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.
Exclusive from Meed
-
-
-
Bahrain and US sign nuclear energy agreement
17 July 2025
-
Kuwaiti firm wins $53m Duqm coastal road contract
17 July 2025
-
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends

Related Articles
-
Riyadh Royal Commission awards metro Line 2 extension
18 July 2025
Register for MEED’s 14-day trial access
Saudi Arabia’s Royal Commission for Riyadh City (RCRC) has awarded an estimated $800m-$900m contract to build the next phase of the Riyadh Metro project, which is the Line 2 extension.
The contract was awarded to the Arriyadh New Mobility Consortium.
The Line 2 extension is 8.4 kilometres (km) long, of which 1.3km is elevated and 7.1km is underground. It includes five stations – two elevated and three underground.
It will run from where Line 2 currently ends at King Saud University (KSU) and then travel onwards to new stations at KSU Medical City, KSU West, Diriyah East, Diriyah Central, where it interchanges with the planned Line 7, and then finally to Diriyah South.
According to the consortium’s official website, the consortium members include Italy’s Webuild, India’s Larsen & Toubro, locally based Nesma & Partners, Japan’s Hitachi, Italy’s Ansaldo STS, the Canadian firm Bombardier, Spain’s Idom and WorleyParsons from Australia.
Riyadh Metro Transit Consultants (RMTC), which is a joint venture between the US-based firm Parsons and the French engineering firms Egis and Systra, is the project management and construction supervision consultant.
RMTC has previously worked as a project management and construction supervision consultant on Lines 1, 2 and 3 of the Riyadh Metro scheme.
In 2013, the Arriyadh New Mobility Consortium secured Riyadh Metro’s Line 3 project for $5.21bn.
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.
Riyadh Metro
Riyadh Metro’s first phase features six lines with 84 stations.
The RCRC completed the phased rollout of the Riyadh Metro network when it started operating the Orange Line on 5 January.
In December last year, the RCRC started operating the Red Line and Green Line.
The Red Line, also known as Line 2, stretches 25.1km from the east of Riyadh to the west, via King Abdullah Road, connecting King Fahd Sports City and King Saud University. It has a total of 15 stations.
The Green Line, also known as Line 5, extends 13.3km from King Abdullah Road to the National Museum. With 12 stations, it serves several ministries and government agencies, including the Defence Ministry, the Finance Ministry and the Commerce Ministry, as well as other areas.
Earlier in December, the RCRC started operating the Blue Line (Line 1), Yellow Line (Line 4) and Purple Line (Line 6).
The Blue Line connects Olaya Street to Batha; the Yellow Line runs along King Khalid International Airport Road; while the Purple Line connects Abdul Rahman Bin Awf Road with Al-Sheikh Hassan Bin Hussain Road.
King Salman Bin Abdulaziz Al-Saud inaugurated the Riyadh Metro on 27 November last year.
The network spans 176km. Four of the stations have been designed by signature architects.
The metro is part of the Riyadh Public Transport Project, which encompasses metro and bus systems. The project aims to relieve traffic congestion.
The $23bn project was scheduled to open in 2018, but construction activity slowed due to disputes over prolongation and the disruption caused by the Covid-19 pandemic.
The RCRC awarded the main construction packages for the scheme on 28 July 2013.
In November 2022, the RCRC struck a deal with three contracting consortiums working on the Riyadh Metro scheme regarding the completion of the project’s remaining works.
The Fast consortium won lines 4, 5 and 6, reportedly valued at $7.82bn. The Bacs consortium was awarded lines 1 and 2 for $9.45bn, while Arriyadh New Mobility secured Line 3 for $5.21bn.
US firm Bechtel leads the Bacs consortium. Italian firm Ansaldo STS is the leader of the Arriyadh New Mobility group, and Spanish firm FCC Construccion heads the Fast consortium.
AtkinsRealis has delivered programme management and supervision services for the operations and maintenance of the Riyadh Metro scheme.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14289337/main.jpg -
Firms submit bids for Maaden gold project water pipeline
17 July 2025
Saudi Arabian Mining Company (Maaden) has received proposals from local firms for a water pipeline network it plans to build as part of a larger project to develop a new gold mining and processing facility in the Al-Rjum region of the kingdom.
The Al-Rjum gold mining and processing facility, located in Medina province, is expected to be commissioned by the end of 2027. It will become the largest gold mining operation in Saudi Arabia when operational.
