meed-logo

line1 line2 line3
SIGN IN / REGISTER

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.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13466191/main.gif
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Momentum builds for Syrian projects

    25 May 2026

     

    Support from the US, as well as the closure of the Strait of Hormuz, has increased expectations about the development of infrastructure projects in Syria.

    On 22 May, the US published guides to investing in Syria, funded by the US Department of State, that pointed investors towards 590 planned projects in the country.

    The permanent removal of US sanctions in December last year, combined with fallout from the closure and disruption to shipping through the Strait of Hormuz, has boosted interest in planned projects in the country.

    Shipping through the Strait of Hormuz has been disrupted since the US and Israel attacked Iran on 28 February.

    The route normally transports about 11 million barrels a day of oil and around 20% of the world’s liquefied natural gas, as well as a range of other key materials and consumer goods.

    The disruption to shipping through the strait has left nations in the Middle East scrambling to find new routes for imports and exports – and Syria plays a role in many of these new plans.

    This has bolstered the country’s plans to become a regional trade hub.

    Energy corridors

    Already, Iraq is moving a large volume of oil by truck across the country to export it from Syria’s Mediterranean ports, such as Latakia or Tartous.

    In April, Iraq’s state-owned oil marketing company, Somo, said it had awarded contracts to supply about 650,000 metric tonnes of fuel oil per month for overland trucking across Syria.

    On top of this, Iraq is currently looking into reestablishing a pipeline route that transported oil from Kirkuk to the port of Baniyas in Syria.

    The pipeline originally went into operation in April 1952.

    During the 2003 invasion of Iraq, the pipeline was damaged by US air strikes and has remained out of operation since then.

    There have been repeated attempts to either refurbish the existing pipeline or build a new one along the same route, but none has been successful.

    In December 2007, Syria and Iraq agreed to rehabilitate the pipeline. The pipeline was to be reconstructed by Stroytransgaz, a subsidiary of Russia’s Gazprom.

    However, Stroytransgaz failed to start the rehabilitation, and the contract was nullified in April 2009.

    The disruption to shipping through the Strait of Hormuz has added a new urgency to the project to reestablish pipeline flows from Iraq to Baniyas.

    Syria could also play a role in plans for a pipeline to transport gas from Qatar to Europe via Syria and Turkiye.

    The country could additionally form part of plans to rehabilitate and expand the Arab Gas Pipeline.

    The pipeline connects Egypt, Jordan, Syria and Lebanon, although the Lebanese section is not currently operational.

    Trade routes

    Beyond oil and gas, Syria is emerging as a key part of other plans for new trade routes.

    Earlier this month, Syria’s Transport Minister Yarub Badr said the country was seeking to restore its role as a regional transit corridor linking Europe and the Gulf by reviving cross-border trucking and rehabilitating railway connections with neighbouring countries.

    He said the overland corridor between the Turkish and Jordanian borders handled between 100,000 and 115,000 trucks annually in both directions before 2011. Freight rail services also operated between Tartous port and Iraq’s Umm Qasr port via Baghdad in 2009, he added.

    He said Syria was coordinating with Turkiye, Jordan and Saudi Arabia to simplify customs and border-crossing procedures and facilitate freight movement.

    Railway rehabilitation is expected to take longer due to extensive infrastructure damage and the suspension of cross-border rail links over the past decade.

    Badr said Syria is working with the World Bank to secure grants ranging between $65m and $200m to support railway rehabilitation and restore Syria’s role as a regional transit route linking Turkiye, Syria, Jordan and Iraq.

    Earlier this month, Syria’s state-owned railway company, the General Establishment for Syrian Railways, and the operator of Syria’s Latakia International Container Terminal signed a memorandum of understanding to coordinate container traffic between the Mediterranean port of Latakia and inland freight hubs.

    The framework covers feasibility studies for moving containers by rail from Latakia to dry ports in Adra, Hasiya and Aleppo.

    The feasibility studies are expected to take four months to complete.

    Tartous port

    Also this month, executives from the UAE’s DP World and Syria’s General Authority for Borders and Customs (GABC) met to discuss accelerating the development of Syria’s Port of Tartous.

    Essa Kazim, chairman of DP World, met with Qutaiba Ahmed Badawi, chairman of GABC, to discuss opportunities to enhance infrastructure and logistics efficiency, ensuring the Port of Tartous is well-equipped to handle the anticipated rise in trade and cargo volume.

