meed-logo

line1 line2 line3
SIGN IN / REGISTER

Soaring data demand drives boom

29 May 2023

 

> This package also includes: Region plans vital big grid connections
Power links carry economic, climate and political significance

The world’s longest submarine communications cable system reached its first two landing sites in Jeddah and Yanbu in Saudi Arabia in early May.

The 45,000-kilometre 2Africa cable system will arrive at its third landing site in Duba, Saudi Arabia, later this year and its fourth site in Al-Khobar in 2024. 2Africa will take the number of submarine cable system landing sites in Saudi Arabia to 27, with 13 located in the Red Sea port city of Jeddah.

An expansion in submarine cable landing sites supports the kingdom’s ambition – and that of the broader Middle East and North Africa (Mena) region – to become a global digital hub.

The submarine cables enable high-speed, low-latency connectivity between regions and facilitate the transfer of vast amounts of data across national borders. They can help to unlock significant economic potential arising from products and services enabled by information technology (IT) and data connectivity, including e-commerce, machine learning, Big Data and artificial intelligence (AI).


Source: Telegeography

This will be supported by the strategic geographical advantage of Middle East countries to connect the digital traffic and services between Asia, Africa and Europe – a development that is being mirrored by the planned long-distance power interconnectors across the region.

“Subsea cables provide faster and more dependable internet access than older methods such as satellite or microwave communications,” says Ziad Samaha, an executive with UAE-based Khazna Data Centres.

Driving investment

Kamel al-Tawil, managing director for Mena at US-headquartered firm Equinix, also notes that the increased connectivity provided by subsea cables “can help attract more international businesses to the region, driving economic growth and creating new opportunities for the data centre and wider IT industry”.

The largest telecommunications companies and their data subsidiaries have been building data centres to support their operations and clients’ requirements in recent years.

The explosive growth in data and the advent of cloud services – or renting software applications as opposed to buying licences to use them – in addition to general uncertainty about regulations governing data sovereignty in most jurisdictions, have propelled the region into a data centre-building boom.  

This began when US-based Amazon Web Services (AWS) established its first availability zone or data centre cluster in Bahrain in 2019. AWS has since built availability zones in the UAE, with further plans to invest $5bn over 15 years to enhance its data infrastructure in the country.

The scale of Saudi Arabia’s ambition to become a digital hub has been met with commitments to build data infrastructure within the kingdom. Chinese telecoms giant Huawei is investing $400m to build a cloud services infrastructure, while Silicon Valley giants Microsoft and Oracle have committed to investing $2.1bn and $1.5bn, respectively, in the kingdom.

“The demand for data centre services in the region is growing rapidly, and continued investment in digital infrastructure will be critical to supporting the region’s long-term growth and development,” says Al-Tawil.

Regionally headquartered firms are determined to corner a significant piece of the data centre market, which is forecast to grow by a compounded average of 7.59 per cent annually between 2022 and 2028, thanks to strong demand from industries such as finance, healthcare and telecommunications.

Emboldened by its merger with Injazat Data Systems and the backing of both Abu Dhabi-headquartered G42 and its shareholder Mubadala Investment Company, Khazna Data Centre Services is expanding its UAE data centre capacity.

It has also announced a plan to enter the Egyptian market with a planned $250m investment in a 25MW data centre facility at the Maadi Technology Park in Cairo. A further phase could see Khazna doubling the facility’s capacity to 50MW, enabling it to achieve hyperscale status, comparable to the largest data centre facilities in the region and around the globe.

The explosive growth in data has propelled the region into a data centre building boom

Digital transformation

With a young and tech-savvy population, rising internet penetration and greater adoption of cloud-based technologies, Middle East governments have also been actively promoting digital transformation.

This has led to the development of large data centres that provide connectivity and data exchange services for businesses and organisations worldwide.

“Given this growth trajectory, the region is projected to require ongoing investment in data centre capacity,” says Samaha.

The specific amount of necessary investment will be contingent on various factors, including the rate of technological innovation, the level of demand from businesses and consumers, and the regulatory environment.

AI-powered data

“The rapid growth of data generation fuelled by AI has transformed how data is stored, processed, managed and transferred while increasing the demand for computing power across cloud and edge data centres,” says Samaha.

Equinix’s Al-Tawil agrees, noting that AI technologies, particularly machine learning, rely on large volumes of data for training models. His company is investing in data centres as well as in a dedicated fibre optic gateway connecting two facilities in Muscat and Dubai.

“As the adoption of AI continues to accelerate, there will be a surge in demand for data storage and processing. This growth in data generation … will require enterprises to invest in scalable and high-performance infrastructure to meet these demands effectively,” the executive concludes.

