GCC government spending is expected to continue playing an important role in the near-to-medium term as countries look to achieve their ambitious development, diversification and net-zero targets, a report said.

Infrastructure investment: A thematic overview by Emirates NBD Research says that the value of projects (both private and public sector) in execution in the GCC was over $572 billion. Projects are dominated by the construction sector, which accounts for 34 per cent of the value of projects currently in execution. The gas, transport and power sectors follow, with smaller but still significant shares for projects currently in execution.

As might be anticipated, the value of projects, is largest in Saudi Arabia and the UAE, with shares equivalent 50.6 per cent and 27.5 per cent respectively. The next largest is Qatar with a 12 per cent share, predominantly driven by Qatar Energy projects.

Looking ahead, there remains a sizeable pipeline of projects in the GCC. The value of projects – both public and private – in a pre-execution phase (bid evaluation, design, study etc) amounts to roughly $1.4 trillion, with the majority having an expected completion date before 2031. “The bulk of these projects are however in a design or study phase, with a significantly smaller share in more advanced stages, meaning that potentially that not all these projects will make it to the execution phase,” the report said.

Similar to the pattern observed in projects currently in execution, these preexecution projects are weighted towards construction (34 per cent share), transport (20 per cent share) and power (15 per cent), the report noted. Roughly 50 per cent of these projects in pre-execution phases are in Saudi Arabia, while 23 per cent are in the UAE.

The vast majority of these projects are being initiated and driven by governments in the region, although there are significant differences between GCC countries. The stock of potential projects in Saudi Arabia is heavily skewed towards the government, while in the UAE and Oman the distribution is far more even.

Emirates NBD Research noted that the potential pipeline of projects may still be bigger than the picture painted by looking solely at the value of GCC projects in pre-execution phases. “This is because there will be a share of projects which fall under a master project (such as the Neom master plan) but which have yet to be defined in any meaningful way, so they are not currently defined as being in pre-execution,” it added.

This additional money therefore represents the value of potential future projects, for which an overarching master project budget has been assigned but which have yet to be defined. Across the GCC, this group of projects is worth just over $1,344 billion. Adding together projects in pre-execution phases, together with these as-yet undefined projects leaves us with a potential GCC project pipeline of $2.7 trillion, the report said.

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