Saudi power sector enters busiest year
10 March 2025

Contracts worth more than $90bn are under execution in Saudi Arabia’s power sector, making 2025 the busiest year ever for generation and transmission capacity buildout in the kingdom.
The construction of conventional and renewable power generation plants accounts for two-thirds, or 66%, of the contracts under execution, while transmission and distribution projects account for the rest, based on the latest available data from regional project tracker MEED Projects.
In addition to gas-fired and renewable energy generation plant projects, the kingdom has awarded several contracts in the past two years to modernise and expand its domestic grids in light of the solar photovoltaic (PV) and wind power plants, and industrial complexes, which are being built in remote areas – as well as Riyadh's plan to trade electricity beyond the kingdom's GCC partners and with countries such as Egypt.
In the past 12 months, the kingdom also awarded the first contracts to build on-grid battery energy storage system (bess) facilities, in line with fostering greater grid flexibility and countering the intermittency of renewable power.
“It has been a very, very busy year, despite some projects – particularly those catering to Neom – being re-scoped,” notes a Dubai-based senior executive with a transaction advisory firm.
The $500bn Neom gigaproject in southwestern Saudi Arabia aims to be powered 100% by renewable energy, which it initially expected to generate independently.
However, ongoing discussions are understood to include an option to meet future demand through renewable power sourced from the grid.
Overall, combined-cycle gas turbine (CCGT) projects – procured on either an independent power project (IPP) or engineering, procurement and construction (EPC) model – account for 56% of the total power generation contracts under execution in Saudi Arabia, with solar and wind accounting for the remaining 44%.
The principal buyer, Saudi Power Procurement Company (SPPC), awarded contracts for two pairs of CCGT plants – projects one and two of the Rumah and Nairiyah schemes – last year.
SPPC also signed the offtake agreements for four solar PV IPPs, which were tendered under the fifth round of the National Renewable Energy Programme (NREP). These were contracts for the 2GW Al-Sadawi, 1.25GW Al-Masaa, 500MW Al-Henakiyah 2 and 300MW Rabigh 2 solar IPPs.
An EPC contract for a high-voltage, direct current transmission network connecting the kingdom’s central and southern electricity grids was also one of the largest deals signed last year in the kingdom.
In the second half of 2024, the developer arm of Saudi Electricity Company (SEC) selected the preferred bidders for several greenfield CCGT expansion plants: Ghazlan 1 and 2, Riyadh PP12 and Marjan.
SEC subsidiary National Grid also awarded the second phase of its bess projects that are being procured on an EPC basis to local firm AlGihaz Holding last year. The three battery energy storage facilities, each with a capacity of 800MW, or about 2,600 megawatt-hours, are to be located in Najran, Khamis Mushait and Madaya.
The extent of work on hand is exerting pressure on contractor capacity, according to some experts.
"I think the Chinese EPC contractors are already at capacity, so SEC has started tapping Egyptian and Spanish EPC contractors," an industry source told MEED, referring to Tecnicas Reunidas, Orascom and Elsewedy, which are understood to have been selected last year to undertake the EPC contracts for several CCGT plants that SEC is developing.
South Korean EPC contractors are also executing several cogeneration and generation power plants in the kingdom.
Outlook
The need to expand, connect and stabilise the kingdom’s electricity grid will be a primary preoccupation for Saudi utility stakeholders in the short to medium term.
This is crucial given the large capacity of renewable energy power generation plants that are scheduled to come on stream, and as the kingdom deploys new gas-fired plants in line with its need to displace liquid fuel in some of its ageing fleet.
Oil fuel still accounted for 36% of Saudi Arabia's total electricity generation in 2023, at 422.9 terawatt-hours, according to the Energy Institute.
Data from MEED Projects suggests that at least $68bn-worth of power generation and transmission contracts are in the pre-execution phase as of March 2025.
Clean energy fuel-powered plants, using solar, wind, hydro and nuclear, dominate the $47bn-worth of planned power generation units, with thermal plants accounting for just 13% of the total.
This signals a shift to clean energy, despite the overall figure excluding a significant volume of renewable energy projects that are still in the concept stage. This is in line with a plan by the Energy Ministry to procure up to 20GW of renewable energy capacity annually until 2030, subject to demand growth.
