Meed | Riyadh to sustain power spending

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.

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Jennifer Aguinaldo

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26 October 2026
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Saudi Arabia raises electricity tariffs
26 October 2026

Saudi Energy, formerly Saudi Electricity Company, has announced revised electricity tariffs, which will take effect on 1 January 2027.

The revised tariff schedule, published on the company’s official website, covers residential, commercial, industrial, agricultural, charitable and government customers.

The largest percentage increase in consumption rates is 16.7%, for residential customers using up to 6,000 kilowatt-hours (kWh) a month. Residential customers will pay 21 halalas/kWh for monthly consumption of up to 6,000kWh, up from 18 halalas. For consumption above 6,000kWh, the rate will rise from 30 to 33 halalas/kWh, a 10% increase.

The industrial tariff will increase by 15%, from 20 to 23 halalas/kWh. Commercial customers, private healthcare facilities and private educational facilities will pay 25 halalas/kWh, up from 22 halalas, for consumption up to 6,000kWh a month, and 35 halalas/kWh above that level, up from 32 halalas.

Tariffs for charities and government customers will also increase. In addition to consumption-based charges, customers will pay a fixed monthly fee based on the capacity of their electricity meter. This replaces the previous separate charge for meter reading, maintenance and billing, with VAT applied to the revised tariffs.

Electricity investment

The new tariffs coincide with changes to water consumption tariffs announced by the National Water Company, also effective from 1 January 2027.

King Salman Bin Abdulaziz Al-Saud directed support measures following a proposal presented by Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.

This includes raising the minimum wage required for Saudi nationals to count as full employees towards private sector localisation quotas under the Nitaqat programme.

The tariff changes come as Saudi Arabia plans substantial investment in its electricity infrastructure. In September 2025, Saudi Energy announced plans to invest SR220bn ($58.7bn) in power infrastructure projects between 2025 and 2030.

A June 2025 report by Fitch Ratings forecast negative free cash flow of about SR16bn a year over the period and rising leverage, reflecting the financial demands of the programme.

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Mark Dowdall
Dubai Municipality confirms AED3bn Tasreef drainage awards
26 October 2026

Dubai Municipality has confirmed it has awarded four contracts worth AED3bn ($817m) to expand the emirate’s stormwater drainage network by about 100 square kilometres under phase three of the Tasreef programme.

The projects will cover Jumeirah, Umm Suqeim, Al-Quoz, Al-Barsha, Al-Wasl and Al-Marmoom. The works include constructing and extending main stormwater drainage lines with diameters of up to three metres.

The four packages are part of Dubai’s AED30bn Tasreef programme, which aims to increase the emirate’s stormwater drainage capacity by 700% and reduce costs associated with pumping stations, network operations and maintenance by 20%.

The contracts have been awarded to China State Construction Engineering Corporation (CSCEC) and three local firms: Arifco Group, Nael Construction & Contracting (NCC) and Detech Contracting. Dubai Municipality did not state which projects the awards relate to.

According to sources, the contract awards include packages TF-15-C1, TF-15-C2 and TF-13-C1.

The first package, TF-15-C1, involves the construction of 21 kilometres of main and secondary drainage lines along Al-Wasl Road and in surrounding areas. It will cover Za’abeel 2, Al-Wasl, Jumeirah 1 and 2, Al-Bada’a, Al-Satwa and Dubai World Trade Centre. The estimated $100m contract was awarded to Detech in July, as exclusively reported by MEED.

The second package, TF-15-C2, covers the corridor between Sheikh Zayed Road and Al-Khail Road. It includes about 14km of main drainage lines serving Al-Quoz Industrial Areas 1, 3 and 4, and Al-Barsha 1. In July, MEED reported that CSCEC had won the engineering, procurement and construction contract for this project.

The third package, TF-13-C1, covers Al-Marmoom, where 23km of drainage infrastructure will be developed. According to a source, Arifco has been awarded this contract.

The final package covers Jumeirah and Umm Suqeim, where about 42km of main drainage lines will serve Umm Suqeim 1, 2 and 3; Umm Al-Sheif; Jumeirah 3; Al-Safa 1 and 2; and Al-Manara.

In May, MEED reported that NCC had been awarded a contract to build a sewage and stormwater drainage system, DS-204. However, it is unconfirmed whether this relates to the same project.

Earlier, in February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

These included two contracts awarded to Detech and one to CSCEC for stormwater drainage infrastructure. In addition, two consultancy contracts were awarded for the study and design of drainage systems in selected areas across the emirate.

Cumulatively valued at AED2.5bn, the new projects will serve 30 vital areas, spanning approximately 430 million square metres and supporting an estimated population of three million residents by 2040.

