Saudi Arabia reinvigorates power sector
7 March 2023
Recent developments indicate that Saudi Arabia is more determined than ever to continue pursuing a multi-pronged energy diversification approach.
Between December 2022 and early March, the kingdom received bids for the contract to build its first nuclear power plant project; issued the tender for the development of 7,200MW of combined-cycle gas turbine (CCGT) independent power producer (IPP) schemes; and appointed a consultant to assess three solar parks with a potential capacity of 30GW.
The rush of new projects contrasts with the sector’s lacklustre performance in 2016-21, when the cumulative value of contracts awarded totalled a mere $5.5bn, reaching a record low of $55m in 2017.
The new-found momentum began last year, with $8.1bn-worth of contracts awarded, the highest over the 10-year period starting in 2013.
Last year’s contract awards include the estimated $4bn contract for the renewable energy and battery storage facility catering to the Neom green hydrogen project. Contracts for the 1.2GW third round of the kingdom’s National Renewable Energy Programme (NREP) and the Public Investment Fund's (PIF) 2.06GW Shuaibah 2 solar photovoltaic (PV) project were also awarded.
This has taken the overall capacity of solar projects under construction in Saudi Arabia to roughly 6,230MW, excluding the captive facility catering to the Neom green hydrogen project – a remarkable feat given that the kingdom has significantly lagged behind its renewable energy targets.
As of last year, the kingdom only has an estimated 842MW of renewable energy installed capacity, mainly from the 300MW Sakaka solar PV facility and 400MW Dumat al-Jandal wind farm.
This equates to just 3 per cent of its initial national goal to install 27.3GW of renewable energy capacity by 2024 and 1.4 per cent of its 2030 goal of 58.7GW.
The impact of the Covid-19 pandemic and war in Ukraine has affected the delivery of most of the projects, according to a Saudi-based expert, due to disrupted supply chains and global inflation.
“The Covid-19 pandemic affected projects not just in Saudi Arabia, but everywhere in the world,” he says.
Other experts insist that the kingdom needs to make an unprecedented adjustment to meet its ambitious 2030 target.
In response, state offtaker Saudi Power Procurement Company (SPPC) launched the procurement process last year for NREP’s fourth round.
Phase four comprises two solar PV IPP schemes with a total combined capacity of 1.5GW and three wind IPPs with a total combined capacity of 1.8GW. Bids for these contracts are due by April and May this year, respectively.
In early March, Germany-based ILF Consulting Engineers (ICE) also announced that it had been selected to undertake the pre-development studies for three solar PV parks in Saudi Arabia with a potential combined capacity of 30GW, the largest of its kind ever planned in the region, if not globally.
The locations and procurement timeline for the projects have not yet been announced, but the tendering process will most likely commence once the initial studies are complete, according to a source familiar with the projects.
Going nuclear
Saudi Arabia’s Finance Ministry’s disclosure that it received bids in late December last year for the contract to build the kingdom’s first nuclear power plant has also significantly raised the power generation sector’s momentum.
The entire project’s budget of roughly $33.5bn, as estimated by MEED Projects, accounts for over a third of the total value of planned and unawarded power generation projects across the kingdom.
The potential award of the nuclear power project – the initial phase of which is understood to be 2.8GW – is not expected to slow down the pace of contract awards for other power generation assets.
As previously stated, the kingdom’s energy diversification programme expects clean and renewable energy to account for half – up from roughly 1 per cent today – of its electricity production mix by 2030.
The long lead time to construct and develop a nuclear power plant could also mean the first reactor is not likely to be ready by the end of the decade.
While the kingdom has not disclosed the list of companies bidding for the project, there is mounting speculation that at least three companies, including Russia’s Rosatom, China National Nuclear Corporation and South Korea’s Kepco, may have submitted a proposal to develop the facility.
RELATED READ: Saudi nuclear move has geopolitical significance
Unlike the solar and wind energy projects, the results of the nuclear energy bids are expected to be announced only by the highest level of leadership within the kingdom due to the strategic and geopolitical importance of nuclear power.
Ramping up gas
In January, SPPC retendered contracts to develop its next gas-fired IPP projects. Initially comprising two projects, each with a capacity of 3.6GW, the Taiba and Al-Qassim IPPs were each split into two 1.8GW schemes, with bids for the four contracts due by mid-2023.
These are the first gas-fired power generation plants to be procured since 2016, when Saudi Arabia awarded the 1,500MW Fadhili IPP to a consortium led by France’s Engie.
