meed-logo

line1 line2 line3
SIGN IN / REGISTER

Saudi Arabia’s power sector motors on

11 September 2024

 

Saudi Arabia’s power sector has sustained its project activity momentum over the past six months.

The principal buyer, Saudi Power Procurement Company (SPPC), awarded the contracts to develop two publicly-tendered wind independent power producer (IPP) projects, with a total combined capacity of 1,100MW, under the fourth round of the kingdom’s National Renewable Energy Programme (NREP).

The Public Investment Fund (PIF), responsible for procuring through direct negotiations 70% of the kingdom’s 2030 target renewable energy capacity, let three large-scale solar photovoltaic (PV) projects with a total combined capacity of around 5,500MW.

State majority-owned Saudi Aramco also awarded a contract to develop an independent cogeneration project with an electricity generation capacity of 475MW.

During the same period, SPPC began the tendering process for two combined-cycle gas turbine (CCGT) projects, the Remah and Nairiyah IPPs, each with a capacity of 3,600MW, and for four solar PV schemes with a total combined capacity of 3.7GW under the NREP fifth round.

“It has been a very busy summer,” notes a senior executive with an international utility developer, referring to the submission of bids in August for the contracts to develop the Remah 1 & 2, Nairiyah 1 & 2, and the NREP round-five solar PV schemes.

Notably, the principal buyer has initiated the selection process for consultants who will advise on its next pair of independent CCGT power plants – the 2,400MW Al-Rais and the 3,600MW Riyadh 16 projects.

Saudi Electricity Company (SEC) and SPPC are also understood to be conducting bilateral talks for the development of five CCGT power plants, which, along with those currently being built or tendered, support the kingdom’s mandate to replace fleets running on liquid fuel.

Essentially, the reported SEC projects, each with a capacity of 1,500MW-2,000MW, bear some similarities to PIF’s directly negotiated renewable energy schemes.

These projects help substantiate previous reports that SEC has been seeking to lock in gas turbine equipment deals with a total capacity of 30GW, in line with an overall capacity expansion plan within and outside Saudi Arabia.

The next few years can only get busier, with Saudi Arabia's Energy Minister, Prince Abdulaziz Bin Salman Bin Abdulaziz Al-Saud, confirming in June plans to tender 20,000MW of renewable energy projects annually starting this year, in line with reaching 100GW-130GW of installed capacity by 2030, "depending on electricity demand growth".

This represents a major upward revision to the official 2030 renewable energy capacity target of 58,700MW.

However, it is unclear if this new target considers the renewable capacity that will be installed to power Neom, Saudi Arabia’s largest gigaproject, as well as the requirement of green hydrogen projects that the PIF plans to codevelop.

Wind IPPs

In May, SPPC awarded a team led by Japanese utility developer Marubeni Corporation the contracts to develop the 600MW Al-Ghat wind and 700MW Waad Al-Shamal wind IPPs.

The team of Marubeni and its partner, the local Alajlan Brothers, is also expected to win the contract to develop the 700MW Yanbu wind IPP, the final wind scheme included in NREP’s round four.

These are important awards for Marubeni, which last won an IPP contract in Saudi Arabia in 2021 for the 300MW Rabigh solar scheme.

Notably, the Al-Ghat and Waad Al-Shamal wind IPPs will be developed at world-record-low levelised electricity costs of $c1.565 a kilowatt-hour (kWh), or roughly 5.87094 halalas/kWh, and $c1.70187/kWh or 6.38201 halalas/kWh.

PIF projects

In June, three Saudi utility developers and investors signed power-purchase agreements (PPAs) with SPPC to develop and operate three solar PV projects with a combined capacity of 5,500MW.

The Haden and Muwayh solar PVs, located in Mecca, will each have a capacity of 2,000MW, while the Al-Khushaybi solar PV power plant in Qassim will be able to generate 1,500MW of electricity.

The team that will develop the three projects consists of Acwa Power, PIF-backed Water & Electricity Holding Company (Badeel) and Saudi Aramco Power Company (Sapco), a subsidiary of the state majority-owned oil giant.

