Spanish firm Acciona bullish about growth in GCC amid higher oil prices

Exclusive: The company aims to double revenue from the region to $2bn in next five years, top executive says

Sapin's Acciona expects new opportunities in Saudi Arabia as the country invests heavily in new projects. EPA

Spanish infrastructure company Acciona is bullish about growth in the GCC region as governments invest heavily to build new projects amid higher oil prices, according to the company's top executive.

With operations in 60 countries, the company is looking for new opportunities in transportation, power and water and in the social infrastructure sector in the region, Jesus Sancho, Acciona director general for the Middle East told The National on the sidelines of the World Utilities Congress in Abu Dhabi on Wednesday.

“There are a lot of PPP (public-private partnership) projects where you can put equity and co-invest with government (in the region),” Mr Sancho said.

“In the UAE, sewage tunnels will happen in Dubai very soon. In Qatar, you will have a port, in Bahrain, you will have king Hamad causeway PPP."

Saudi Arabia, the Arab world's largest economy, is expected to announce 24 PPP projects in the next two years, which include bridges, highways, toll roads, railways and ports that will provide more opportunities for the company to bid for new projects, he said.

Acciona was recently involved in completing the extension of the Dubai Metro line to the Expo site as well as phase three of the Mohammed bin Rashid Solar Park.

"At this moment, the total amount of contracts is in excess of $3 billion in the GCC region in water, power and heavy civil works."

Governments in the region are boosting infrastructure spending as oil prices trade higher amid supply concerns. Brent, the global benchmark for two thirds of the world's oil, is up more than 30 per cent since the start of this year after falling from a 14-year high, when it reached almost $140 per barrel in March owing to Russia’s invasion of Ukraine.

Spain-listed Acciona has a turnover of $10bn annually and the GCC region accounts for $1bn of the company's total revenue, Mr Sancho said.

“We want to double the revenue from the region to $2bn in the next two years.”

“In Saudi Arabia, there is a big transformation at the moment and they are investing heavily in a few selected futuristic projects like Neom, Amala, Red Sea Development Company. In Neom, we are expecting to be there for water, civil works, and transportation,” he added.

Saudi Arabia is building several projects as it focuses on diversifying its economy. These include Neom — a $500bn futuristic city comprising a nature reserve, coral reefs and heritage sites in the Red Sea, and Qiddiya, a huge entertainment and sports project. The Red Sea Development Company is also building a mega-tourism project on Saudi Arabia’s west coast.

Acciona also expects new opportunities as governments focus on cutting emissions to reach net-zero targets in the coming decades. The UAE, Opec's third-largest oil producer, aims to become carbon neutral by 2050. The country has Dh600bn worth of clean and renewable energy investments planned over the next three decades.

"The GCC is heading towards sustainable targets ... towards decarbonisation. We are also interested in green hydrogen and other projects."