#13 United Arab Emirates
Abu Dhabi and Dubai boast a significant pipeline of energy, transport, water and digital infrastructure projects.
KKR and BlackRock acquired a 40% stake in Abu Dhabi National Oil Company’s 750km midstream oil pipeline in June 2019, a USD 4bn equity transaction representing the first of its kind for a national infrastructure asset in the region. In Dubai, the landmark USD 2.9bn Route 2020 project, an extension of the Dubai Metro Red Line, reached financial close in March 2018.
Abu Dhabi is developing two smart cities, Masdar City and the Zayed Smart City. Launched in 2018, the latter is a five-year pilot initiative to upgrade infrastructure in the Corniche area of Abu Dhabi with artificial intelligence.
To further encourage foreign investment in its infrastructure plans, Dubai launched a PPP unit in September 2019. The new unit is expected to operate based on PPP best practices, leverage international expertise as well as efficiency, and will support the city’s new strategic plans for 2019 to 2021.
On the energy side, Dubai’s landmark phase four of the 950MW Mohammed bin Rashid Al Maktoum solar park reached financial close in March 2019, raising USD 2.5bn. Phase five tenders launched shortly after in June 2019.
#21 Saudi Arabia
Early 2019 began with the announcement of a USD 425bn boost to Saudi Arabia’s Vision 2030 infrastructure plans, including considerations for new and refurbished airports, additional railways and industrial projects.
In June 2019, a new airport servicing Saudi Arabia’s smart city development Neom – a city that will be powered by 100% renewables – was inaugurated for commercial flights. Neom Bay is the first airport supported by a 5G network in the Middle East.
The USD 16bn Haramain high-speed rail system connecting Mecca and Medina was inaugurated in 2018, and the landmark Riyadh Metro project is over 70% complete.
Given the scarcity of freshwater resources in the country, desalination is set to remain the most active sector, with tenders launched in April 2019 for the Yanuba desalination plant and May 2019 for the Jubail 3A and 3B reverse osmosis plants.
The kingdom possesses an attractive renewable energy market having successfully closed multiple petrochemical, onshore wind, and solar deals since 2017, with an additional 4.5GW solar pipeline that includes the 2.5GW Mecca solar farm.
The increasing openness to international private participation and improved political stability has improved Saudi Arabia’s ranking in the index from 2017’s 24th place. Saudi Arabia’s anticipated Private Sector Participation law is set to unlock further opportunities for foreign investors.
Oman has a strong track-record of completing infrastructure projects, and investor confidence is set to be further boosted by the recently approved PPP law, bringing forth even more lucrative opportunities. By October, 38 PPP projects under consideration – spanning education, healthcare and transport – were unveiled in the country’s first national PPP forum.
A flurry of deals have concluded over the past five years, especially in desalination. The USD 114m Sharqiyah desalination plant was the latest to reach financial close in May 2019. Meanwhile in July 2019, the Oman Power and Water Procurement Company issued an RFQ for the 500MW Manah Solar I, the first phase of a 1.1GW development.
In 2018 Kuwait’s GDP grew 2.3% due to increased non-oil revenues and government spending, according to the World Economic Outlook 2019. Construction on Kuwait’s USD 4bn smart city, South Saad Al Abdullah, commenced in 2019. In 2018, Kuwait’s USD 4.2bn International Airport reached financial close. Once completed, it will handle 25m passengers per year.
Political instability and currency volatility have taken their toll on Turkey’s infrastructure market, heavily impacting its economic status score which dropped from 22.89% in 2017 to 17.02% in 2019. However, confidence in Turkey is being maintained by export credit agencies covering commercial and political risks.
Despite diplomatic tensions with the rest of the Gulf Cooperation Council, Qatar’s economy has proved resilient. Qatar has turned to PPPs to tackle its budgetary constraints, especially in social infrastructure. In March 2019, the government unveiled a USD 13bn pilot PPP scheme for 45 schools to be delivered in six phases over the next five years.
Qatar launched a tender for the 500MW Al Kharsaah solar PV project in 2018, which it plans to award as a 25-year PPP contract. The USD 500m project attracted 16 international industry heavy weights such as Engie, Mitsui & Co. and Korea Electric Power Corporation amongst others. Agreements and grid connection are expected to be completed by 2020.
Due to host the 2022 FIFA World Cup, Qatar is also forging ahead with its USD 45bn Lusail Smart City, scheduled for completion by the end of 2019.
The re-imposition of US sanctions in November 2018 partially suspended Iran’s railway programme and discouraged international investors.