The project companies formed for each solar IPP have since signed financing documents for the projects, which will require a total investment of SR12.3bn ($3.3bn). The financing sought was $2.6bn.

These projects comprise round four of PIF’s Price Discovery Scheme, with Acwa Power as the preferred developer partner.

Energy storage systems

The scale of new conventional and renewable energy capacity being developed in the kingdom – some 3,500MW of solar PV and wind capacity is now online, with over 10,500MW under construction – has increased the urgency to build energy storage systems to balance the kingdom’s energy system and stabilise its grid.

SPPC has signalled plans to procure gigawatt-sized battery energy storage systems (bess) using an IPP model. The tendering process for the first bess IPP package is expected to begin by the year-end or early 2025.

In parallel, National Grid Saudi Arabia, an SEC subsidiary, has started awarding contracts to build energy storage systems capacity using an engineering, procurement and construction (EPC) model. The local Algihaz Holding is understood to have won the contracts to build four energy storage systems in Najran, Madaya and Khamis Mushait, which will have a total combined capacity of 7.8 gigawatt-hours (GWh).

Also in August, SEC tendered contracts for the construction of five battery energy storage systems with a total combined capacity of 2,500MW, or roughly 10GWh.

The planned facilities, each with a capacity of 500MW or roughly 2GWh, are located in or within the proximity of the following key cities and load centres:

  • Riyadh
  • Qaisumah
  • Dawadmi
  • Al-Jouf
  • Rabigh

Saudi Arabia’s plan to build its first large-scale nuclear power plant in Duwaiheen, which appeared to be making progress before October last year, has faced delays following shifting geopolitics involving stakeholders that include the US and Israel. The tender bid deadline for nuclear technology providers is understood to have been postponed and no new date has been set.

As it is, Saudi Arabia’s ever-expanding power projects pipeline, particularly for renewables and bess, will require investors, contractors and lenders to allocate sizeable resources, perhaps more than they have historically done in the past, over the next several years as various stakeholders endeavour to meet Vision 2030-tied peak demand scenarios.

This applies less to CCGT projects, which, pending a clear carbon-capture strategy from the offtaker or the Energy Ministry, appear to attract a decreasing number of developers and investors.

https://image.digitalinsightresearch.in/uploads/NewsArticle/12496716/main.jpg
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Oil tankers attacked in Iraqi waters

    12 March 2026

    Register for MEED’s 14-day trial access 

    Two tankers carrying Iraqi oil products were set on fire after being attacked in Iraq’s territorial waters near the country’s southern export terminals, increasing concerns about global energy supplies.

    After the attack, the country’s Oil Ministry said that it saw the attacks as “a worrying indicator of escalating tensions in a vital area of the global economy and energy supply”.

    It added that “the safety and safety of navigation in international sea corridors and energy supply routes should be kept away from regional conflicts”.

    The Oil Ministry said the attacks had a direct impact on the stability of the global economy and energy markets, as well as putting the lives of civilians and workers in the maritime transport sector at risk.

    Farhan Al-Fartousi, from Iraq’s General Company for Ports, told state television that one crew member had been killed in the attack and that 38 crew members had been rescued.

    Iraq’s state-owned oil marketing company Somo said that the Maltese-flagged oil tanker Zefyros was attacked as it was preparing to enter the port of Khor Al-Zoubair, where it would have taken on board an additional 30,000 tonnes of liquid naphtha.

    The second targeted vessel, Safesea Vishnu, was sailing under the Marshall Islands flag and was chartered by an Iraqi company, according to Somo.

    Iraq’s oil production has fallen steeply since the conflict began, from 3.3 million barrels a day (b/d) to less than 1 million b/d.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15951323/main.png
    Wil Crisp
  • Chevron yet to agree terms for Iraq oil field takeover

    12 March 2026

     

    US-based oil company Chevron is yet to agree terms with Iraqi state-owned Basra Oil Company (BOC) for its potential takeover of Iraq’s West Qurna-2 oil field, according to industry sources.

    Last month, Chevron signed a preliminary agreement with BOC to explore taking control of the West Qurna-2 oil field.

