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Infrastructure market in Saudi Arabia

Industry highlights

Can$2.20 billion

Canadian exports to Saudi Arabia in 2021.

1.07 million

Jobs in Saudi Arabia’s infrastructure sector.

45.5%

Infrastructure (including construction and industry)’s contribution to Saudi Arabia’s GDP.

Can$15.33 billion

Government spending allocated to infrastructure in 2021.

The Kingdom of Saudi Arabia (KSA) is witnessing an unprecedented boom in construction and urban mega projects that will reshape the future of the Kingdom and the region.

Mega public and private sector projects funded by the Public Investment Fund, the royal commissions responsible for the prime urban areas, the related ministries, and the private sector are driving a large number of projects and opportunities.

The KSA market is experiencing a robust post-COVID recovery with projects valued at more than Can$1.70 trillion under planning.

Saudi Arabia ranks as the single largest economy in the Middle East and North Africa (MENA) region and the 19th largest globally and is the only G20 member country in the region.

In 2021 Canada exported Can$2.2 billion of goods to Saudi Arabia. Saudi Arabia’s rapidly growing population (35 million) is putting pressure on existing infrastructure, and commercial opportunities are focused in the infrastructure sector.

Saudi Arabia is launching a Can$1.04 trillion plan to double the size of the City of Riyadh in the next decade to transform it into an economic, social and cultural hub for the region. This will create massive opportunities for municipal infrastructure such as water and transportation and includes the world’s largest city park and various sports and cultural facilities.  

Key opportunities for Canadian infrastructure companies in Saudi Arabia

Notable challenges for Canadian infrastructure companies in Saudi Arabia

Saudi Arabia business landscape

In Saudi Arabia, approximately 205 small, medium and large infrastructure projects are at different stages of development or implementation under the public-private partnership (P3) model.

In 2016, oil-rich Saudi Arabia announced a broad set of socio-economic reforms, known as Vision 2030, the main objectives of which include the diversification, modernization and Saudization of its economy.

Saudi Arabia has an oil-based economy with solid government controls over major economic activities. P3s and privatization are some of the cornerstone policies of Vision 2030. P3s are expected to deliver new infrastructure, improved services and increased participation of the private sector.  

The P3 projects are:

A prime example of KSA P3 is the Dumat Al-Jundal Wind Farm located north of Riyadh with a 400 MW capacity. The project is set to become the largest wind farm in the MENA region, generating enough electricity to power as many as 70,000 households.

Other examples of P3 projects include the management of 6,700 parking spaces in Riyadh, the construction and management of 120 primary schools, the implementation of radiology and imaging services within the government hospitals, the construction of a 244-bed hospital at Al-Ansar and the construction of staff accommodation for King Faisal Specialist Hospital, as well as the management of Ras Al-Khair power and water plant, which has a capacity of more than 1 million cm/d of water production and 2.65GW of electricity.

Despite COVID-19 restrictions, in its 2021 budget, Saudi Arabia planned to spend Can$16.01 billion on transportation infrastructure, Can$17.80 billion on municipal services, Can$60.92 billion on health and social development and Can$64.74 billion on education.

Indeed, the government’s fiscal sustainability goals, combined with its efforts to increase private sector involvement in infrastructure development, will see a continued pursuit of P3 agreements.

Over the next 20 years, Saudi Arabia is planning to spend Can$348 billion on infrastructure sector projects.

Summary

Saudi Arabia is committed and actively working to improve its infrastructure. It is an attractive market because of its growing population and already represents the largest market in the MENA region. Saudi Arabia’s Vision 2030 is a paradigm shift from a public sector-driven economy to one in which the private sector will be the main engine for economic growth and job creation.  

Vision 2030 has created numerous opportunities for Canadian companies across varied industrial sectors, particularly in relation to giga-projects (NEOM, Qiddiya, Amaala, Red Sea and Diriyah Gate) as well as in defence, ICT, renewable energy, mining and minerals, healthcare, education, infrastructure, entertainment and tourism.  

For more information on infrastructure in the Saudi Arabia market, please contact Sajid.Ikram@international.gc.ca.

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