Before the retender, SPPC received only a single bid for the 3.6GW Taiba IPP. Wary of net-zero carbon emission targets, many international utility developers declined to bid for the package citing insufficient decarbonisation provisions.
Despite this setback, SPPC sought consultants last year for the transaction advisory contract for its next round of CCGT projects, which will be developed using a build-own-operate model.
The two projects, to be located in Riyadh and Al-Khafji, will each have a design capacity of 3,600MW.
“It is a moving target,” a senior official with a utility developer said about the kingdom’s energy diversification goal.
Various official sources suggest that the country’s current installed power generation capacity stands at 80-90GW, with little to no publicly available figures in terms of the capacity forecast by 2030.
The original target to install 57.8GW of renewable energy capacity by the end of the decade vis-à-vis a goal for renewable energy to account for 50 per cent of the total implies that the 2030 figure could be around 110-120GW.
Keeping this in mind, and the need to retire ageing fossil fuel-fired fleets during the intervening period, appears to justify the need for the kingdom to build more gas-fired power plants while pursuing significant renewable and nuclear capacity.
In terms of attracting more bidders for its current and future CCGT schemes, much will depend on how SPPC and the Energy Ministry address developers’ concerns regarding measures to minimise carbon footprint at the same time as ensuring the assets’ long-term economic feasibility.
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Financial challenge tests Iraq’s resolve
13 May 2026
On 21 April, as a fragile ceasefire held between the US and Iran, the Trump administration halted a $500m shipment in cash headed for Iraq, as it sought to clamp down on Iranian-backed Shia militias in the country.
That cash, derived from Iraqi oil exports and routed via the US Federal Reserve to the Central Bank of Iraq (CBI), is a vital cog in Iraq’s financial arteries, enabling it to cover foreign exchange demand.
This was not the first time that Iraq’s financial system has felt the US’s warm breath on its neck.
Back in February 2025, the US Treasury Department blacklisted five Iraqi banks from participating in dollar transactions, citing concerns about their role in illicit financial flows that benefited Iran’s Islamic Revolutionary Guards Corps.
Iraq has also itself often circumscribed dollar use within its own financial system.
In July 2023, the CBI banned 14 banks from conducting dollar transactions in a crackdown on dollar smuggling. In February 2024, it banned a further eight banks from dollar transactions as part of a crackdown on fraud and money laundering.
Dollar pressure
The recent halt in US dollar cash shipments has nevertheless added pressure to Iraq’s parallel currency market gap, says Lucila Bonilla, lead emerging market economist at Oxford Economics.
“The gap between the parallel exchange rate has widened noticeably against the official peg, to around 20%,” she says.
“Dollar demand has risen as citizens and traders seek to hedge uncertainty – dollar deposits are up, and there are reports of a notable shift in the composition of cash holdings toward dollars.”
Ratings agencies see the US move on Iraqi dollar use as a challenge, but one that might not prove too onerous.
“Iraq can overcome a short-term war as it has $100bn of reserves and its debt profile is bearable,” says Gilbert Hobeika, a director at Fitch Ratings.
“But a longer-term conflict will hurt Iraq as the economy is reliant on oil revenues and government involvement, while facing at the same time risk from the US stopping delivery of US dollars.”
How persistent the pressure proves will depend largely on the duration of the Hormuz shock and how the relationship with the US evolves.
“Forming a new government that is palatable to the US could ease the pressure, though Iraq’s protracted government formation process adds uncertainty to that timeline,” says Bonilla.
The US-Iran war is putting even more pressure on banks.
“There are uncertainties with regard to depositors,” says Hobeika. “The public sector banks have weak management and governance structures. Financial reporting is weak, and that puts pressure on asset quality and capitalisation.”
If the conflict lasts a long time, the government will start withdrawing funds to pay salaries and contractors.
“That will affect deposits at the public sector banks in the near term,” says Hobeika.
State-heavy system
Iraq’s banking system is dominated by a handful of state-owned banks with a market share of 75%-80%, and then 60-plus private banks competing for the remaining 20%-25% of the pie.
“Private banks have struggled to compete in a market with limited opportunities, small deposit bases and a narrow range of products, often focusing on very basic activities,” says Lea Hanna, an analyst at Moody’s.
“In 2019, we had a wave of Islamic banks getting bans on dealing with US dollars – reducing what had been a primary source of business.”
A few private banks have benefitted since then, namely those with majority ownership by foreign banks such as National Bank of Iraq, a subsidiary of Capital Bank of Jordan, and Bank of Baghdad, a subsidiary of Jordan Kuwait Bank.
