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Saudi nuclear move has geopolitical significance

28 February 2023

Commentary

Jennifer Aguinaldo

Energy & technology editor

Saudi Arabia's Finance Ministry’s disclosure that it received bids late last year for the contract to build the kingdom's first nuclear power plant is major energy news with potential widespread geopolitical significance.

The bids came in weeks before Foreign Affairs Minister Prince Faisal bin Farhan al-Saud told a security conference in Munich that he could not rule out a regional nuclear arms race.

“If one state gets nuclear weapons, especially one that has expressed aggression towards its neighbours, I think everyone will start thinking about how to protect themselves,” Prince Faisal said in reference to Iran’s programme and the need for negotiations between Tehran and world powers to resume.

READ: Top nuclear projects to watch this year

Assuming the bids are for the large-scale nuclear power plant that Riyadh has been planning for since 2016, the list of companies that submitted a bid for the contract is tightly guarded.

Five companies were understood to have requested information on the project from King Abdullah City for Atomic & Renewable Energy (KA-Care) in 2017, including the US firm Westinghouse, France’s EDF and Russia’s Rosatom. South Korea’s Kepco and China National Nuclear Corporation also responded to the request for qualifications for the main contract. 

More recent, unconfirmed developments suggest that Westinghouse and possibly EDF may no longer be in the race, leaving three companies at the table.

Washington worried

Washington is wary of the contract being awarded to Chinese or Russian contractors. This would weaken or render irrelevant its demands for Riyadh to abandon its nuclear fuel cycle ambitions before signing any bilateral nuclear cooperation agreement (NCA), otherwise known in Washington as a 123 agreement.

According to an Energy Intelligence report, the stalemate centres around Washington’s demands for Saudi Arabia to make a commitment to the NCA not to pursue a domestic uranium enrichment or reprocessing programme. The US also wants the kingdom to sign and ratify the International Atomic Energy Agency’s Additional Protocol (IAEA AP), allowing nuclear inspectors fuller access to Saudi's nuclear programme.

The report alludes to the US supporting Kepco’s bid, not only to keep Riyadh away from its geopolitical adversaries but because it provides Washington with a final lever for pressuring Riyadh to accept its conditions for the 123 agreement and/or the IAEA protocol.

The topic was understood to be a key item on US President Joe Biden’s agenda during his trip to Riyadh in July, which yielded unclear results.

Crucially, Saudi Energy Minister Prince Abdulaziz bin Salman al-Saud announced in January last year that Saudi Arabia has uranium resources that it wants to exploit transparently through partnerships.

UAE role

Some say that the UAE – whose Barakah nuclear power plant was built by Kepco and which has signed a 123 agreement with the US – is backing the South Korean firm’s bid.

Tellingly in November, the US and UAE governments signed the $100bn Partnership for Accelerating Clean Energy (Pace) programme. Analysts say this could shift the two countries’ energy cooperation more towards nuclear energy, with the UAE aiming to position itself as an investor in regional and developing economies’ nuclear power.

Then in January, the UAE pledged to invest $30bn in South Korea’s nuclear power, defence, hydrogen and solar energy industries. They also announced plans to deepen their nuclear cooperation with Korea Hydro & Nuclear Power (KHNP) and Emirates Nuclear Energy Corporation (Enec) signing a deal to “expand practical cooperation in the field of developing export markets for nuclear power plants in third countries and joint procurement of business finance”.

As industry insiders speculate on what will happen next, all eyes will be on Riyadh to see if it makes an official announcement to award the contract, which a Saudi-based expert says can only be made by the highest levels of the country’s leadership.

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Jennifer Aguinaldo

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    In April, PIF’s board, chaired by Crown Prince Mohammed Bin Salman Al-Saud, approved a new five-year strategy structured around three portfolios, the Vision Portfolio, the Strategic Portfolio and the Financial Portfolio, and organised around six domestic ecosystems: tourism, travel and entertainment; urban development and liveability; advanced manufacturing and innovation; industrials and logistics; clean energy, water and renewables infrastructure; and Neom as a standalone ecosystem.

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    The strategy followed a period of reprioritisation across PIF’s gigaproject portfolio and set out a renewed emphasis on private capital, with PIF stating it would “further enable the role of the private sector as an effective partner for sustainable economic development”.

    PIF’s consolidated profit for 2025 rose to SR65.2bn ($17.4bn) in 2025, up 152% from SR25.8bn in 2024. The increase was driven by operating profit more than doubling, to SR78bn from SR34.7bn, as revenue growth outpaced cost of revenue and general and administrative expenses moderated relative to the prior year. Profit attributable to the owner of the fund rose to SR46.4bn, up from just SR1bn in 2024, a swing that accounts for most of the year-on-year improvement.

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    The segment breakdown shows where that growth came from, and it lines up closely with the six ecosystems named in the 2026-30 strategy. Banking and financial services remained the largest single revenue line at SR85.3bn, followed by telecommunications at SR76.8bn ($20.5bn), which was down slightly on 2024. Mining revenue rose 19.3% to SR38.8bn, consistent with the strategy’s focus on industrials and logistics, while revenue from electronic gaming and related services held broadly flat at SR15.6bn, an area PIF governor Yasir Al-Rumayyan specifically cited as a sector for strategic investment alongside artificial intelligence and renewable energy. Agricultural and livestock revenue nearly tripled, to SR7.6bn from SR2.5bn, and revenue from events operations rose to SR7.6bn from SR6bn, both pointing to the diversification into domestic ecosystems the strategy describes. Real estate operations revenue and revenue from advanced electronics and aerospace both declined slightly year-on-year.

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    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
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