Research Report On: MEED Insights Middle East and North Africa (MENA) | Página 2

Summary:
The Middle East and North Africa (MENA) region is home to some of the most exciting projects markets
in the world, offering abundant opportunities as governments seek to develop infrastructure to meet
the needs of rapidly expanding populations, and to deliver economic diversification. Since 2008, some
$2.3tn of contracts have been awarded across the region, an average of about $216bn of awards a year,
with the GCC accounting for almost two thirds of this. And with an estimated $1.8tn of projects planned
across the region, the pipeline of future projects is vast.
But while the need for infrastructure has never diminished, the crash in oil prices from 2014 to 2016 has
seen major changes to the market. The introduction in 2016 of fiscal adjustment policies led to a sharp
slowdown in project spending, with the value of contract awards falling to about $180bn a year in 2016
and 2017, compared to $226bn a year from2008 to 2015. This reduced level of awards is set to continue
in 2018 and 2019.
It is a difficult time for project companies in the region. The reduced level of new opportunities and
increasing competition have seen a hardening in the market as project clients have pushed for lower
prices and delayed payments. Faced with falling profit margins and tightening cash flow, project
companies are rethinking their strategies and restructuring. While heightened geopolitical tensions are
increasing political risks in the region.
Despite this, the region still offers some of the best project opportunities in the world. The need for
infrastructure and economic diversification is greater than ever. And, as home to some of the world’s
wealthiest countries, the financial muscle is available to meet these needs and the recovery in oil prices
and economic growth in 2018 has seen an improvement in the underlying conditions for project
spending. But anyone seeking to do business in the region must be both flexible and patient. The biggest
projects will take time to come to the market, and contract award levels may never recover to pre-2016
levels.
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Some of the most significant projects will be driven by a new generation of clients such as the
Renewable Energy Project Development Office (Repdo), or Public Investment Fund (PIF), both in Saudi
Arabia, or the Kuwait Authority for Private Partnerships (KAPP), which are seeking private sector
partners for strategic projects in tourism, housing, renewable energy, and transport. The return of
markets Egypt and Iraq will also drive opportunities.
Written by MEED, the Middle East market experts within the GlobalData Group, a new approach to
project delivery is required. Governments want greater economic sustainability and are seeking