“Supported by their affiliates, these banks are relatively well run compared to domestic peers and have ample capital buffers,” says Hanna.
“They have captured a large market share of US dollar transfers thanks to their strong US correspondent banking relationships that allow them easier access to US dollars. They have seen a surge in their profitability and an increase in their deposit base.”
Financial reform
The CBI has attempted to introduce reforms to the banking system, as part of a wider effort to enable it to channel funding to the private sector.
In early 2025, it increased the minimum issued and paid-up capital requirement to ID400bn ($305m), along with a requirement to establish correspondent banking relationships for foreign-currency trading. The plan was to increase these in ID50bn increments every six months, to hasten sector consolidation.
However, of Fitch’s rated banks, just two – state-owned Trade Bank of Iraq and Mansour Bank, a subsidiary of Qatar National Bank – met the full capital requirement.
“While a lot of banks managed to increase their capital, a number of them didn’t and have been struggling to improve their systems and compliance with anti-terrorism and anti-money laundering regulations,” says Hobeika.
“These systems take a long time to improve, and it costs the banks too. For that reason, they have agreed with the central bank to postpone implementation to 2027/28.”
The expectation is that the number of private Iraqi banks will shrink from 60 to about half that number by 2028.
“Iraq’s banking sector is undergoing a significant overhaul, with the Central Bank pushing through higher capital requirements, improved anti-money-laundering compliance, and a shift towards commercial banks managing their own international correspondent relationships. These moves are welcomed,” says Bonilla.
But the harder work remains, argues Bonilla: state-owned banks still carry high levels of non-performing loans, weak governance and a history of politically directed lending, while private sector credit remains among the lowest in the region.
“The stakes are high as the IMF estimates that a comprehensive reform of the financial sector, alongside broader governance and regulatory changes, could double Iraq’s non-oil growth potential over the medium term, adding around 4 percentage points to GDP,” says Bonilla.
“For now, the reforms address the plumbing. The structural transformation of a banking system to serve the private sector is still largely ahead.”
Clouded outlook
So far, Iraq’s financial system seems to have averted a worst-case scenario of large-scale deposit withdrawals related to the Iran conflict.
Any deposit withdrawals seem to be more related to the introduction of a digital custom system ASYCUDA (Automated System for Customs Data) aimed at helping the government collect revenues, which saw a lot of traders trying to bypass the custom charges.
“This drove some exporters or traders to source US dollars outside the banking system, in the parallel market, to avoid stricter requirements and up-front payment of customs duties. That has now eased,” says Hanna.
Looking ahead, Fitch anticipates that most government financing is likely to come from the CBI through indirect purchases of government securities.
The central bank’s total claims on the central government represented about 52% of the domestic debt stock and 25% of the total debt stock at end-2024, notes the agency.
It envisages that a smaller portion will come from the government’s cash deposits, anticipated to fall to an average 12% by 2027.
Fitch says the CBI’s balance sheet limits refinancing risks, while the FX reserves are large enough to absorb the expansion of that balance sheet without putting pressure on the exchange-rate peg with the US dollar.
Surging foreign direct investment comes as a source of comfort, with annual inflows rising from around $2bn in 2022 to $5bn-$7bn from 2023 onwards.
Reform of the financial system will remain at the top of the new government’s in-tray.
The regional environment is unconducive to this mammoth task, and it can only hope that an end to the conflict would support ongoing Iraqi efforts to build a financial system comparable to that of some of its Gulf neighbours.
MEED’s June 2026 report on Iraq also includes:
> OVERVIEW: Iraq enters era of resilience, reform and rising risks
> OIL & GAS: Iraqi oil and gas sector in crisis
> POWER & WATER: Focus shifts to delivery of Iraq utilities expansion
> CONSTRUCTION: Momentum builds in Iraq’s post-war construction sectorhttps://image.digitalinsightresearch.in/uploads/NewsArticle/16799540/main.gif -
JinkoSolar signs 2GW deal for Abu Dhabi solar project
13 May 2026
China’s JinkoSolar has signed an agreement with Abu Dhabi Future Energy Company (Masdar) to supply 2GW of photovoltaic (PV) modules for the round-the-clock renewable energy project in Abu Dhabi.
The agreement covers the supply of JinkoSolar’s Tiger Neo series modules for the project, which is being developed by Masdar in collaboration with Emirates Water & Electricity Company (Ewec).
The landmark $6bn project combines a 5.2GW solar PV plant with a 19 gigawatt-hour battery energy storage system (bess).