    Until recently, West Qurna-2 was operated by Russia’s Lukoil, which faces a 28 February deadline to divest its assets in Iraq under sanctions.

    One industry source said: “Chevron is yet to agree terms, and it has made it clear that it wants different terms to the contract that Lukoil had.”

    In January, Iraq’s cabinet approved temporarily nationalising petroleum operations at the West Qurna-2 oil field until a new operator was found.

    Lukoil declared force majeure at the West Qurna-2 oil field in November, after sanctions by the UK, EU and US were announced in October.

    The Russian company had a 75% stake in the asset.      

    Prior to Russia’s Lukoil declaring force majeure, Iraq’s state oil authorities froze all cash and crude payments to Lukoil in compliance with the sanctions.

    In a statement released on 1 December 2025, Iraq’s Oil Ministry said that it had extended “direct and exclusive invitations to a number of major American oil companies”.

    Awarded to Lukoil in 2009, West Qurna-2 lies about 65 kilometres northwest of Basra in southern Iraq and produces about 480,000 barrels a day (b/d) of oil, accounting for roughly 10% of the country’s total oil output.

    At the same meeting on 23 February, Chevron also signed a deal relating to the development of the Nasiriyah field, four exploration sites in the province of Dhi Qar and a field in the province of Salahaddin.

    Chevron signed an agreement in principle with Iraq in August 2025 to develop the Nasiriyah oil project in the province of Dhi Qar.

    At the time, Iraq said it expected the Nasiriyah project to reach a production capacity of 600,000 b/d within seven years.

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

    Riyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.

    Distributed to senior decision-makers in the region and around the world, the March 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15944830/main.png
    Wil Crisp
  • Egyptian/Saudi firms to invest $1.4bn in Cairo project

    12 March 2026

    Saudi Arabia’s Sumou Investment, through its subsidiary Adeer International, and Egyptian developer Paragon Developments have signed an agreement to jointly develop a mixed-use project in Mostakbal City, East Cairo.

    According to local media reports, the project will cover about 500,000 square metres and will be developed with a total investment of about $1.4bn.

    The project will be developed by Paragon-Adeer, a joint venture of Paragon Developments and Adeer International.

    The announcement follows a $1.4bn deal signed in July last year between Adeer International and another Egyptian developer, Midar, to jointly develop a mixed-use project in Mostakbal City.

    Midar, Sumou Investment and Hassan Allam Properties are partnering to develop $2bn in hospitality and leisure projects across several locations in Cairo within Midar-owned land parcels. 

    According to GlobalData, Egypt’s residential construction sector is expected to grow by 8.3% from 2026 to 2029, supported by investments in the housing sector and the government’s focus on addressing the country’s growing housing deficit amid a rising population.

    The commercial construction sector is expected to register real-term growth of 6.6% during 2026-29, supported by a rebound in tourism and hospitality markets and an improvement in investment in office buildings and wholesale and retail trade activities.

    MEED’s March 2026 report on Egypt includes:

    > COMMENT: Egypt’s crisis mode gives way to cautious revival
    > GOVERNMENT: Egypt adapts its foreign policy approach
    > ECONOMY & BANKING: Egypt nears return to economic stability
    > OIL & GAS: Egypt’s oil and gas sector shows bright spots
    > POWER & WATER: Egypt utility contracts hit $5bn decade peak
    > CONSTRUCTION: Coastal destinations are a boon to Egyptian construction

    To see previous issues of MEED Business Review, please click here

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15939746/main.jpg
    Yasir Iqbal
  • Qiddiya gives high-speed rail prequalifying firms more time

    12 March 2026

     

    Saudi Arabia’s Royal Commission for Riyadh City, in collaboration with Qiddiya Investment Company (QIC) and the National Centre for Privatisation & PPP, has set a new deadline of 16 April for firms to submit prequalification statements for the development of the Qiddiya high-speed rail project in Riyadh

    The prequalification notice was issued on 19 January, with an initial submission deadline of 17 March.

    The clients are considering delivering the project using either a public-private partnership (PPP) model or an engineering, procurement, construction and financing (EPCF) basis.