According to sources, the pipeline is to be developed using a build-own-operate-transfer (BOOT) model. The engineering, procurement and construction (EPC) works will have a duration of 38 months, followed by a 20-year operations and maintenance period.
Lamar Holding and Alkhorayef are understood to be the only bidders for the proposed Taif to Al-Rjum water pipeline, which forms package B of the Maaden gold mining project.
The two contractors submitted bids for the water pipeline project on 1 July, sources told MEED.
The main scope of work involves building a 150-kilometre pipeline that will supply treated sewage effluent water to the Al-Rjum gold mining facility.
ALSO READ: Saudi Arabia issues mining exploration licences
The Al-Rjum gold mining and processing facility will have an output capacity of 250,000 ounces of gold a year. The project will increase Maaden’s total gold production to 700,000 ounces a year by 2028, helping the company support Saudi Arabia’s overall goal of doubling gold production by 2030 and achieving a four-fold increase in output by 2040.
MEED recently reported that Maaden had received bids for a tender to develop accommodation facilities for over 4,500 of its workers at the upcoming Al-Rjum gold mining and processing facility.
Bids for the Al-Rjum worker accommodation tender, which is also under the BOOT model, were submitted in late June. The operations and maintenance period for this contract is 15 years.
ALSO READ: Saudi Arabia and Oman open up their minerals potential
https://image.digitalinsightresearch.in/uploads/NewsArticle/14284263/main3503.jpg -
Bahrain and US sign nuclear energy agreement
17 July 2025
Bahrain and the US have signed a cooperation agreement covering the field of peaceful nuclear energy.
The agreement aims to enhance collaboration in nuclear energy, recognising its vital role in sustainable development and energy security. It aligns with Bahrain's ambitious goal of achieving carbon neutrality by 2060 and contributes to global efforts to combat climate change.
As Bahrain explores alternative energy sources, senior officials have previously indicated to MEED that they are closely monitoring developments in small modular reactor (SMR) technology. This is particularly crucial for Bahrain, where limited land availability poses challenges for solar energy projects. Floating solar plants have been identified as a potential solution, but the exploration of nuclear energy and SMRs remains a priority for future energy diversification.
The agreement was signed during an official visit to the US by Prince Salman Bin Hamad Al-Khalifa, the crown prince and prime minister of Bahrain.
The agreement was formalised by Abdullatif Bin Rashid Al-Zayani, Bahrain’s minister of foreign affairs, and Marco Rubio, the US secretary of state.
Al-Zayani added that the agreement builds upon the Comprehensive Security Integration and Prosperity Agreement (C-SIPA) signed in 2023. The agreement aims to strengthen cooperation in defence, security, emerging technologies, trade and investment.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF
UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge
Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:
> AGENDA: UAE-Turkiye trade gains momentum> INTERVIEW 1: Building on UAE-Turkiye trade> INTERVIEW 2: Turkiye's Kalyon goes global> INTERVIEW 3: Strengthening UAE-Turkiye financial links> INTERVIEW 4: Turkish Airlines plans further growth> CURRENT AFFAIRS: Middle East tensions could reduce gas investments> GCC REAL ESTATE: Gulf real estate faces a more nuanced reality> PROJECTS MARKET: GCC projects market collapses> INTERVIEW 5: Hassan Allam eyes role in Saudi Arabia’s transformation> INTERVIEW 6: Aseer region seeks new investments for Saudi Arabia> LEADERSHIP: Nuclear power makes a global comeback> LEVANT MARKET FOCUS: Levant states wrestle regional pressures> GULF PROJECTS INDEX: Gulf projects index continues climb> CONTRACT AWARDS: Mena contract award activity remains subdued> ECONOMIC DATA: Data drives regional projects> OPINION: A farcical tragedy that no one can endTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14281751/main.jpeg -
Kuwaiti firm wins $53m Duqm coastal road contract
17 July 2025
Kuwaiti contractor Combined Group Contracting Company (CGCC) has won a RO20.6m ($53m) contract to construct coastal roads in Duqm.The scope of work covers the construction of roads with a total length of 14 kilometres, including a coastal road, a proposed service road, an extension to an existing service road, a resort street, four roundabouts, future extensions and proposed links.
The contract duration is two years from the start date of construction.
MEED reported in August 2023 that CGCC had emerged as the lowest bidder for the project.
GlobalData estimates that the construction industry in Oman will grow by 3.6% in real terms in 2025, supported by rising foreign direct investment (FDI) in the country, particularly in the manufacturing sector, as well as investment in the energy and transport sectors.