It entered construction in October 2025 with India’s Larsen & Toubro and Power China working as contractors. It is known as the world’s first gigascale round-the-clock renewable energy project.
Masdar had earlier selected JinkoSolar and JA Solar as preferred suppliers for solar PV modules, and CATL (Contemporary Amperex Technology) as preferred supplier for the bess segment.
The project is designed to provide baseload renewable power and address intermittency challenges associated with solar generation. The developers said the scheme will serve as a model for similar projects internationally.
JinkoSolar said the Tiger Neo modules supplied for the project are based on N-type TOPCon technology and have been adapted to meet the technical requirements of the development.
Senior executives from both companies attended the signing ceremony in Abu Dhabi, including Mohamed Jameel Al-Ramahi, CEO of Masdar, and Charlie Cao, CEO of JinkoSolar.
Jinko has won several major contracts in recent years, including a contract to supply solar PV modules with a capacity of 3GW for Saudi Arabia’s Haden and Al-Khushaybi solar projects.
It also recently announced the signing of a 2GW solar PV module supply agreement with China Energy Engineering Corporation (CEEC) for Saudi Arabia’s Phase Six Khurais PV project.
> Be recognised among the best in the industry at the MEED Projects Awards 2026 …
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Dubai opens prequalification for Jebel Ali STP expansion
13 May 2026
Dubai Municipality has issued a request for qualifications for the Jebel Ali sewerage treatment plant (STP) expansion – phase 3 project.
The DS150/3 project will be delivered under a public-private partnership (PPP) model on a design, build, finance, own, operate and transfer basis.
The project involves the development of a new water resource recovery facility with an ultimate treatment capacity of up to 1 million cubic metres a day (cm/d).
It is being procured through Dubai Municipality’s Sewerage and Recycled Water Projects Department and will be delivered through a two-stage operational approach over a 30-year concession period.
The bid submission deadline is 18 June.
UK-headquartered Deloitte is acting as financial adviser, Aecom as technical adviser and CMS as legal adviser.
Dubai Municipality said the project will also include additional land uses and community-focused amenities as part of broader sustainability and urban integration objectives.
Phase one and two expansion
In April, the deadline was extended for contractors to submit bids for an engineering, procurement and construction (EPC) contract covering the expansion of the Jebel Ali STP phases one and two.
Located on a 670-hectare site in Jebel Ali, the original wastewater facility has a treatment capacity of about 675,000 cm/d following the completion of phase two in 2019, combining approximately 300,000 cm/d from phase one and 375,000 cm/d from phase two.
The upgraded facility will be capable of treating an additional sewage flow of 100,000 cm/d, with the expansion estimated to cost $300m.
The new bid submission deadline is 11 June.
UK-headquartered KPMG and UAE-based Tribe Infrastructure are serving as financial advisers on the project.
> Be recognised among the best in the industry at the MEED Projects Awards 2026 …
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Iraq LNG project delayed until next year
13 May 2026
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Iraq’s first liquefied natural gas (LNG) import terminal, which has an estimated project value of $450m, is now expected to become operational in 2027 due to delays caused by the regional war and disruption to shipping through the Strait of Hormuz.
Work on jetty reinforcement and fixed terminal infrastructure at the Port of Khor Al-Zubair has been delayed, according to a statement from US-based Excelerate Energy, which is contracted to develop the facility.
In its statement, the company said: “We are revising our full-year guidance to reflect the delayed startup of our Iraq terminal due to the ongoing conflict in the Middle East.”
It added: “The Iraq project fundamentals remain unchanged. Looking ahead, we continue to have confidence in our sequenced earnings growth through 2028.”
In October 2025, Excelerate signed a definitive commercial agreement with a subsidiary of Iraq’s Ministry of Electricity for the development of the country’s first LNG import terminal.
The integrated project includes a five-year agreement for regasification services and LNG supply, with extension options, and a minimum contracted offtake of 250 million standard cubic feet a day (cf/d).
Excelerate said: “Jetty reinforcement and construction of the fixed terminal infrastructure have been delayed temporarily due to the conflict in the Middle East and the terminal is no longer expected to commence operations in the third quarter of 2026 as previously disclosed.
“Project startup is now expected in 2027. The long-term fundamentals supporting the project remain unchanged, driven by chronic power shortages and limited domestic gas processing capacity in Iraq.
“Current conditions further reinforce the country’s need for reliable and scalable LNG import infrastructure and construction will resume as conditions allow.”
Earlier this year, Iraq’s Ministry of Electricity said that the terminal was on track to come online on 1 June, ahead of expected gas shortages during the summer months.
