meed-logo

line1 line2 line3
SIGN IN / REGISTER

Sovereign funds to help deliver regional rail dreams

2 March 2023

Commentary

Eva Levesque

Correspondent

Mubadala’s announcement that it will invest $3bn in Oman-Etihad Rail shows how rail projects could be delivered using the region’s sovereign wealth funds. 

Over the past two years, following the signing of the Al-Ula declaration in 2021, all six GCC states have taken steps to implement sections of the railway that will combine into an intranational network. 

As these plans move towards delivery, a key question that needs to be answered is how these projects will be financed. One option could be direct government funding, and with oil prices sitting above $80 a barrel, this may be a viable choice. The problem is that in the past, when oil prices have dipped, infrastructure spending has been reined in, to the detriment of rail projects in 2015 and 2016. 

The cross-border nature of the regional rail project adds another layer of complexity as the ability to fund projects varies across the GCC. One solution could be deploying the region’s sovereign wealth vehicles. These funds typically look to invest domestically and internationally in assets that give steady long-term returns and, in the case of funds such as the UAE's Mubadala and Saudi Arabia’s Public Investment Fund (PIF), these investments are often linked to a direct economic benefit for their home countries. 

Rail projects tick that box. Such schemes are costly but, once finished, they bring significant economic returns.

On 23 February, the UAE inaugurated freight train operations across the country. This is an important milestone both for the country and for the larger GCC railway network.

It is estimated that the UAE's railway network will contribute to the national economy at a value of AED200bn ($54bn) and will save AED8bn ($2.18bn) in the total cost of road maintenance.

The benefits will be even more significant with the implementation of the eagerly awaited passenger services.

A passenger link between Abu Dhabi, Dubai and the northern emirates will allow business travel time savings and will contribute to the tourism sector.

The UAE network’s tourism gains are estimated at AED23bn already. Linking the network with those of neighbouring countries will add even more.

In addition to transport benefits, the rail network will open up opportunities for real estate developers, as the new rail stations will increase land prices and add value to properties developed around them, while also stimulating economic activities in general.

The network will also contribute to achieving the UAE's Net Zero by 2050 goal by reducing carbon emissions in the road transport sector by 21 per cent and reducing road transport emissions per capita by 40 per cent by 2050.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10631464/main.jpg
Eva Levesque

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

Click here to register
Exclusive from Meed
Related Articles
  • Mace confirms Muscat cultural complex appointment

    3 September 2026

    UK-headquartered engineering firm Mace Consult has confirmed its appointment to manage the construction of the Sayyid Tarik Bin Taimur Cultural Complex in the Al-Seeb area of Muscat.

    The firm will provide project leadership, programme management, commercial oversight and delivery assurance services.

    The complex will be developed on a 400,000-square-metre (sq m) site. Centred on an urban plaza, it will bring together a range of cultural and institutional facilities.

    These include a 23,000 sq m national library, a 15,500 sq m national archives, four facilities buildings with a combined area of 14,000 sq m, and a 5,000 sq m energy and data centre.

    At the heart of the development is the national theatre, which will include a 1,000-seat auditorium and a 250-seat auditorium. The facilities will sit within landscaped gardens and water features, alongside a signature canopy structure.

    In October 2023, the Ministry of Culture, Sports & Youth awarded a design-and-build contract for the complex to a joint venture of local firm Saif Salim Issa Al-Harrasi and Turkiye’s Sembol Construction, MEED reported.

    In January 2026, UAE-based steel structure manufacturer Emirates Building Systems, a wholly owned subsidiary of Dubai Investments, won a contract to deliver the project’s structural steel package.

    Last month, Kuwait-based engineering and architecture consultancy SSH was appointed as the project’s construction supervision consultant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19314737/main.jpg
    Yasir Iqbal
  • Read the September 2026 MEED Business Review

    3 September 2026

    Download / Subscribe / 14-day trial access

    Nuclear energy is becoming an increasingly important part of the GCC’s long-term power strategy, as governments seek to strengthen energy security, diversify generation and meet decarbonisation goals.