The infrastructure construction sector is estimated to grow by 5.7% in 2025, before recording an annual average growth of 5.2% between 2026 and 2029, supported by the government’s investment in upgrading road and airport infrastructure.
CGCC’s contract win in Oman comes shortly after a key contract win in the UAE, worth AED685m ($186m).
The scope of work under this contract encompasses the upgrade works on Emirates Road, from the Al-Badea intersection in Sharjah to the E55 intersection in Dubai.
The UAE’s Ministry of Energy & Infrastructure is the project client.
The contract duration is 25 months.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF
UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge
Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:
> AGENDA: UAE-Turkiye trade gains momentum> INTERVIEW 1: Building on UAE-Turkiye trade> INTERVIEW 2: Turkiye's Kalyon goes global> INTERVIEW 3: Strengthening UAE-Turkiye financial links> INTERVIEW 4: Turkish Airlines plans further growth> CURRENT AFFAIRS: Middle East tensions could reduce gas investments> GCC REAL ESTATE: Gulf real estate faces a more nuanced reality> PROJECTS MARKET: GCC projects market collapses> INTERVIEW 5: Hassan Allam eyes role in Saudi Arabia’s transformation> INTERVIEW 6: Aseer region seeks new investments for Saudi Arabia> LEADERSHIP: Nuclear power makes a global comeback> LEVANT MARKET FOCUS: Levant states wrestle regional pressures> GULF PROJECTS INDEX: Gulf projects index continues climb> CONTRACT AWARDS: Mena contract award activity remains subdued> ECONOMIC DATA: Data drives regional projects> OPINION: A farcical tragedy that no one can endTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14281451/main.gif -
Algeria awards $855m contract for gas production project
17 July 2025
Register for MEED’s 14-day trial access
Algeria’s national oil and gas company Sonatrach has awarded an $855m contract to China’s Jereh Group for a project to develop facilities at the Rhourde Nouss gas field.
Jereh Group said that its subsidiary Jereh Oil & Gas Engineering will build a natural gas booster station in the Rhourde Nouss gas field and upgrade and renovate related transmission pipelines.
The Yantai-based company cited a letter of award from Sonatrach and said that the contract will boost the company's footprint in North Africa’s oil and gas engineering service sector.
The Rhourde Nouss boosting project will centralise the boosting of natural gas produced by the gas field and the adjacent Gassi Touil gas field, to improve their production efficiency and natural gas processing capacity, the company said.
Sonatrach, the largest gas producing company in Africa and the largest state-owned enterprise in Algeria, will pay $629.1m and $226m for the construction of the project, Jereh said.
Jereh's growing footprint
Jereh has been expanding overseas in recent years and has won contracts with major Middle Eastern oil and gas clients, including Saudi Aramco, Abu Dhabi National Oil Company (Adnoc) and Kuwait Petroleum Corporation.
In June 2021, the company was awarded a contract for the design, procurement and construction of a gas debottlenecking project in Algeria.
The project was located in the Bir Rebaa Nord and Rhourde Ouled Djemma fields, which are located in the eastern Algerian desert, about 300 kilometres southeast of Hessi Messaoud.
The client on that project was Groupement Sonatrach Eni, a joint venture of Sonatrach and Italian energy company Eni.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF
UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge
Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:
> AGENDA: UAE-Turkiye trade gains momentum> INTERVIEW 1: Building on UAE-Turkiye trade> INTERVIEW 2: Turkiye's Kalyon goes global> INTERVIEW 3: Strengthening UAE-Turkiye financial links> INTERVIEW 4: Turkish Airlines plans further growth> CURRENT AFFAIRS: Middle East tensions could reduce gas investments> GCC REAL ESTATE: Gulf real estate faces a more nuanced reality> PROJECTS MARKET: GCC projects market collapses> INTERVIEW 5: Hassan Allam eyes role in Saudi Arabia’s transformation> INTERVIEW 6: Aseer region seeks new investments for Saudi Arabia> LEADERSHIP: Nuclear power makes a global comeback> LEVANT MARKET FOCUS: Levant states wrestle regional pressures> GULF PROJECTS INDEX: Gulf projects index continues climb> CONTRACT AWARDS: Mena contract award activity remains subdued> ECONOMIC DATA: Data drives regional projects> OPINION: A farcical tragedy that no one can endTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14278458/main.jpg