    Firms have been asked to prequalify for one of the two models.

    Last month, the clients invited interested firms to a project briefing session on 23 February at Qiddiya Entertainment City.

    The Qiddiya high-speed rail project will connect King Salman International airport and the King Abdullah Financial District (KAFD) in Riyadh with Qiddiya City.

    Also known as Q-Express, the railway line will operate at speeds of up to 250 kilometres an hour, reaching Qiddiya in 30 minutes.

    The line is expected to be developed in two phases. The first phase will connect Qiddiya with KAFD and King Khalid International airport.

    The second phase will start from a development known as the North Pole and travel to the New Murabba development, King Salman Park, central Riyadh and Industrial City in the south of Riyadh. 

    In November last year, MEED reported that more than 145 local and international companies had expressed interest in developing the project.

    These included 68 contracting companies, 23 design and project management consultants, 16 investment firms, 12 rail operators, 10 rolling stock providers and 16 other services firms.

    In November 2023, MEED reported that French consultant Egis had been appointed as the technical adviser for the project.

    UK-based consultancy Ernst & Young is acting as the transaction adviser on the project. Ashurst is the legal adviser.

    Qiddiya is one of Saudi Arabia’s five official gigaprojects and covers a total area of 376 square kilometres (sq km), with 223 sq km of developed land. 

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

    Riyadh urges private sector to take greater role; Chemical players look to spend rationally; Economic uptick lends confidence to Cairo’s reforms.

    Distributed to senior decision-makers in the region and around the world, the March 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15939059/main.gif
    Yasir Iqbal
  • Wynn resumes construction on Ras Al-Khaimah project

    12 March 2026

    Register for MEED’s 14-day trial access 

    US-based Wynn Resorts said on 11 March that site activity on its resort project on Ras Al-Khaimah’s Al-Marjan Island has restarted after work was temporarily halted. New measures are in place to ensure the safety and security of the workforce. 

    “Wynn employees have been offered the opportunity to work from abroad, if their home embassy recommends they do so,” the company added.

    The $5.1bn project involves the construction of an integrated resort with 1,500 rooms, high-end shopping, MICE venues and the UAE’s first confirmed gaming area. It is scheduled to open in spring 2027.

    The 70-floor 283-metre-tall main structure was topped out in December 2025.

    Financially, Wynn Resorts holds a 40% equity stake in the joint-venture development company alongside local partners Marjan and RAK Hospitality Holding. Wynn reported in late 2025 that about two-thirds of the project’s budget had already been spent or contractually committed, which provides a degree of protection against fluctuating material costs.

    In 2025, Wynn Resorts said it had secured a $2.4bn construction facility to finance the development of the project. In a statement at the time, Wynn said the financing is the largest hospitality financing transaction in UAE history. The loan, available to Wynn Al-Marjan Island FZ-LLC – a subsidiary of the 40%-owned joint venture – is denominated in both AED and US dollars.

    Structured as a delayed draw facility, the seven-year term loan offers competitive market interest rates and substantial financial flexibility for the joint-venture partners.

    The syndicate includes prominent regional and international banks, with Abu Dhabi Commercial Bank and Deutsche Bank serving as joint coordinators. The joint coordinators, along with First Abu Dhabi Bank, Emirates NBD Capital and the National Bank of Ras Al-Khaimah, acted as mandated lead arrangers, bookrunners and underwriters, and Sumitomo Mitsui Banking Corporation acted as lead arranger. First Abu Dhabi Bank is also the agent and security agent for the lenders.

    Dubai-based Alec was appointed as the project’s main contractor in 2023. Earlier in March, Alec said it had resumed on-site and in-office operations across its UAE projects from 4 March.

    In a statement, the company said that it is working closely with clients to ensure a prompt and safe return to full-scale activity.

    The move follows a temporary work-from-home policy introduced across the company’s UAE operations in response to ongoing events, as Alec Holdings reaffirmed its commitment to protecting its workforce while continuing to deliver in clients’ best interests.

    During the same period, the company said its operations in Saudi Arabia remained fully operational.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15952339/main.jpg
    Colin Foreman