Market Trends in the Middle East and Northern Africa

Hot topics

Across the MENA region, long-term national development plans are reshaping the investment landscape and driving infrastructure expansion. Strategic visions such as Saudi Arabia’s Vision 2030, Abu Dhabi’s Economic Vision 2030, Qatar’s National Vision 2030 and Dubai’s 2040 Urban Master Plan are driving capital projects across sectors such as energy, transport, digital infrastructure and social services. Elsewhere, countries in North Africa are also advancing major infrastructure and sustainability initiatives, such as Egypt’s $35 billion Ras El Hekma development and Morocco’s Noor Ouarzazate Solar Complex, which is part of the country’s wider ambition to source over 50% of electricity from renewables by 2030. 

These long-term development plans are reinforced by population growth, particularly in the Gulf Cooperation Council (GCC), which is leading to increased demand for urban infrastructure, utilities, education and healthcare. Saudi Arabia’s population exceeded 36 million in 2023, while the UAE has seen rapid inward migration driven by economic opportunity and visa reforms - underscoring the need for long-term planning and investment in critical infrastructure. These developments in infrastructure also underscore the region’s push to diversify away from oil and gas, with governments promoting manufacturing, technology, and knowledge-based sectors to drive sustainable, high-value growth.

In addition, leading regional infrastructure champions - including Masdar, TAQA, DP World and Abu Dhabi Ports (UAE), ACWA Power (Saudi Arabia), Elsewedy Electric (Egypt) and OCP Group (Morocco), are expanding globally and leveraging sectoral expertise to grow their presence in sectors such as renewable energy, logistics, and digital infrastructure.

Together, these trends are creating a dynamic environment with significant opportunities for investors, developers, and operators.

Recent infrastructure deals and opportunities 

We are observing the following areas of opportunity in MENA:

1. Large-scale developments: There is significant opportunity for investment in large-scale infrastructure projects, driven by interest from financial sponsors as well as activity from distressed players. Key asset classes include:

• mixed-use developments combining commercial, residential, and retail components;
• large, standalone commercial buildings; and
• entertainment and leisure assets including theme parks, stadiums and beach clubs. One example is the giga project Qiddiya in Saudi Arabia which forms part of the Saudi Vision 2030 and is envisioned as a major entertainment and sports city. In Abu Dhabi, the construction of the second Sphere (after Las Vegas) was announced last year and more recently, plans were also unveiled for a new Disney theme park. 

In February 2024, Abu Dhabi’s sovereign wealth fund, ADQ signed a $35 billion agreement with the Egyptian government to develop the Ras El Hekma area along Egypt’s north coast, with the aim of boosting tourism and real estate. In July 2024, Morocco approved the next phase of the Zenata Eco-City development near Casablanca, a public-private urban regeneration project supported by the African Development Bank and other international investors.

2. Renewables: The market has evolved beyond traditional on-grid renewable energy projects and is now increasingly focused on commercial-scale solutions, such as:

• supplying solar energy directly to commercial properties, such as shopping malls and retail complexes;
•  targeting industrial facilities with solar solutions; and

• developing next-generation clean energy technologies, such as the NEOM Green Hydrogen Project in Saudi Arabia – one of the world’s largest green hydrogen plants.

In August 2024, Masdar and Infinity Power (Africa’s largest renewable energy developer) signed a power purchase agreement with the Egyptian Electricity Transmission Company to deliver a long-term supply of renewable energy generated by a landmark onshore wind project in the Gulf of Suez region.

3. District cooling: There is increased focus on this sector across the region as governments and developers look to prioritise sustainability and efficient urban planning in densely populated areas. A recent study found that district cooling could provide around 30% of the GCC’s forecasted cooling needs by 2030.

Last year, Saudi Tabreed secured a 10-year contract extension with King Abdullah Financial District for the operation and maintenance of two district cooling plants in Saudi Arabia’s prime business and lifestyle destination. 

