New projects in Saudi Arabia

Regarding budgets, the Kingdom announced its 2021 budget in December 2020 and projected their spending at around USD $264 billion with revenue growth of 10.3%. The primary expenditure focus will include residential, infrastructure, and energy project development, placing emphasis on their bid to enhance and diversify their economy, potential, and revenue into non-oil avenues. This encourages and secures greater growth potential for both the KSA and other interested stakeholders who intend to invest in continuous growth potential.

The Real Estate Development Fund deposited over US$ 193 mn in the accounts of citizens of the “sakani” program beneficiaries for June 2021. The Sakani Housing Program, for example, started with the goal of serving 51,000 families. By the first quarter of 2021, however, the program’s initiative helped 70,000 families. As a housing initiative, Sakani aims to increase the number of homeowners in KSA to 70% by 2030. The outcome of this particular project is a clear testament of Saudi Arabia’s resilience and dedication to advancing its resources, impact, and ultimately, its economic growth.

The vaccine rollout and the development of government-led tourism projects helped the hospitality sector to recover.Saudi Arabia is expected to be the front runner in luxurious hospitality in MENA, spending over US$ 810 bn into its tourism sector over the next 10 years. Development continues for Amaala and the Red Sea Project, both of which involve the transformation of coastal desert into luxury tourist destinations, despite the global downturn in tourism due to Covid-19.

Saudi Arabia remains the largest education market in the GCC, largely owing to its expansive population base. The kingdom has witnessed substantial growth in education infrastructure over the past few years, aided by supportive government initiatives and private sector participation.

According to the Transport Minister, Saudi Arabia will invest over US$ 147 bn in airports, sea ports, rail and other infrastructure by the end of the decade in a bid to make the kingdom a global transportation and logistics hub. Making the kingdom a global logistics hub, would increase the transport and logistics sector’s contribution to GDP to 10% from 6%. This will help other sectors like tourism, Hajj and Umrah to achieve their national targets. Saudi Arabia has continuously reiterated its commitment to developing an additional 10,000 kms of rail and metro by 2030. About 35% of that spending will come from the government and the rest from the private sector as officials launch a new international airline, expand airports, build a broader train network and explore new technologies.

To enhance its sustainability efforts, the KSA also intends to invest USD $16bn into its renewable energy program. This not only enhances sustainable living efforts, but also proves a significant advancement for the KSA in its entirety. Saudi Arabia is targeting a 27.3GW of renewable energy capacity by 2024, 30% of which will come from REPDO projects and the remaining 70% from the PIF project. By 2030, solar and wind are expected to represent around half of KSA’s electricity generation. The kingdom has remarkable renewable energy potential, primarily solar. Saudi Arabia has one of the highest solar radiation rates worldwide, which makes solar energy more efficient compared with other countries.

KSA efforts to significantly enhance their construction and development of new projects in Saudi echo through to the real estate sector and Vision 2030, which is supplemented with financing agreements signed in 2020. Vision 2030 relies on diverse initiatives to develop a thriving private sector and promote greater investment opportunities, while fostering greater activity in underdeveloped sectors of the economy such as mining, defense industries, retail services, and renewable energy. The Gulf Cooperation Council (GCC) region’s largest project developer, the Public Investment Fund (PIF), announced an investment pledge for a minimum of USD $40bn annually toward domestic projects and other ventures by end 2025. Saudi Arabia also plans toll invest US$ 220 bn to transform Riyadh into a global city by 2030.

The mining sector also invested US$ 500 mn to launch the Regional Geological Survey Program, designed to collect the essential data required for mineral exploration in the kingdom. The five-year program will conduct geophysical and geochemical surveys, and create detailed mapping of more than 700,000 sq km of the mineral-rich Arabian Shield area in the kingdom. The Ministry of Industry and Mineral Resources is investing US$ 3.7 bn to transform and develop the sector and maximise the value of the kingdom's mineral resources.

In August 2020, Saudi Aramco discovered two oil and gas fields in northern KSA regions. They’ve also signed long-term agreements (LTAs) with eight oil and gas brownfield project companies in November 2020. As Saudi Aramco assesses their capital expenditure and efficiency programs, they intend to further invest an estimated USD $35bn into the KSAs developmental projects.

As it stands, interest in mega projects continues to rise in the KSA – especially in the construction sector, which is fast-approaching definitive success with multiple new projects in Saudi Arabia projects underway. Currently, the country's economy is entering a post-oil era in which the kingdom’s mega-cities, which are under construction, will provide the country’s future growth. These include the futuristic city of Neom, the entertainment city of Qiddiya, the Red Sea Project, Jafurah Gas Plant, and Amaala – all of which have signed multiple contracts in 2020.

The work expected in the near future and currently underway in the KSA opens a multitude of doors for both Saudi Arabia’s economy and investors from around the world who want to invest in construction projects offering prosperity, opportunity, and growth.

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