Region plans vital big grid connections

https://image.digitalinsightresearch.in/uploads/NewsArticle/10848743/main1605.jpg
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Saudi Arabia battery storage awards provide fresh lift

    24 August 2026

    Commentary
    Mark Dowdall
    Power & water editor

    The latest battery storage awards provide a welcome injection of investment into Saudi Arabia’s power market, which has seen a sharp slowdown in contract awards this year.

    Saudi Power Procurement Company’s four Group 1 storage service agreements, announced last week, are worth more than $1.16bn and cover 2,000MW of capacity.

    That is significant against the wider market. According to regional project tracker MEED Projects, Saudi Arabia recorded $19.7bn in power sector contract awards in the first seven months of 2025, compared with just $2.5bn in new awards in the same period this year.

    The battery energy storage system (bess) awards therefore account for a sizeable share of the activity recorded so far this year and provide a much-needed source of new contracting activity.

    Importantly, this is not a one-off. SPPC issued the request for proposal (RFP) for its second group of bess projects in July, covering six projects with a combined capacity of 3,000MW and 12,000MWh.

    With the Group 1 tender taking around 18 months from RFP to contract award, it is reasonable to expect Group 2 contracts to be signed in 2027.

    At the same time, the awards for six independent renewable plants under Round 7 of Saudi Arabia’s National Renewable Energy Programme (NREP), with a combined capacity of 5,300MW, are also likely to move into next year, with the latest bid deadlines now extending into September.

    Although a substantial pipeline remains in procurement, it is only once these projects move from tender to award and into construction that this pipeline translates into market activity.

    It is important that these tenders continue to progress at the pace established by the early rounds of Saudi Arabia’s renewable energy programme and now also SPPC’s independent storage provider bess scheme.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962923/main.jpg
    Mark Dowdall
  • Qatar receives bids for major power grid expansion

    24 August 2026

     

    Qatar General Electricity & Water Corporation (Kahramaa) has received bids for several packages under a major power transmission expansion project tendered in April.

    The project covers new substations at multiple voltage levels, as well as the supply and installation of 400kV extra-high-voltage power cables. The overall scheme is estimated to cost $650m.

    It is being tendered as part of Kahramaa’s 2026 procurement plan, which includes 198 tenders with a total estimated value of QR21.4bn ($5.9bn).

    According to sources, bids were submitted for the following packages on 20 August:

    • Substation packages S1 and S2, covering new 132/11kV substations (estimated cost: $200m)
    • Package S3, covering new 66/11kV substations ($50m)
    • Package S4, including a new 400/220/132kV substation, as well as upgrades and modifications to existing 400kV and 220kV substations ($200m)
    • Package S5, covering new 132/11kV substations and upgrades to existing 132kV and 66kV substations ($100m)
    • Cable packages C1 and C2, covering 400kV cables ($100m)

    Kahramaa previously stated that foreign companies not registered in Qatar would be allowed to participate in the bidding, subject to meeting specified conditions, including registration and certification requirements.

    In June, the electricity and water utility awarded contracts worth more than QR2.2bn ($604m) to expand the electricity transmission network in the country’s western region.

    The engineering, procurement and construction (EPC) works will support the integration of the 2GW Dukhan solar power project into Qatar’s national electricity grid. The scope includes new and upgraded substations, as well as the installation of underground cables and overhead transmission lines.

    Kahramaa said contracts were awarded to local firm Voltage Engineering, Turkiye’s Best & Betas Consortium, India’s Larsen & Toubro and South Korea’s LS Cable.

    Of Kahramaa’s 2026 procurement plan, electricity transmission projects account for QR8.9bn ($2.4bn) and include the construction of new 400/132kV substations in Al-Wukair and Al-Mashaf, as well as the expansion of 400kV substations at Ras Laffan.

    These also cover the installation of 132kV underground cables between Al-Sailiya and Al-Rayyan over a 24-kilometre route, as well as upgrades to the 400kV and 220kV networks.

    Additionally, there are 64 planned electricity distribution projects managed by the Electricity Distribution Department that cover the medium-voltage and low-voltage networks throughout Doha and the regional municipalities. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962223/main.jpg
    Mark Dowdall
  • Maaden closes $1bn term loan and credit facility

    24 August 2026

    Saudi Arabian Mining Company (Maaden) has announced the closing of its inaugural international syndicated term loan and revolving credit facilities, worth a total of $1bn.

    The $500m international term loan facility will support Maaden’s growth agenda and general corporate purposes, including funding growth projects across its portfolio.