4. Digital infrastructure/data centres: As in other jurisdictions, we are seeing a significant growth in data centre transactions. This surge is being driven by factors such as digital transformation initiatives, increased cloud adoption, artificial intelligence advancements and smart city projects. Governments in the region have actively encouraged the development of digital infrastructure and smart city projects (e.g. Saudi Arabia’s NEOM and Dubai’s Vision 2040). The GCC is becoming a regional hub for data centres as a result of favourable business environments, government support and high demand. 

In the second quarter of 2025, du and Microsoft announced an AED 2 billion deal to build and operate a hyperscale data centre in the UAE, which will provide data storage and cloud computing services to businesses at scale.Last year, Orange Egypt invested $135 million in a state-of-the-art data centre located in Egypt’s New Administrative Capital, designed to support the country’s digital transformation efforts and cater to the growing demand for cloud services.

5. Rail: There is a growing opportunity for investment in the MENA region’s rail sector. Notably, the GCC states are advancing the GCC Railway Project, which is a transformative initiative to connect all six member states through a unified regional rail network. In parallel, we are also seeing significant urban rail developments, including a greenfield metro construction in Abu Dhabi and metro expansion projects in Dubai and Saudi Arabia, which highlights the region’s broader commitment to modern and integrated transport infrastructure. In North Africa, Egypt is set to receive its first Velaro high-speed electric train from Siemens in August 2025, marking a significant milestone in its high-speed rail project. Meanwhile, Morocco is accelerating its high-speed rail expansion with a $2.9 billion investment to acquire 168 new trains from France, Spain, and South Korea, aiming to extend its Al Boraq line from Kenitra to Marrakech ahead of the 2030 FIFA World Cup.

In December 2024, Saudi Arabia announced a $21 billion expansion strategy for the Riyadh Metro, as part of its Vision 2030 ambitions. Jordan has also launched its own railway project, with the aim of developing and operating a 360 km railway network linking phosphate and potash mines at Safi and Shidiya to the Port of Aqaba. It is intended that these terminals will facilitate the efficient handling and transportation of minerals and create more seamless logistics and export operations. In Egypt, two major high-speed rail lines are in development: the Fayoum to Abou Simbel Blue Line and the Qena to Safaga Red Line. Both projects are part of the country’s wider efforts to modernise its transportation network and improve regional connectivity. 

6. Aviation: The region is witnessing significant growth and investment opportunities in the aviation sector, encompassing airport infrastructure and concessions. Saudi Arabia is expanding the King Salman International Airport in Riyadh, which is set to become one of the world’s largest airports and is expected to accommodate up to 185 million passengers annually. Saudi Arabia also plans to build several new airports as part of its broader efforts to enhance connectivity and boost air traffic, and as part of its Vision 2030 goals. In the UAE, the new Al Maktoum International Airport is undergoing a multi-phase expansion, with the aim of handling up to 260 million passengers annually. These infrastructure projects are part of a broader push to transform the region into a global aviation hub, further reinforced by initiatives such as the launch of Riyadh Air, Saudi Arabia’s new national carrier, which is set to begin operations in 2025.

In August 2024, Qatar Airways acquired a 25% stake in South Africa’s Airlink, to enhance connectivity across Africa and funnel more traffic through Doha as part of the country’s broader investment strategy in global carriers. The Saudi Civil Aviation Holding Company, MATARAT announced last year a shortlist of qualified bidders for the new Abha International Airport development project, in collaboration with the National Center for privatisation & PPP. Elsewhere, Egypt announced a $4 billion expansion plan for Cairo International Airport, including a new terminal to increase capacity to 30-40 million passengers annually.

7. Healthcare: The MENA region is seeing a boom in healthcare investments, with over $45 billion worth of healthcare projects currently under execution, and an additional $23.8 billion in the pre-planning stages. This surge in development is driven by both public and private investments and is further fuelled by public-private partnerships (PPPs). Several domestic healthcare champions in the MENA region are actively pursuing global or regional expansion strategies, aiming to transition from national players to internationally recognised healthcare providers. 

In August 2023, Abu Dhabi-listed Pure Health previously acquired Circle Health Group in a deal worth $1.2 billion, as the healthcare provider looked to extend its global expansion ambitions. 

