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.

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Jennifer Aguinaldo
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    The package forms part of a wider Saudi Aramco project to boost gas compression capacity at the Shedgum and Uthmaniyah processing plants in the Eastern Province.

    The Shedgum and Uthmaniyah plants currently receive about 870 million cubic feet a day (cf/d) and 1.2 billion cf/d of Khuff raw gas, respectively. Through the multibillion-dollar project, Aramco aims to increase the compression and processing capacity of both plants, as well as build new pipelines to enhance gas transportation.

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    The value of the contract won by SNSH is estimated at $1.24bn, sources previously told MEED. Separately, Milan-headquartered Saipem said its share of the contract is €900m ($1.04bn) and that the EPC works will run for 42 months.

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    The contract for the Uthmaniyah gas compression plant package is the first EPC project awarded under Aramco’s National EPC Champion programme, Euronext Milan-listed Saipem said.

    Shedgum and Uthmaniyah gas compression project

    The Uthmaniyah gas compression plant contract is one of nine EPC packages under the broader Shedgum and Uthmaniyah gas compression project. The packages are:

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    Meanwhile, Khobar-based Arkad Engineering & Construction has emerged as the lowest bidder for package 3 (Shedgum gas compression pipelines), with Aramco expected to award the contract in June, according to sources.

    Contractors submitted bids for packages of the Shedgum and Uthmaniya gas compression capacity expansion project in January, MEED previously reported.

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    Aramco subsequently issued the tenders for the EPC packages of the scheme during the second quarter of last year and set an initial bid submission deadline of 17 August.

    Aramco then extended the bid submission deadline to 17 November7 December, and then to January, according to sources.

    In line with its aim of increasing gas production and processing capacity by 80% by 2030, with 2021 as its baseline, Aramco is investing significant capital in gas projects in the kingdom.

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    Al-Khafji Joint Operations (KJO) has selected contractors for two major offshore packages under its multibillion-dollar Dorra field facilities development project. The Dorra gas field is located in the waters of the Saudi-Kuwait Neutral Zone.

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    Commercial operations are expected to begin in the third quarter of 2027. The JBB project is EDF Power Solutions’ first wind project in Oman.

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    China State Construction Engineering Corporation recently signed a contract for Kuwait’s North Kabd wastewater treatment plant, the country’s largest wastewater infrastructure project to date.

    The award, following more than a decade of planning, propelled Kuwait’s water sector contract awards to more than $4bn as of early August, according to regional project tracker MEED Projects.

    The facility will have a treatment capacity of up to 1 million cubic metres a day (cm/d), with the $3.3bn contract covering the design, construction, operation and maintenance of the plant over a 10-year period.

    It marks a significant recovery for the sector after several years of subdued activity and the first time since 2020 that annual water awards have exceeded $1bn.

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    These include a $316m contract awarded to local firm United Gulf Construction (UGC) by the Ministry of Electricity, Water & Renewable Energy (MEWRE) for the rehabilitation and expansion of the Doha water distribution complex.

    The five-year project includes a new pump station and will add about 130 million imperial gallons of storage capacity, while increasing pumping capacity to 220 million imperial gallons a day (MIGD).

    UGC was also selected in February to upgrade the Hawally water distribution complex in Kuwait’s Hawalli Governorate. The facility serves one of Kuwait’s most densely populated governorates, with the project intended to address chronic low water pressure, particularly during peak summer demand, and improve continuity of supply.

    The upgrade will increase freshwater storage capacity by 66 million gallons and raise potable-water pumping capacity to 54.5 million gallons a day.

    In April, Kuwait’s Central Agency for Public Tenders approved MEWRE’s recommendation to award a $371m contract for phase two of the Doha seawater reverse osmosis (SWRO) desalination plant.

    A joint venture of Kuwait-based Heavy Engineering Industries & Shipbuilding Company (Heisco) and India’s VA Tech Wabag will carry out the project, which will have a capacity of about 272,000 cm/d.

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    Meanwhile, Kuwait’s Ministry of Public Works (MPW) has been progressing several tenders for major water infrastructure projects covering rainwater drainage and treated water systems in the country’s southern and northern regions.

    In July, local Combined Group Contracting submitted the lowest bid for a contract to develop a major treated water system in the southern region. The contractor submitted a price of about $515m for the scheme, according to a company disclosure.

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    Kuwait’s power sector recorded just $271m of contract awards by early August, according to MEED Projects, putting activity well below recent annual levels.

    This compares with a record full-year total of $5.5bn in 2025 and $2.7bn in both 2024 and 2023.

    Several large-scale generation projects have been slow to advance, with deadline extensions a notable feature in recent months. The outlook is stronger, however, with these projects now progressing through procurement and significant awards expected in the months ahead.

    Kuwait is advancing the 1,800MW Al-Khairan phase one independent water and power project (IWPP), for which two developer consortiums led by Abu Dhabi National Energy Company (Taqa) and Saudi Arabia’s Acwa submitted bids in June.

    The project will also include a desalination plant with a capacity of 125 MIGD. A second phase of the Al-Khairan IWPP, estimated at $750m, is understood to include a further 1,800MW of generation capacity through a combined-cycle gas-fired power plant. The project remains in the early development stages, with tendering not expected until at least 2027.