    DP World’s plans to develop the Port of Tartous form part of a 30-year concession agreement signed in July 2025 with the Syrian government.

    Under the agreement, DP World committed to invest $800m to upgrade infrastructure, expand capacity, and introduce modern cargo-handling and advanced digital systems.

    DP World has said that, by fast-tracking the development of the Port of Tartous, it aims to boost its operational efficiency and capacity to handle diverse cargo types, including general cargo, containers, breakbulk and roll-on/roll-off traffic.

    Rizwan Soomar, DP World’s chief executive and managing director for Central Asia, the Levant and Egypt, said: “The Port of Tartous development marks a defining moment in Syria’s journey of economic recovery and modernisation of its trade infrastructure. We are proud to contribute to this vital phase of growth.”

    Located on Syria’s Mediterranean coast, the Port of Tartus is the country’s second-largest port and a key maritime gateway to trade routes across Europe, the Levant and North Africa.

    Beyond the port itself, DP World is exploring other opportunities to develop infrastructure in Syria with local stakeholders. These include logistics zones, inland freight hubs and transit corridors.

    US interest

    US-based companies are also showing significant interest in participating in new projects in the country.

    On 19 May, a delegation from the Houston-headquartered engineering company KBR travelled to Damascus to discuss road networks and infrastructure projects in Syria.

    During one meeting, Syria’s transport minister outlined strategic projects currently underway, including north-south and east-west corridor projects, the Damascus-Aleppo highway and railway initiatives.

    Badr said that companies were needed to update economic and technical studies for some projects.

    While Syria and the US both have bold ambitions to expand Syria into a regional trade and logistics hub, the poor state of the country’s infrastructure is likely to be a key challenge.

    It is likely that billions of dollars will need to be invested to rehabilitate the country so that its capacity to transport goods returns to levels seen prior to the civil war that began in March 2011.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16975219/main.jpg
    Wil Crisp
  • Alec confirms Sphere Abu Dhabi contract award

    25 May 2026

    Alec Holdings has confirmed that its subsidiary Alec Engineering & Contracting has received a letter of award for the construction contract for the $1.7bn Sphere Abu Dhabi project.

    MEED had previously reported that Alec was the selected contractor and had been working on the project during the pre-construction phase. The construction is due to be completed in the third quarter of the financial year 2029.

    Abu Dhabi’s Department of Culture & Tourism (DCT Abu Dhabi) and US-based Sphere Entertainment announced earlier in May that they have selected Yas Island as the location for the project.

    The venue will be built on a plot between Yas Mall and SeaWorld Abu Dhabi, close to Yas Island’s theme parks and attractions. The project will be the first Sphere venue outside the US. It is expected to echo the scale of Sphere Las Vegas, with a capacity of up to 20,000 depending on configuration.

    DCT and Sphere Entertainment finalised an agreement last year for the construction, development and operation of the Sphere entertainment venue in Abu Dhabi. According to the agreement, Sphere Entertainment granted DCT the exclusive rights to build and operate the Sphere Abu Dhabi entertainment venue.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16973522/main.jpg
    Colin Foreman
  • Expo Riyadh tenders Saudi Arabia pavilion

    22 May 2026

     

    Expo 2030 Riyadh Company (ERC), tasked with delivering the Expo 2030 Riyadh venue, has tendered a contract to build the Saudi Arabia pavilion at the site.

    The tender was issued on 19 May, with a bid submission deadline of 26 August.

    The pavilion is a major asset located within the KSA District on the eastern side of the Expo 2030 Riyadh masterplan, within the Loop of Nations district.

    The tendering of the pavilion structure follows swift progress on the site’s infrastructure development works.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covers the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners. That scope covers about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communication systems, and electric vehicle charging stations.

    The overall infrastructure works – covering the construction of main utilities and civil works at Expo 2030 Riyadh – are split into three packages:

    • Lot 1 covers the main utilities corridor
    • Lot 2 includes the northern cluster of the nature corridor
    • Lot 3 comprises the southern cluster of the nature corridor 

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport, and will provide direct access to various landmarks within Riyadh.

    The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, launched ERC – a wholly owned subsidiary – in June last year to build and operate facilities for Expo 2030.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16949696/main.jpg
    Yasir Iqbal
  • Consultant wins Jeddah metro design

    22 May 2026

     

    French engineering firm Egis has been appointed to undertake the preliminary design consultancy for the Jeddah Metro Blue Line project.

