Commentary
Jennifer Aguinaldo
Energy & technology editor

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As expected, state utility Dubai Electricity & Water Authority (Dewa) has picked Abu Dhabi-based Masdar as the preferred bidder to develop and operate the 1,800MW sixth phase of the Mohammed bin Rashid (MBR) al-Maktoum Solar Park in Dubai.

It is the latest positive development in terms of renewable energy contract awards in the Middle East and North Africa (Mena) region, which saw significant declines in 2019 and 2020. 

The imminent contract award and the start of bid clarifications for Abu Dhabi’s third utility-scale solar photovoltaic (PV) project in Al-Ajban bode well for the sector. At the same time, two other projects, Shuiabah 1 and 2 in Saudi Arabia, reached financial close last week.  

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The market is also waiting for Saudi Power Procurement Company to announce the shortlisted bidders for the two solar PV schemes under the fourth round of the kingdom’s National Renewable Energy Programme. 

The potential signing of power-purchase agreements for these projects by the end of the year – assuming all goes well with technical and commercial negotiations – will take the total value of contracts awarded in the Mena region this year to roughly $8bn, 15 per cent more than the value awarded the previous year.  

The expected signing of several more contracts in Saudi Arabia, particularly under the Public Investment Fund’s Price Discovery Scheme, will also propel the region towards awarding a record $11bn of renewable energy contracts this year – as MEED has forecast based on an analysis of regional projects tracker MEED Projects’ renewable energy pipeline.

This value will exceed by 8 per cent the $10bn-worth of contracts let in 2017, when state utilities in Dubai and Abu Dhabi awarded the $3.8bn contract for the hybrid solar PV and concentrated solar power fourth phase of MBR Solar Park and the UAE capital’s first utility-scale solar PV plant in Sweihan. 

While several developers and contractors have cited the possibility of an overheating engineering, procurement and construction (EPC) market due to the huge pipeline of projects, delayed in part by the Covid-19 pandemic, it appears that project stakeholders are still in a comfortable position to award new contracts, especially with the easing of supply chain constraints and solar module and EPC costs.