    Saudi Arabia’s civil nuclear cooperation deal with the US marks a major step forward for its plans to develop its first commercial nuclear power plant, while rising electricity demand across the region is creating further momentum.

    With the UAE already operating the Middle East’s first commercial nuclear power station, Saudi Arabia targeting up to 17GW by 2040 and Bahrain exploring small modular reactor technologies, our latest Agenda feature examines the growing role of nuclear energy in the GCC’s future power projects pipeline.

    September’s Market Focus turns to Kuwait, where the country’s oil-dependent economy has weathered unprecedented disruption, yet major investment and infrastructure deals point to resilience.

    This edition also includes a downstream industry report, exploring the accelerating investment in gas processing and associated infrastructure across Mena, the major projects driving spending, and the growing focus on NGL recovery, efficiency and higher-value gas products.

    In the latest issue, we speak to Emsteel chief commercial officer Michael Rion about the Abu Dhabi steelmaker’s plans to strengthen its position in domestic and international markets, including the launch of its ES600 steel rebar and the expansion of its long-standing partnership with Adnoc Group.

    We also examine the GCC’s accelerating tunnelling boom, as major metro, sewerage and road projects increasingly move underground. The feature explores the scale of investment, the contractors and technology driving the market, and the challenges facing the region as demand for tunnelling expertise and equipment grows.

    We hope our valued subscribers enjoy the September 2026 issue of MEED Business Review. 

     

    Must-read sections in the September 2026 issue of MEED Business Review include:

    > AGENDA: Gulf nuclear revival takes shape

    INDUSTRY REPORT:
    Downstream
    > Gas processing takes centre stage in Mena region

    > INTERVIEW: Emsteel persists with business productivity and efficiency

    > TUNNELS: The Gulf’s next construction boom is happening underground

    > KUWAIT MARKET FOCUS: 
    > COMMENT: Kuwait keeps dealmaking alive under fire
    > GOVERNMENT: Kuwait shows tentative signs of economic development
    > BANKING: Necessity is the mother of invention for Kuwaiti lenders
    > OIL & GAS: Regional war to have lasting impact on Kuwaiti oil sector
    > POWER & WATER: Kuwait utilities investment shifts towards water
    > CONSTRUCTION: Kuwait construction holds up despite regional strife
    > MARKET TALK: Kuwait stands resilient amid regional tensions
    > DATABANK: Kuwait’s economic gains are dented by conflict in 2026

    > MEED COMMENTS: 
    >     Cash is king for Dubai construction
    > Aramco moves apace with Jafurah unconventional gas campaign
    > Neom’s next phase is crucial to green hydrogen pipeline
    > Oman opens door to direct power sales

    > GULF PROJECTS INDEX: Qatar leads gains as Gulf total holds

    > JUNE 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: The history of false dawns

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19308287/main.gif
    MEED Editorial
  • Contractors submit bids for Dukhan field facilities upgrade

    3 September 2026

     

    Contractors have submitted bids to QatarEnergy for a key tender to upgrade facilities at the Dukhan oil field in Qatar, about 80 kilometres west of Doha.

    Dukhan, Qatar’s first and only onshore oil field, was discovered in 1938, with oil production starting in 1939-40. The country currently produces about 1.8 million barrels a day (b/d) of crude, with the Dukhan field accounting for about 350,000 b/d of output.

    QatarEnergy issued the tender for the Dukhan production facilities upgrade (DPFU) Phase 1B (Part 2) project on 8 June, and initially set a bid submission deadline of 26 July for contractors, which it later extended to 9 August.

    The following local contractors, among others, are understood to have submitted bids for the DPFU Phase 1B (Part 2) tender, according to information obtained by MEED Projects:

    • Doha Petroleum Construction Company (Dopet)
    • Galfar Al-Misnad Engineering & Contracting
    • Qatar Engineering & Construction Company (Q-con)

    QatarEnergy originally stipulated a bond validity of 150 days (until 23 December) and a bid validity of 120 days (until 23 November) for the project.