    The project client, Jeddah Development Authority, issued the tender in early January, when MEED exclusively reported that Saudi Arabia had restarted plans to build the Jeddah Metro.

    Engineering consulting firms submitted bids in April, as MEED reported.

    The Blue Line will run from King Abdulaziz International airport and connect to the Haramain high-speed railway station.

    The line will be 35 kilometres (km) long and will include 15 stations.

    Project history

    Plans for the Jeddah Metro were first publicly floated in the early 2010s and were formally packaged into a wider Jeddah public transport programme around 2013-14.

    In 2014, French engineering firm Systra was appointed to complete preliminary engineering for the Jeddah Metro, as MEED reported at the time.

    In the same year, US-based engineering firm Aecom was awarded a SR276m ($74m) contract to provide pre-programme management consultancy services.

    Under its 18-month contract, Aecom was expected to provide staff to support preliminary planning and design work for various phases of the metro project.

    This was followed by the appointment of UK-based architectural firm Foster + Partners in 2015 to design the metro stations.

    The project then stalled as government spending priorities were reset and major capital programmes were reviewed following the fall in oil prices in 2015, with the metro’s scope, cost and delivery model coming under reassessment.

    Early concept designs envisaged a multi-line network integrated with buses and, later, other city-wide mobility upgrades.

    Route details

    According to Jeddah Transport Company’s website, the scheme comprises 81 stations and 197 trains serving more than 161km. The network will have four lines:

    • Orange Line: a 44.8km line running along Al-Madinah Road and Old Makkah Road, with 29 stops including one at Obhur Bridge
    • Blue Line: a 35km line running from King Abdulaziz International airport to the Haramain high-speed railway station, with 15 stations
    • Green Line: a 17km line running through the city centre, from the downtown area to the Haramain railway station, with nine stops
    • Red Line: A 59.7km line running from King Abdullah Stadium north to Old Makkah Street through King Abdulaziz Road and King Abdullah Road, with 25 stops

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16949416/main.jpg
    Yasir Iqbal
  • Egypt signs gas deal with QatarEnergy and Exxon Mobil

    22 May 2026

    Egypt’s Ministry of Petroleum & Mineral Resources has signed a preliminary gas agreement with state-owned QatarEnergy and US-based Exxon Mobil.

    The memorandum of understanding (MoU) focuses on cooperation in the development of natural gas discoveries in Cyprus.

    The plan involves transporting gas from offshore discoveries in Cypriot waters to Egypt via pipelines.

    In a statement, Egypt’s Ministry of Petroleum & Mineral Resources said that the deal would strengthen the North African country’s status as a regional hub for natural gas trading.

    The agreement was witnessed by Egypt’s Prime Minister Mustafa Madbouli.

    It was signed by Muhammad Al-Bajouri, from the legal affairs department of the Ministry of Petroleum & Minerals, and Kanan Nariman, vice-president for the development of liquefied natural gas (LNG) at Exxon Mobil.

    It was also signed by Ali Immunae, director of international exploration and production at QatarEnergy.

    Commenting on the MoU signing, Saad Sherida Al-Kaabi, the minister of state for energy affairs, and president and chief executive of QatarEnergy, said: “This MoU represents an important step in advancing regional energy cooperation across the Eastern Mediterranean through unlocking the long-term commercial potential of natural gas resources across that region.”

    Egypt’s Ministry of Petroleum & Mineral Resources said the agreement paved the way for QatarEnergy and Exxon to take advantage of existing Egyptian infrastructure in the gas sector, especially the country’s existing LNG export terminals.

    Under the terms of the agreement, a study will be conducted to analyse the feasibility of linking the gas discoveries in Cyprus to Egypt’s gas facilities.

    The signatories will also establish a commercial framework aimed at achieving “the maximum possible benefit from natural gas resources in both Egypt and Cyprus”.

    Egypt’s Minister of Oil and Gas Karim Badawi said the ministry has been working with ExxonMobil to explore cooperation on the development of gas discoveries in Cyprus.

    He said the partnership with Egypt would help QatarEnergy and Exxon reduce the cost of developing the discoveries while allowing Egypt to achieve an economic return.

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

    Global 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:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16944918/main.jpg
    Wil Crisp