection at the offshore Zuluf oil field.

    The concentration of awards in industrial projects this year has been notable. Against the slowdown in municipal water infrastructure procurement, much of the value awarded so far has been linked to the water requirements of oil and gas and mining developments.

    The third-largest award is the $350m Taif Ar Rjum water pipeline project, being developed by Saudi Arabian Mining Company (Maaden) in Mecca. The project will support the Ar Rjum gold mining and processing facility and is being developed under a build-own-operate-transfer model. 

    By project type, treatment projects make up the largest share of awards, at $2.85bn or about 72% of the total. Transmission projects account for $980m and cooling projects for a further $110m, while no major desalination or water storage contracts have been awarded so far this year.

    Project pipeline

    The slowdown in awards appears to reflect the timing of projects moving through procurement rather than a fundamental weakening in demand for water infrastructure.

    Saudi Arabia continues to face rising demand for desalination, wastewater treatment and water transmission as population growth and industrial expansion drive demand for water.

    Sharakat, formerly Saudi Water Partnership Company, set out the next phase of the kingdom’s water investment programme in its latest seven-year statement, published in March.

    The plan points to a significant expansion in desalination capacity. Capacity from Sharakat-procured projects is expected to increase from about 3.88 million cm/d in 2025 to roughly 7.18 million cm/d by 2031.

    The increase will be supported by seven new independent water plants (IWPs) with a combined capacity of about 2.8 million cm/d, in addition to projects already operating, under construction or in procurement.

    However, several of the planned projects have yet to move into active procurement, while others have seen their expected timelines pushed back.

    Among the schemes affected are the Ras Al-Khair, Tabuk, Shuqaiq and Jizan IWPs, which have all progressed through prequalification, but have seen changes to their expected procurement schedules.

    The largest is phase two of the Ras Al-Khair IWP, a 600,000-cm/d reverse osmosis desalination plant that has been in development for more than a decade.

    The revised schedule indicates that the $400m Al-Shuqaiq 4 IWP is expected to be the first of the seven new plants to reach commercial operation. Its main contract had been expected to be tendered later this year, but it is now understood that the first RFP will not be issued until early 2027.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19466739/main.gif
    Mark Dowdall