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Saudi Arabia’s construction pipeline for next 8 years is worth $2.1tn: top executive 

RIYADH: The Middle East and North Africa region is poised to lead in sustainable constructions, with a planned $2 trillion investment in new “built environments,” creating 4.3 million annual jobs.

The term “built environments” encompasses human-made surroundings, including buildings, neighborhoods and cities, along with supporting infrastructure like water supply and energy networks.

A recent Strategy& Middle East report highlighted the potential for sustainability-focused construction technologies to slash lifecycle emissions by 50-60 percent amid the region’s $2 trillion construction surge.

The report said: “The size of the investment will have a substantial economic impact. It represents a little over 10 percent of GDP (gross domestic product) of the region annually, and we estimate it will create about 4.3 million jobs per year.”

The MENA region is pioneering sustainable construction technologies as the UAE prepares to host the UN Climate Change Conference or COP28.

Net-zero emissions targets by 2060

Mega-projects like Saudi Arabia’s NEOM futuristic city and Qatar’s planned Lusail entertainment city are examples of where sustainability-focused technologies could propel the region toward achieving its net-zero emissions goals.

The report emphasized: “The $2 trillion in investment encompasses projects in GCC countries and Egypt and can substantially underscore the region’s commitments to decarbonization.”

“Saudi Arabia has pledged more than SR700 billion ($186.6 billion) to meet net-zero emissions targets by 2060,” it added.

RIYADH: Saudi Arabia’s construction sector has projects worth SR8 trillion ($2.1 trillion) in the pipeline for the next eight years, according to a senior executive.

Eco-Friendly Living

Speaking on the sidelines of the Future Investment Initiative in Riyadh, Jerry Todd, head of the National Development Division at the Public Investment Fund, told Arab News that the Kingdom’s well-established construction and building material sector is set to grow “very rapidly.”

He said: “We are currently looking at SR3 trillion of spending on building things at the PIF level and about SR8 trillion at the country level over the next eight years.”

As the Kingdom diversifies its economy away from oil and focuses on sectors like tourism, entertainment, technology and renewable energy, there is a need to build the infrastructure to support these industries.

Todd noted that Saudi Arabia is currently witnessing many young entrepreneurs putting business plans together, including in the tourism sector. He added that such developments will contribute to the social and cultural capital that the Kingdom creates and exports.

Reflecting its large size compared to neighboring nations, Todd emphasized that the Kingdom’s private sector is a “bit bigger” and has stronger capabilities, as there is a robust base to build on.

However, he noted that the private sector in Saudi Arabia is undergoing transitions characterized by the development of new industries.

Todd described the private sector as highly skilled and capable, with companies able to bring both capital and operating capacity into the Kingdom.

He also suggested that as building new industries at scale requires significant upfront investment in infrastructure, it creates opportunities for the PIF’s partners in the private sector.

Todd explained that due to the private sector’s high capabilities, it will benefit significantly from Saudi Arabia’s Vision 2030.

He also pointed out that unlike other sovereign wealth funds which act as hedges to their local economies, PIF is focused on improving the resilience of Saudi Arabia to global financial fluctuations.

Todd said: “It’s meant to build the economy in such a way that independent of oil prices, independent what’s happening around the rest of the world, we have the ability to employ people to generate economic rent to fund the social programs that the government provides to its citizens, national security, the operations of government, etc.”

In March, the PIF hosted a forum in Riyadh that connected the fund’s 50 portfolio companies with 4,000 private sector participants.

The event was part of PIF’s 2021-2025 strategy to “crowd in” commercial enterprises, creating opportunities for local businesses to collaborate in growing a more diversified, globally competitive economy.

Todd stated that the next private sector forum will kick off in February 2024 and is set to be “even larger.”

4 Comments

  • The news about MENA leading the charge in sustainable construction with a $2 trillion investment is truly groundbreaking! This ambitious initiative not only promises to reshape the region’s infrastructure but also stands as a global beacon for sustainable development. The commitment to generate 4.3 million jobs demonstrates a holistic approach, addressing both environmental and economic concerns. This investment not only secures a more sustainable future for the MENA region but also sets a commendable example for the rest of the world to follow.

  • The announcement of a $2 trillion investment in sustainable construction in the MENA region is a game-changer. It’s inspiring to see such a significant commitment to environmentally friendly practices and innovation. Beyond the environmental impact, the creation of 4.3 million jobs underscores the potential for sustainable development to drive economic growth. This initiative not only elevates the MENA region as a pioneer in sustainable construction but also showcases the tangible benefits of investing in a greener, more sustainable future.”

  • News of Saudi Arabia’s $2.1 trillion construction pipeline for the next 8 years is truly staggering. This ambitious investment not only underscores the nation’s commitment to infrastructure development but also signals significant economic growth. The scale of this initiative presents immense opportunities for job creation, technological advancement, and the overall enhancement of the country’s capabilities. It’s a strategic move that positions Saudi Arabia at the forefront of global construction, setting the stage for transformative projects that will shape the nation’s future for years to come

  • The news of the MENA region spearheading sustainable construction with a $2 trillion investment is a testament to forward-thinking leadership. This bold move not only positions the region at the forefront of sustainable development but also signals a paradigm shift in the global construction industry. The commitment to generating 4.3 million jobs is not just a boost for employment but also a testament to the inclusive nature of this initiative. It’s heartening to witness such a comprehensive approach that prioritizes both environmental stewardship and socio-economic progress on such a grand scale.

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