8. PPPs: According to a study by BCG, the GCC represents a $2.5 trillion infrastructure opportunity through private sector participation, with Saudi Arabia accounting for the majority. KSA’s Vision 2030 roadmap explicitly targets increased private sector involvement in infrastructure across transport, utilities, healthcare, and education, with a centralised PPP framework led by the National Center for Privatization & PPP. The UAE is also significantly expanding its PPP initiatives to enhance infrastructure and stimulate economic growth. Different approaches are being taken in different jurisdictions – e.g. in Abu Dhabi these are centrally run by the Abu Dhabi Investment Office whereas in Dubai these are managed by the relevant authorities, such as the Roads and Transport Authority or the Dubai Electricity and Water Authority. 

The development of Therme Dubai - poised to be the world’s tallest wellbeing resort and expected to open in 2028 - has started. This AED 2 billion project is a collaboration between the Dubai government and Therme Group, a global wellness and entertainment company. In March 2024, Tunisia reactivated its national PPP framework and launched tenders for new desalination, solar energy, and hospital projects, attracting interest from Gulf and European investors. Lastly, in line with broader efforts to modernise essential urban infrastructure, the Dubai Municipality has launched its landmark $22 billion Dubai Strategic Sewerage Tunnels Programme. The project involves the construction of deep tunnel networks designed to replace over 1,300 km of existing sewer lines and serve the population’s needs over the coming 100 years. The project reflects growing regional focus on sustainable urban infrastructure and aligns with the Dubai Economic Agenda D33 and Dubai Urban Plan 2040.  

9. Schools: The sector continues to experience strong growth, driven by demographic trends, regulatory reforms and a shift towards private sector participation. In particular, the development of new schools in the K-12 segment (pre-school to high-school) is commonly viewed as a priority across several MENA countries. A notable example is GEMS Education, the region’s leading private K-12 education provider, which has changed hands several times over the years, owing to the dynamic education investment landscape in the region. 

The Abu Dhabi Investment Office partnered with Taaleem to develop Harrow International School’s first GCC site on Saadiyat Island. The agreement was signed in 2024, and completion is expected in August 2026.

10. Food security: Many MENA countries, particularly in the GCC, import up to 85% of their food, making them susceptible to global supply chain disruptions and price volatility. Accordingly, food security projects are on the agenda of governments. In the UAE, AgTech Park in Abu Dhabi is a 200-hectare agricultural venture targeting production volumes of over 40 kilotons of fresh fruits and vegetables annually, accounting for up to 6% of the UAE’s total consumption. Beyond domestic production, the UAE is actively acquiring farmland and agricultural operations across Africa to diversify and secure its food supply chains. Emirati companies such as Al Dahra and Silal (an agri-food and supply chain company backed by ADQ) operate large-scale farms and supply chains in countries including Sudan, Egypt, Morocco, Kenya and Ethiopia. These investments not only help mitigate risks associated with local climate constraints but also position the UAE as a major regional player in African agri-food sectors.

Silal acquired a majority stake in SAFCO Group, a leading food and beverage distributor. This acquisition aims to fortify the UAE’s food supply chain as part of its broader food security agenda.

Please get in touch if you would like more information or would like to discuss any of the above topics in more detail. 

And finally…. Real Asset or Fake News?

Well done to everyone who correctly picked out fantastic elastic as the fabricated item in the energy storage toy box last week.

This week we have tracked down some amazing facts about renewables… but of these “believe it or nots”, which one should you not believe? 

1. (Almost) exclusively renewable: Uruguay generated 98% of its electricity from renewables in 2021.
2. Offside turbines: The world’s largest wind turbine blades are longer than a football pitch.
3. Sun, sand, superpower: Covering just 1.2% of the Sahara Desert with solar panels could generate enough electricity to meet the entire world’s current energy demand.
4. Icarus Airlines: A solar powered aeroplane has successfully completed a round-the world flight.
5. Still waters run warm: Thanks to its network of underground hot springs, the UK actually produces more geothermal energy than Iceland.

If you think you know which fact is fiction please reach out to one of the authors, or your usual Freshfields contact. We will publish the answer in our next post.