meed-logo

line1 line2 line3
SIGN IN / REGISTER

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.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10654009/main.gif
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Morocco to invest $300m in Casablanca port expansion

    9 July 2026

    Marsa Maroc, Morocco’s biggest port operator, has announced that it will invest MD3bn ($300m) to expand container-handling capacity at the Port of Casablanca, following the grant of a 20-year extension to its concession for operating Container Terminal 3 (TC3).

    The concession extension will be undertaken through Marsa Maroc's subsidiary, TC3PC.

    Marsa Maroc will increase TC3’s capacity from 600,000 to 900,000 twenty-foot equivalent units (TEUs) by 2030.

    The wider programme is expected to lift the Port of Casablanca’s overall container capacity to more than 2 million TEUs.

    Planned works include extending quay infrastructure, modernising cargo-handling equipment and reconfiguring storage areas at the two container terminals operated by Marsa Maroc at the port.

    The company said that these upgrades are intended to improve operational efficiency and enhance cargo throughput.

    The latest announcement follows Marsa Maroc's unveiling of a MD21bn ($2.1bn) investment programme in March, as it looks to reinforce its position as a leading regional ports player through to the end of this decade.

    Marsa Maroc reported consolidated revenue of MD5.7bn ($578m) in 2025, a 16% rise from MD5.8bn ($500m) a year earlier.

    The company attributed the growth to increased volumes handled at its terminals, as well as a broader range of logistics services.

    Operationally, cargo throughput climbed to more than 67 million tonnes, up 6% year-on-year, and a record for the group.

    Container volumes also hit a new milestone, topping 3 million TEUs for the first time, consolidating Marsa Maroc’s standing as Africa’s fourth-largest container operator.

    Marsa Maroc is the fourth-largest listed firm in Morocco by market capitalisation, according to UK-based Drewry Maritime Research.

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

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588652/main.jpg
    Yasir Iqbal
  • Riyadh tenders Quality Valley mixed-use PPP project

    9 July 2026

     

    Saudi Arabia’s State Properties General Authority, in collaboration with the National Centre for Privatisation & PPP, has tendered a contract to transform the Saudi Standards, Metrology & Quality Organisation's headquarters site in Riyadh’s Al-Muhammadiyah area into a mixed-use district.

    The firms have been allowed until 8 October to submit their proposals.

    Known as the Quality Valley Riyadh project, the public-private partnership (PPP) scheme will be developed on a design, build, finance, operate, maintain and transfer basis.

    In May, MEED reported that 59 firms had expressed interest in the contract to develop the project.

    Unless otherwise stated, the interested companies are local. They now include:

    Developers / real estate developers:

    • Abdulrahman Saad Alrashid & Sons (Artar)
    • Ajdan Real Estate Development Company
    • AlBawani
    • Al-Gihaz Holding
    • Al-Ayuni Investment & Contracting
    • Alameriah Development
    • Alargan Projects Company
    • Al-Fahd Company
    • Alkhorayef Investment & Development
    • Al-Soliman Real Estate
    • Al-Saedan Real Estate
    • Asyad Holding Company
    • Arabian Construction Company (UAE)
    • Business Deal Company
    • Ezdihar Real Estate Company
    • Hay Developments
    • Heyazah Real Estate Development
    • Kinan International 
    • Ladun Investment Company
    • Lamar Holding (Bahrain)
    • Ledar Investment
    • Liwan Real Estate Development
    • Mada International
    • Naif Alrajhi Investment
    • Pan Kingdom Real Estate
    • Refad Investment & Real Estate Development
    • Retal Urban Development Company
    • Al-Mozaini Real Estate
    • Safari Group
    • SkyBridge (US)
    • Sumou Real Estate
    • Tatweer
    • Technical Development Company
    • Telad Real Estate
    • Zamil Group
    • Zeoof Real Estate Investment & Development

    Contractors:

    • Al-Kifah Holding Company
    • BEC Arabia
    • Buna Al-Khaleej Contracting Company
    • Saudi Binladin Group
    • Fanar Arabian International
    • International Hospitals Construction Company
    • Mohammed Ali Al-Swailem Trading & Contracting (Masco)
    • Mobco Civil Construction
    • Shar Company
    • Shibh Al-Jazira Contracting Company
    • Urbas Middle East (Spain)

    Consultants:

    • Alteraz Design Architectural & Engineering Consultant
    • Dar Al-Riyadh
    • Meinhardt Group (Singapore)
    • Equity Investors
    • Ahmed Al-Thunayan Investment Group
    • Aldrees Industrial and Trading Company
    • Tanami Holding
    • Own United
    • SAH First Investment Company  
    • ​Sumou Global Investment / Poly Manners Architecture
    • Financial Services Providers​​
    • GIB Capital
    • Mefic Capital
    • SNB Capital

    The project comprises commercial offices, a four-star hotel and retail facilities. The contract term is 32 years, in addition to a three-year construction period. The site covers about 191,000 square metres.