Planned transmission and distribution projects, including several independent battery energy storage projects, together account for about $21bn of contracts that have yet to be awarded.
Local developers
Local companies are increasingly visible in the procurement proceedings for new power generation and transmission plants in the kingdom.
The decisions made by several European and Japanese developers to retreat from thermal power plant tenders that do not offer a clear carbon capture, utilisation and storage (CCUS) path – which would be necessary for them to meet their 2045 or 2050 net-zero targets – has contributed to this trend.
The exclusion of dominant utility developer Acwa Power in the prequalification process for the NREP’s fifth and sixth procurement rounds has also opened up opportunities for other international and local developers that are keen to win more contracts in Saudi Arabia.
Aljomaih Energy & Water, Ajlan & Brothers, Alfanar, Algihaz and SEC’s developer arm have been pursuing new contracts, usually in cooperation with an international developer.
Battery energy storage
Large-scale solar PV projects and limited wind capacity in the kingdom create a major market for battery energy storage going forwards.
Independent battery energy storage projects, in particular, offer neutral opportunities for both international and local developers, and are expected to attract more bidders compared to conventional thermal or standalone solar PV projects.
“We are definitely interested,” says a senior executive with a European utility developer, referring to the first phase of the kingdom’s independent storage provider (ISP) programme.
In addition to its net-zero merits, the ISPs will follow the same model as an IPP project, where the successful bidders will hold 100% equity in the special purpose vehicles set up to develop and operate the project.
While such strong interest is expected to benefit the principal buyer, which can expect to receive competitive prices from bidders, an over-competitive or crowded landscape could also be off-putting to developers and investors that are keen to maintain their internal rate of return, or which are shifting their global focus to other geographies.
“We prefer to wait and see,” one source tells MEED, indicating that their company does not intend to participate in upcoming battery tenders, not only in Saudi Arabia but also in other GCC states.
Exclusive from Meed
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Frontrunner emerges for Saudi Arabia’s GCC rail link design12 October 2026
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Houthi escalation targets Saudi airports12 October 2026
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Egypt and Saudi Arabia sign oil and gas deal12 October 2026
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JGC yet to return evacuated workers to Basra refinery12 October 2026
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Developers are preparing to submit bids for almost 1GW of standalone battery energy storage (bess) projects in Oman, a source close to the project has confirmed to MEED.
The independent power producer (IPP) scheme includes the installation of five bess facilities with a combined power capacity of 950MW and storage capacity of 3,800MWh. Nama Power & Water Procurement Company (PWP) is procuring it.
According to sources close to the project, a developer’s tender was floated in the summer. An initial bid submission deadline has since been extended, with bids expected to be submitted in the coming weeks.
The largest project is a 500MW facility in Sohar, Al-Batinah North governorate, with a storage capacity of 2,000MWh. The Sohar facility is expected to connect to the grid at 220kV. The site covers approximately 149,535 square metres.
Four further installations are planned at Al-Mabellah in Muscat governorate, Ayjah in South Al-Sharqiyah, the Jalan Bani Bu Ali wind farm site in South Al-Sharqiyah, and Sadah in Dhofar.
The Al-Mabellah and Ayjah facilities are each planned to have a capacity of 100MW and storage capacity of 400MWh. Both are expected to connect to the grid at 132kV.
The Jalan Bani Bu Ali installation is planned to have a capacity of 150MW and storage capacity of 600MWh. It is expected to connect to the Sadah wind farm and Jalan Bani Bu Ali wind farm substations.
The Sadah installation is planned to have a capacity of 100MW and storage capacity of 400MWh. It is expected to connect to the Sadah wind farm substations at 132kV.
US/India-based Synergy Consulting is the financial adviser for the procurement; Germany’s Fichtner is the technical adviser; and Germany-headquartered CMS is the legal adviser.
Utility-scale storage
In May, Oman’s Authority for Public Services Regulation (APSR) opened technical bids for a consultancy contract supporting a planned 1,000MW/four-hour bess project.
As previously reported, APSR issued the request for proposals in April as part of wider plans to increase the share of renewable energy in the sultanate.