Previously, in April 2025, an earlier package of awards was announced under phase one of the Tasreef programme. The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

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Nakheel awards $259m Dubai Islands buildings contract
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Dubai-based master developer Nakheel, part of Dubai Holding Real Estate, has awarded local firm Parkway International Contracting a construction contract valued at about AED950m ($259m) for phases two and four of Bay Grove Residences on Dubai Islands.

The package covers 617 residential units across eight buildings, ranging from one to four bedrooms, together with basement structures, infrastructure and community amenities including swimming pools, sports courts and fitness centres.

Phase two comprises 360 homes across four buildings, with main construction scheduled for completion in late 2028.

Phase four includes 257 homes across four buildings, with completion targeted for the second quarter of 2029.

The award follows an earlier contract valued at about AED800m ($218m) awarded to local contractor Metac General Contracting Company for phases one and three, covering 537 homes across seven buildings.

Together, the two contracts total more than AED1.75bn ($476m) and account for all 1,154 planned homes across the 15 buildings of Bay Grove Residences.

Project activity on Dubai Islands has gathered pace in recent months. Earlier this month, Nakheel awarded local firm Mar Marine & Building Contracting a contract for marine and coastal works on Island B. The scope includes constructing breakwaters, removing existing rock revetments and creating a new 320-metre beach near the Bay Villas development, as well as remedial and refurbishment works along approximately 3 kilometres of the island’s western shoreline.

In August 2025, Nakheel awarded Fibrex Contracting a AED2.6bn ($708m) construction contract for the Bay Villas residential project. That followed a AED527m ($143m) contract awarded to Al-Nasr Contracting Company in April 2026 for primary infrastructure and utilities on Island B.

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Morocco plans second high-speed rail phase to Agadir
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Morocco has outlined a second rail investment cycle for 2030-35, which includes beginning construction of a high-speed rail extension from Marrakech to Agadir and connecting Essaouira to the national rail network.

The pipeline forms part of the government’s 2026-31 programme, presented to parliament last week.

The Marrakech-Agadir link is estimated to cost close to MD55bn ($5.5bn) and will cover a 240-kilometre (km) route through the High Atlas Mountains via Chichaoua. Civil engineering structures, including tunnels and viaducts, are expected to account for nearly 70% of the alignment.

In September, the government issued a decree declaring the Marrakech-Agadir and Chichaoua-Essaouira rail corridors to be of public utility, paving the way for land acquisition and expropriation procedures.

Under the long-term masterplan Plan Rail Maroc 2040, Essaouira is expected to connect to the network via a separate line branching off at Chichaoua, designed for operating speeds of up to 200km an hour. The mainline to Agadir is designed for speeds of up to 320km/h.

The 2030-35 cycle also includes rehabilitating the Casablanca-Khouribga-Oued Zem line; constructing a new line between Oued Zem and Beni Mellal via Bejaad, with a branch to Fquih Ben Salah; doubling and upgrading the 140km Benguerir-Safi line; expanding capacity on the Fez-Oujda corridor; and building new-generation passenger stations.

The plans follow Morocco’s ongoing MD134bn ($13.4bn) 2024-30 rail investment programme, which focuses on completing the Kenitra-Marrakech high-speed line ahead of the 2030 Fifa World Cup.

The programme also includes developing regional express network services across five regions, electrifying the Fez-Oujda line and completing a freight rail link to the Nador West Med port.

Work on the Kenitra-Marrakech line had reached about 30% by May 2026, with commercial services targeted to begin in September 2029.

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Riyadh tenders King Salman Stadium works

26 October 2026

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Saudi Arabia’s Sports Ministry has tendered a contract covering early works at King Salman International Stadium in Riyadh.

The scope includes enabling works, site preparation and initial construction activities.

The tender was issued on 11 October, with a submission deadline of 19 November.

The stadium will cover about 660,000 square metres (sq m) and seat 92,000. Facilities will include a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

The wider development will include sports facilities covering more than 360,000 sq m, including two training fields and fan zones; a closed sports hall; an Olympic-sized swimming pool; an athletics track; and outdoor courts for volleyball, basketball and padel.

The stadium is set to host the final of the 2034 Fifa World Cup and will serve as the Saudi national football team’s main base.

US-based architectural firm Populous is the lead architect for the stadium.

Construction of the stadium is expected to be completed by 2029.

The stadium will be located next to King Abdulaziz Park.

Firms submitted prequalification statements for the main design-and-build contract in February.

Saudi stadium plans

In August 2024, MEED reported that Saudi Arabia planned to build 11 new stadiums and refurbish four facilities for the 2034 Fifa World Cup.

Eight stadiums will be located in Riyadh, four in Jeddah and one each in Al-Khobar, Abha and Neom.

A further 10 cities will host training bases: Al-Baha, Jazan, Taif, Medina, Alula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.

There are expected to be 134 training sites in the kingdom, including 61 existing facilities and 73 new venues.

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

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