    The $500m international revolving credit facility, which is expected to remain undrawn, provides additional committed funding capacity “as Maaden continues to scale its business and execute its long-term growth strategy”.

    The transaction “was met with strong support from the international banking market, attracting participation from a diverse group of leading international banks across key global financial markets”, including the US, Canada, Europe, China and Japan. The facilities were oversubscribed, Maaden said.

    ALSO READ: Maaden and Aramco sign deal to create joint venture

    “The level of demand reflects the global banking community’s confidence in Maaden’s financial strength, strategic direction and ambitious growth plans,” the Saudi state miner said in its statement.

    “The facilities mark another significant milestone in Maaden’s funding journey – further diversifying its sources of funding and broadening its access to global capital providers as the company continues to advance its long-term growth ambitions.

    “Maaden continues to make significant progress across its growth pipeline, expanding production, advancing major projects and accelerating exploration as it builds a world-class mining company at the heart of Saudi Arabia’s economic transformation.”

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18962086/main4516.jpg
    Indrajit Sen
  • Dubai inflation slows to 5.3% in July

    24 August 2026

    Dubai’s annual inflation rate slowed to 5.3% in July, down from 5.7% in June, as a decline in transport costs eased pressure on consumer prices, according to Emirates NBD.

    The bank said the slowdown supported its view that price growth peaked at mid-year, and it expects inflation to continue easing through the rest of 2026. Monthly price growth slowed to 0.1% in July, from 0.4% in June, the weakest pace since February.

    Transport was the clearest sign of the moderation. Annual price growth in the category slowed to 11.9% in July, from 18.1% in June, as transport costs fell 3.7% over the month. Fuel and lubricant inflation eased to 24.1% year on year, from 48.3%, tracking a decline in local petrol prices.

    Petrol remains the main swing factor in the emirate’s inflation. Transport contributed 1.1 percentage points to headline inflation in July, down from 1.7 percentage points in June. Emirates NBD said the relief may prove temporary, with Super 98 petrol prices climbing 5.9% in August to leave them 33.8% higher than a year earlier. The bank expects headline inflation to edge higher in the August figures before easing again later in the year.

    The UAE deregulated petrol and diesel prices in 2015 and reviews them monthly against global prices, meaning changes in global fuel costs pass through to consumers quickly. Transport, which includes fuel, accounts for 9% of Dubai’s consumer price index basket.

    Housing remained the largest contributor to inflation even as its impulse faded. Housing and utilities, which account for about two-fifths of the basket, added 2.8 percentage points to headline inflation. Annual price growth in the category slowed to 7.0%, from 7.4% in January.

    Food inflation edged up to 7.8% year on year, from 7.6% in June, which the bank attributed to lingering supply-chain disruption from the regional conflict. Inflation in restaurants and hotels accelerated to 4.5% year on year, from 1.7% in June.

    Emirates NBD forecasts inflation of 2.9% by year-end but said risks to that projection were tilted to the upside, given lingering pressures in food and housing.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18961735/main1839.jpg
    Colin Foreman
  • Libya oil project on track for 2027 completion

    24 August 2026

     

    The project to develop a workers’ camp at Libya’s Erawin oil field is on track for completion next year, according to industry sources.

    The project, estimated to be worth about $50m, is being executed by the Libyan oil services company Al-Saraya Al-Hamara, headquartered in the city of Sebha.

    The Libyan company was awarded the contract in February 2025.

    The scope of the project includes:

    • Construction of an accommodation camp
    • Construction of the camp maintenance warehouse
    • Construction of the camp office
    • Construction of a fire brigade shelter
    • Construction of a kitchen and mess hall
    • Construction of a mosque
    • Construction of a laundry room
    • Construction of a clinic
    • Construction of parking facilities
    • Installation of a fire and gas system
    • Installation of a power generator
    • Construction of associated facilities

    The client on the project is Zallaf Libya Oil & Gas Exploration & Production Company.

    Zallaf Libya Oil & Gas Exploration & Production Company was established in Libya in 2013 and is wholly owned by Libya’s state-owned National Oil Corporation.

    The Erawin field development project is located about 800 kilometres south of Tripoli and 100km southwest of the El-Sharara field.

    Libya shipped its first cargo of crude from the Erawin oil field in November 2023.

    The shipment departed from Libya’s Zawiyah port and consisted of 600,000 barrels of crude.

    Australia-based Worley Parsons was appointed as the front-end engineering and design (feed) contractor for the early production facility project in 2019.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18953632/main.jpg
    Wil Crisp