The sultanate’s first utility-scale solar photovoltaic (PV) plant integrated with battery energy storage (Ibri 3) entered construction at the beginning of the year, comprising a 500MW solar PV plant and a 100MWh bess system.
Also in May, state offtaker Nama Power & Water Procurement Company signed a power purchase agreement with local firm O-Green for Oman’s first round-the-clock renewable energy project.
Renewable energy is expected to increase from 4% of the generation mix in 2024 to 30% by 2030, driving the push for more utility-scale storage projects.
Over roughly the same period, demand is forecast to double, reaching 10 terawatt-hours by 2031.
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Frontrunner emerges for Saudi Arabia’s GCC rail link design12 October 2026

French engineering firm Systra has emerged as the frontrunner to provide design consultancy services for the Saudi Arabian section of the GCC railway network, which is intended to link all six member states.
The tender covers the concept, preliminary and issued-for-construction design stages. Saudi Arabia Railways (SAR) requires the selected consultant to review, update and complete the existing preliminary design.
Consultants submitted proposals on 14 July, as MEED reported.
The consultants who submitted bids included:
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The tender was issued on 9 September, with a submission deadline of 18 October, as MEED exclusively reported.
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Construction will be tendered separately through competitive bidding once designs are approved.
The GCC railway will run for about 672km inside Saudi Arabia, linking the kingdom’s existing network to Kuwait, Qatar, the UAE and Bahrain, with four sections of about 141km, 200km, 151km and 21km, respectively.
The line is planned as a single-track, non-electrified corridor for mixed freight and passenger traffic, with a maximum axle load of 32.4 tonnes and passing loops for bidirectional working.
GCC railway line
Under the overall plan, the railway will run from Kuwait, pass through Dammam in Saudi Arabia, reach Bahrain via a planned causeway, and continue from Dammam to Qatar, the UAE and, ultimately, Muscat via Sohar in Oman. The railway is reported to cover about 2,186km in total.
The route length within each member state is as follows:
- UAE – 684km
- Saudi Arabia – 672km
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- Qatar – 283km
- Kuwait – 145km
- Bahrain – 36km
The railway is designed for passenger trains travelling at 220 kilometres an hour (km/h) and freight trains operating at 80km/h–120km/h.
With high levels of project activity, governments in spending mode and renewed cooperation under the Al-Ula Declaration, the latest efforts to restart the GCC railway project may make more progress than previous attempts. If completed, the railway could prove transformational for a region that is globally connected but still divided by national borders.
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Houthi escalation targets Saudi airports12 October 2026
Yemen’s Houthis have placed Saudi Arabia’s civil aviation infrastructure at the centre of their campaign against the kingdom. Two strikes on King Khalid International airport in Riyadh over the weekend killed 13 people and injured 320.
The deadlier attack hit a passenger terminal on the afternoon of 10 October. The General Authority of Civil Aviation (Gaca) said it killed 12 people, including four Saudi citizens, and injured 309. Airport operations were suspended pending a damage assessment.
A second strike hit Terminal 4 on the afternoon of 11 October, sparking a fire that killed a Pakistani resident and injured 11 others, according to Gaca. The Saudi-led coalition reported intercepting a cruise missile near the airport that afternoon. Gaca also reported an attack on King Fahd International airport in Dammam that evening, following a coalition report of a projectile falling near the facility the previous night.
The weekend strikes followed attacks on Abha International airport on 6 October and on King Khalid International airport on 7 and 8 October, the last of which included a strike on a Saudia aircraft. Gaca figures put the toll from the week’s attacks on Saudi airports at 19 dead and more than 350 injured.
The Houthis said they would continue operations inside the kingdom and that all Saudi airports were potential targets, with the exception of those serving the holy cities. The group says it is acting in response to Riyadh’s support for Yemeni government forces and a Saudi air strike on Sanaa airport. It has also claimed attacks on Saudi oil facilities, which Saudi authorities have not confirmed.