    Renewable energy programme

    The Kuwait Authority for Partnership Projects (Kapp) is also progressing the Al-Dibdibah power and Al-Shagaya renewable energy programme in partnership with Kuwait’s MEWRE.

    The contract to develop the 1,100MW phase three, zone one solar photovoltaic (PV) project is expected to be confirmed soon, with a consortium led by Abu Dhabi Future Energy Company (Masdar) previously reported to be the frontrunner.

    A separate 500MW solar PV project is also being procured under phase three, zone two of the same programme, with bids submitted on 26 July. If the contract is awarded by the end of the year, the two Shagaya contracts would add about $2bn to the value of power sector awards.  

    Another notable development was the 25-year energy conversion and water purchase agreement signed in February for the Al-Zour North IWPP phases two and three. The signing marked a key step towards financial close on the estimated $4bn project. Once completed, the facility will add 2,700MW of power and 120 MIGD of desalinated water to Kuwait’s supply network

    The Shagaya, Khairan and Zour North projects form a key part of Kuwait’s generation portfolio. The country is aiming to reach 22,100MW of installed renewable energy capacity by 2030, under a 20-year strategy announced in March 2025 that extends to 2050.

    Kuwait is also continuing to invest in existing generation plants. MEWRE is evaluating bids for the $1.7bn upgrade of the Subiya power and water plant, including the conversion of units from open-cycle to combined-cycle operation and the modernisation of existing facilities.

    Battery energy storage systems

    In the near to medium term, more than $10bn-worth of power projects are under bid evaluation. This includes several battery energy storage system projects with a planned total storage capacity of 1.5GW.

    In June, Kuwait approved sites in Al-Mutlaa and Jaber Al-Ahmad cities for the development of the projects. The projects will be implemented in phases, with the first phase providing 500MW of storage capacity. The first facilities are expected to be operational by summer 2027 and will supply stored energy to the electricity grid during periods of peak demand.

    Elsewhere, MEWRE continues to evaluate offers from Shanghai Electric Group and local firm Heavy Engineering Industries & Shipbuilding Company (Heisco) for the estimated $400m engineering, procurement and construction contract to rehabilitate and modernise eight boilers at the Subiya power generation and water distillation station. The bid bond validity has been extended to 23 August, indicating that the procurement process remains ongoing.


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    > OIL & GAS: Regional war to have lasting impact on Kuwaiti oil sector
    > CONSTRUCTION: Kuwait construction holds up despite regional strife

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  • Syrian court gives death penalty to Bashar Al-Assad

    11 August 2026

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    A Syrian court has sentenced former president Bashar Al-Assad to death after trying him in absentia, convicting him of crimes committed during the country’s nearly 14 years of civil war.

    It is the first such ruling under Syria’s transitional authorities, who ousted Al-Assad in December 2024 and vowed justice and accountability for crimes committed under his rule.

    Al-Assad fled to Moscow as Islamist-led forces closed in on Damascus after a lightning offensive.

    In a Damascus court, Judge Fakhr Al-Din Al-Aryan convicted Al-Assad of crimes including “premeditated murder, the intentional killing of more than one person, the intentional killing of children under 15 years … torture, torture leading to death, and deprivation of liberty on multiple occasions” — acts the court classified as crimes against humanity and war crimes.

    “He is therefore sentenced to death,” the judge said in his ruling.

    The court also sentenced six former military and security officials to death in absentia, including Al-Assad’s brother Maher, who ran the army’s elite Fourth Division and also fled the country.

    Those convicted included former defence minister Fahd Al-Freij and Louay Al-Ali, who headed military intelligence in Daraa province in 2011.

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    The officials were convicted of crimes including murder, incitement to murder, torture leading to death and repeated deprivation of liberty, also classified as crimes against humanity and war crimes.

    Former security official Atif Najib – the only defendant tried in person – was also sentenced to death for crimes against humanity committed while he headed political security in Daraa province, the cradle of the country’s 2011 uprising.

    Najib, a cousin of Al-Assad who was arrested in January last year, was convicted of crimes including murder, the intentional killing of children under 15 and torture leading to death.

    The acts attributed to him are “crimes against humanity”, the court said as it handed down “the harshest punishment … which is the death penalty”.

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    Syria began proceedings in April against Al-Assad and other officials, accused both in person and in absentia of atrocities during the civil war, which erupted after the former authorities’ brutal repression of pro-democracy protesters.

    More than half a million people were killed and millions displaced, while tens of thousands disappeared, many into the country’s brutal prison system.

    The uprising began in Daraa in March 2011 after 15 students were arrested for allegedly writing anti-government slogans on the city’s walls.

    Residents said the students were tortured, prompting protests demanding their release that ended in bloodshed.

    Security forces suppressed demonstrations and fired live ammunition to disperse sit-ins at several locations.

    Najib was dismissed after the crackdown as protests spread to other provinces.

    Judge Al-Aryan said Najib had denied the charges and shown “no remorse”.

    Al-Assad took power in Syria in 2000 in an unopposed election following the death of his father, Hafez Al-Assad, who was president from 1971.

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    MEED Editorial