Then, in late April, the ministry said the project had been delayed by several months and was expected to come online in August at the earliest.
Although Iraq is Opec’s second-largest oil producer after Saudi Arabia, it is a net natural gas importer because its lack of infrastructure investment has meant that, until 2023, it flared roughly half of the estimated 3.12 billion cf/d of gas produced in association with crude oil.
Iraq’s reliance on flaring associated gas instead of gathering and processing it has prevented the country from fully realising its potential as a gas producer and forced the Iraqi government to rely on costly gas and electricity imports from Iran.
READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDFGlobal energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.
Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
> REGIONAL LNG: War undermines business case for Middle East LNG> CAPITAL MARKETS: Damage avoidance frames debt issuance> MARKET FOCUS: Conflict tests UAE diversificationTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16803348/main.jpg -
Algeria turns the GCC oil crisis into an economic opportunity
13 May 2026
Commentary
Wil Crisp
Oil & gas reporterAlgeria’s state-owned oil and gas company, Sonatrach, is taking advantage of concerns about global gas and crude supplies to sign deals and push ahead with major upstream projects.
In recent weeks, the country has launched an oil and gas licensing round, taken steps to boost crude production in the short term and awarded a $1.1bn oil and gas field development project.
This comes as shipping remains disrupted through the Strait of Hormuz, a key global oil and gas supply route. The disruption began after the US and Israel attacked Iran on 28 February 2026, triggering a regional war.
Algeria’s ramp-up in activity puts it in a stronger position to benefit from higher global energy prices than neighbouring Libya, despite Libya holding Africa’s largest proven oil reserves.
Libya challenges
In Libya, officials have sought to advance oil and gas projects, but the business environment remains challenging due to recurring violence and deep political divisions.
Last month, Libya’s rival legislative bodies approved a unified state budget for the first time in more than 13 years. The Central Bank of Libya confirmed on 11 April that both chambers had endorsed the budget, calling it a key step towards restoring financial stability after prolonged division.
Contractors expected the agreement to accelerate project activity, but so far the deal has yet to translate into meaningful progress on the ground. Earlier this month, MEED reported that Libya’s state-owned National Oil Corporation (NOC) had not yet provided subsidiaries with details of their funding allocations under the new budget.
Libya’s downstream sector was also disrupted this month by a fresh outbreak of violence. On 8 May, military clashes damaged buildings and vehicles, and forced the country’s largest operating refinery and a nearby oil port to shut for two days. On 10 May, Azzawiya Oil Refining Company, operator of the Zawiya facility, said it had lifted the state of emergency, allowing work to resume.
Algeria momentum
While Libya has struggled to capitalise on the current period of higher oil and gas prices, Algeria has significantly increased activity across its hydrocarbons sector.
Last month, Algeria launched a new bid round offering seven exploration blocks to international companies. The round was launched by the National Agency for the Valorisation of Hydrocarbon Resources (Alnaft), which regulates the upstream sector. The blocks are located in Ouargla, Illizi, Touggourt and El-Bayadh.
In parallel, Algeria is implementing short-term measures to raise output. On 3 May, the Ministry of Oil & Gas said the country plans to increase average production by 6,000 barrels a day in June.
Algeria is also pursuing regional export opportunities. Earlier this month, officials signed a framework agreement to enable crude supplies from Algeria to Egypt.
Turkiye has also announced plans to renew and expand its liquefied natural gas (LNG) agreement with Algeria. Turkiye’s Energy and Natural Resources Minister Alparslan Bayraktar said on 8 May that annual volumes could rise to 6.5 billion cubic metres, up from the current 4.4 billion cubic metres a year. The existing agreement is due to expire in September 2027.
Another sign of momentum is the award of a $1.1bn contract for phase two of the Hassi Bir Rekaiz oil and gas field development. The contract was signed by Egypt’s Petrojet and Italian engineering and contracting company Arkad. Petrojet’s share is estimated at about $600m and Arkad’s at about $500m. The client is Groupement HBR, a joint venture of Sonatrach and Thailand’s PTTEP.
Overall, while Libya continues to face obstacles to building sustained momentum in its oil and gas sector, Algeria is pursuing multiple initiatives that are likely to deliver economic benefits in the short, medium and long term.
READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDFGlobal energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.
Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
> REGIONAL LNG: War undermines business case for Middle East LNG> CAPITAL MARKETS: Damage avoidance frames debt issuance> MARKET FOCUS: Conflict tests UAE diversificationTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/16803345/main4150.jpg