    UK-based PricewaterhouseCoopers, US-based engineering firm Jacobs and Saudi Arabia’s Al-Nowaisser & Al-Suwaylimi are advising on the project.

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

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17603519/main.jpg
    Yasir Iqbal
  • Egypt gold project to start commercial production next year

    9 July 2026

    Egypt’s Abu Marawat gold project is on track to begin commercial production in 2027, according to a statement by the North African country’s Petroleum & Mineral Resources Ministry.

    This target was highlighted during a meeting with Abu Marawat Gold Mines Company to review and discuss the Environmental and Social Impact Assessment study for the gold mining and extraction project in the Abu Marwat area of ​​the Eastern Desert.

    Abu Marawat Gold Mines Company is the Egyptian joint-venture company set up to develop and run the Abu Marawat gold project.

    It is owned by Canada’s Aton Resources and Egypt’s Mineral Resources & Mining Industries Authority (MRMIA).

    During the meeting, Yasser Ramadan, chairman of the MRMIA, said that the Marawat project serves as a practical model for the Petroleum & Mineral Resources Ministry’s strategy to establish modern mining operations.

    The Abu Marwat project is located in the Arabian-Nubian Shield region of the Eastern Desert.

    The concession covers an area of more than 57 square kilometres.

    Aton Resources has been advancing the exploration and development of the Abu Marawat concession since its award in 2007, with active exploration starting on the ground in 2009.

    The meeting with Abu Marawat Gold Mines Company was attended by executives from the Petroleum & Mineral Resources Ministry, the MRMIA and the Egyptian Environmental Affairs Agency, as well as representatives from the Red Sea and Qena governorates, members of the House of Representatives and local community leaders.

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

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17603106/main.jpg
    Wil Crisp
  • Firms submit King Salman airport project prequalifications

    8 July 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s King Salman International Airport Development Company (KSIADC) received prequalification statements on 1 July from contractors for two new packages at King Salman International airport (KSIA) in Riyadh.

    These include the construction of a permanent East-West corridor and landside access roads serving the North and South terminals.

    The scope covers the construction of roads, bridges and tunnels.

    The client is expected to float the tenders soon.

    The latest development follows KSIADC's selection of three groups to deliver the Terminal 6 apron, taxiways and other airfield infrastructure at KSIA.

    KSIADC, which is backed by Saudi sovereign wealth vehicle the Public Investment Fund, will initially deliver the project on an early contractor involvement basis.

    In March, MEED exclusively reported that KSIADC had selected three groups for the construction of Terminal 6.

    In November last year, MEED reported that KSIADC was targeting mid-2026 to award the contract for the construction of Terminal 6.

    MEED reported in May 2025 that US firm Bechtel Corporation had been appointed as the delivery partner for the terminals at KSIA.

    According to local media reports, KSIADC’s acting CEO, Marco Mejia, said the project developer has completed the project’s masterplan.

    The reports added that Terminal 6 will boost the airport’s capacity by 40 million passengers.

    The project is expected to be delivered before the start of Expo 2030 Riyadh.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588533/main.jpg
    Yasir Iqbal
  • WEBINAR: Saudi Giga Projects: Market Update for Q3 2026

    8 July 2026

    Webinar: Saudi Giga Projects: Market Update for Q3 2026 
    Tuesday 21 July 2026 | 11:00 AM GST  |  Register now

    Agenda:

    • Saudi projects market outlook and giga projects update
    • 2026 contract awards, project activity and market performance
    • Giga project reprioritisation, funding allocation and delivery progress
    • Key project announcements, milestones and market developments to watch
    • Major contracts awarded across construction, infrastructure and utilities
    • Upcoming tenders and contract award opportunities over the next 6–12 months
    • Geopolitical risks and their impact on project execution and investment
    • Progress across NEOM, The Red Sea, Diriyah, Qiddiya and New Murabba
    • Major non-giga project opportunities and growth sectors across Saudi Arabia
    • Short-, medium- and long-term outlook for the Saudi projects market
    • Audience Q&A

    Hosted by: Yasir Iqbal, MEED's construction editor

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588750/main.jpg
    Yasir Iqbal