Aviation exposure
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Market reaction
The Saudi stock market’s response has been muted so far. The Tadawul main index fell 15.54 points to close at 10,360.74 on 11 October, the first trading session after the Saturday attack, with turnover of SR2.6bn ($693m). The session closed before the second strike on King Khalid International airport and the attack on Dammam, and Monday’s trading will be the first to reflect the full weekend.
The weekend also brought a separate maritime incident. UK Maritime Trade Operations said an oil tanker was struck by an unidentified projectile in the Strait of Hormuz on 11 October, with its crew reported safe.
Diplomatic response
The coalition described the 10 October attack as a war crime and said it would respond decisively. It said on 10 October that it had destroyed 136 military targets in Houthi-controlled areas and was working to dismantle the group’s ballistic missile network.
Egypt, Pakistan and Turkiye joined Saudi Arabia in an R4 group statement condemning the attacks and supporting measures taken by the kingdom in response. The Arab League also voiced its support for Saudi Arabia. On 11 October, Iran’s foreign minister spoke by telephone with his Saudi counterpart, Prince Faisal Bin Farhan, to discuss the escalation. The US and UK have also signalled the possibility of further support for the kingdom.
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Egypt and Saudi Arabia sign oil and gas deal12 October 2026
Egypt and Saudi Arabia have signed an agreement to strengthen cooperation in the oil, natural gas and petrochemicals sectors, according to a statement from Egypt’s Ministry of Petroleum & Mineral Resources.
The memorandum of understanding (MoU) was signed in Riyadh by Karim Badawi, Egypt’s minister of petroleum and mineral resources, and Abdulaziz Bin Salman, Saudi Arabia’s minister of energy.
Under the agreement, both sides will enhance cooperation in trading, transporting, storing and distributing crude oil, petroleum products and natural gas.
They will also expand cooperation on developing the infrastructure and logistics services that support these activities.
In its statement, Egypt’s Ministry of Petroleum & Mineral Resources said: “These efforts will contribute to improving energy market efficiency, enhancing the resilience and reliability of supply chains, and strengthening energy security.”
The MoU also provides for expanded cooperation in exchanging expertise and best practices in operating and developing fuel stations, as well as in transporting and tracking petroleum products and liquefied petroleum gas cylinders.
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JGC yet to return evacuated workers to Basra refinery12 October 2026

Japan’s JGC has yet to bring evacuated workers back to the Basra refinery project in Iraq, according to industry sources.
JGC evacuated its personnel from the site in the southern oil hub of Basra following the start of the regional conflict on 28 February, when the US and Israel attacked Iran.
The evacuation halted work on the project, which was in its final construction stage.
On 14 August 2026, Iraq’s Ministry of Oil announced that it had signed an agreement with JGC to resume work on the fluid catalytic cracking (FCC) project at Basra refinery.
One source said: “Even though the agreement to bring the evacuated workers back was signed about two months ago, there is still no sign of the evacuated workers on the project site.
“It is possible that they will return soon, but it is hard to tell what will happen next in the current security environment.”
Earlier this month, Iraq’s Ministry of Oil said it met with Japanese officials to discuss plans to commission the FCC unit under the Basra refinery upgrade project.
The statement did not say when the evacuated JGC workers would return to the project site.
Strategic project
Iraq’s state-owned South Refineries Company (SRC) sent JGC notice of the main contract award for the FCC package of the Basra refinery upgrade project in August 2020.
JGC was awarded the contract in consortium with South Korea’s Hyundai E&C.
The official contract signing ceremony was held in Baghdad on 1 October 2020.
The contract awarded to JGC, which uses the engineering, procurement, construction and commissioning model, was worth $3.78bn.
The FCC package is part of a broader project to upgrade the Basra refinery.
The project site is located about 12 kilometres east of Iraq’s southern city of Basra.
The wider upgrade project involves installing new facilities on land adjacent to the existing Basra refinery, including a vacuum distillation unit and a diesel desulphurisation unit.
In April 2021, France’s Axens won a contract in Iraq to provide four process technologies to SRC for the Basra refinery upgrade project.
The technologies that SRC selected are:
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In addition, Axens is providing catalysts and adsorbents, proprietary equipment, training and technical services.
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> CONSTRUCTION: Momentum builds in Iraq’s post-war construction sectorTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/20503212/main.png