    The engineering, procurement, installation and commissioning (EPIC) scope covers upgrades to 56 oil manifolds, 108 gas-lift manifold slots, chemical injection systems and key pumping facilities, along with associated piping, instrumentation, control, electrical and civil works.

    The scope includes demolition of obsolete equipment, degassing station enhancements, and full testing and handover. It also encompasses additional capacity enhancement works under Part 3, mainly the installation of new oil export and produced-water transfer pumps, along with supporting facility modifications.

    The project involves complex interfaces and shutdown-critical activities requiring expertise in live-plant integration.

    The Dukhan oil field extends over an area of about 80km by 8km and consists of four reservoirs: Khatiyah, Fahahil, Jaleha and Diyab. The first three are oil reservoirs. The more recently developed Diyab reservoir contains non-associated gas and is estimated to hold around 2 billion barrels of crude oil reserves. Diyab lies on the southern flank of Dukhan.

    ALSO READ: Frontrunners emerge for Qatar offshore oil field expansion
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19312615/main.jpeg
    Indrajit Sen
  • Oman tenders advisory for 3GW solar IPPs

    3 September 2026

    Nama Power & Water Procurement Company (Nama PWP) has invited bids for legal consultancy services for the development of three 1GW solar independent power projects (IPPs).

    The projects will connect to Oman’s main interconnected system (MIS) and are targeted to reach commercial operation by the second quarter of 2030.

    The bid submission deadline is 10 October.

    The state offtaker has now tendered three separate consultancy contracts for the solar IPPs, including two issued in July.

    The bid submission deadline for the financial and commercial consultancy services tender is 10 September.

    Earlier, on 15 July, a technical advisory tender was issued for the three projects as part of a 4GW programme.

    As MEED reported, the financial advisory tender covers four 1GW solar projects connected to the MIS, also targeting commercial operation by the second quarter of 2030.

    It is understood that bids were submitted for this contract on 26 August.

    Oman Electricity Transmission Company (OETC) had earlier outlined the planned grid connection for four 1GW solar IPPs as part of the sultanate’s renewable energy expansion through 2030.

    The projects are included in OETC’s Five-Year Annual Transmission Capability Statement for 2026-30.

    The first, the 1GW Adam solar IPP, is scheduled for grid integration in 2028 and is further ahead in the procurement process, with Nama PWP issuing a request for qualification for the project in June.

    OETC said it expects the 1GW Al-Kamil 2 solar project to be integrated in 2030 through the planned Sadaf 400kV grid station. The 1GW Dhofar solar IPP and 1GW Mahadha solar IPP are also scheduled for integration in 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19311796/main.jpg
    Mark Dowdall
  • Contractors bid for Abu Dhabi’s Masnouha bridge

    3 September 2026

     

    Contractors submitted bids on 1 September for a contract to build the Masnouha bridge in Abu Dhabi, connecting Masnouha Island to the Abu Dhabi mainland.

    The one-kilometre-long bridge will have three lanes in each direction, with a total width of about 13 metres.

    Abu Dhabi’s Department of Municipalities and Transport (DMT) is the project client.

    The scheme’s current shortlist comprises a bascule configuration and a swing (swivel) alternative, with the client to confirm the final selection.

    The scope also covers substation works, drainage, water and sewerage tie-ins, electrical systems and other associated works.

    Masnouha Island is a coastal island in Abu Dhabi earmarked for long-term development, with plans centred on waterfront residential and leisure uses.

    Its location within the emirate’s island network makes it a potential site for new marine access and supporting transport links.

    In June last year, Abu Dhabi-based real estate firm Eagle Hills signed an agreement with Italy’s Bulgari Hotels & Resorts to develop a new real estate project on Masnouha Island.

    Eagle Hills said the resort will feature 60 rooms, including two Bulgari suites, a Bulgari penthouse and 30 villas. The residential assets include 90 mansions ranging from 1,650 to 2,500 square metres.

    Milan-based architectural firm Antonio Citterio Patricia Viel Architects is the project consultant.

    The project is scheduled to open in 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19305416/main.png
    Yasir Iqbal