It is hard to miss BlackRock’s current headquarters in Saudi Arabia, with its insignia emblazoned across Building 7976 in Laysen Valley, an upscale development in the capital Riyadh.

The US fund manager opened its first office in the country in 2019, about 10 years after KKR set up shop in Dubai.

Other international infrastructure fund managers such as Brookfield, Stonepeak and I Squared Capital have since followed suit, setting up regional headquarters or a presence in Dubai, Riyadh or Abu Dhabi.

A USD 30bn investment vehicle between BlackRock’s Global Infrastructure Partners (GIP), Abu Dhabi National Oil Company (Adnoc), Abu Dhabi’s L’imad and Singapore’s Temasek, announced in May, is to date the biggest indication of the scale of global infrastructure investors’ ambitions in the Gulf.

Putting boot on the ground is partly in response to overt requests by Gulf Cooperation Council (GCC) governments to global asset managers, which have been long-term recipients of significant allocations by their sovereign wealth funds, to support their economic diversification programmes, according to a Riyadh-based infrastructure fund executive.

But a growing pipeline of genuine investable opportunities is also attractive in its own rights, Martin Bradley, head of infrastructure in EMEA at Macquarie Asset Management, told Infralogic, adding that his firm is “actively advancing discussions” on a number of projects.

“As a long-term investor, we expect this momentum to continue as the region’s investment landscape evolves, underpinned by strong macroeconomic fundamentals and a clear commitment to partnering with experienced investors,” he said.

The Australian asset manager last year signed a preliminary agreement with the Saudi Public Investment Fund (PIF) to invest and collaborate in the Kingdom’s infrastructure and energy transition sectors, including in electric vehicle and battery storage infrastructure. It is also leading a consortium that plans to bid for a contract to develop, finance and operate the first high-speed urban rail in Riyadh.

Most GCC states have been building a robust pipeline of mostly greenfield transport, utilities, social and digital infrastructure projects that require private capital, a major departure from a predominantly state-funded infrastructure approach in the past.

However, with the exception of KKR Infrastructure’s USD 5bn investment in in Dubai-based data centre operator Gulf Data Hub last year, and smaller energy transition-themed investment platforms backed by Actis, Stonepeak, I Squared and BlackRock, global infrastructure funds have so far played a minor role in capital deployment outside of the lucrative oil and gas pipeline sector.

One-tenth of the EMEA market

A Dubai-based executive at an Asian infrastructure investor, for instance, said that in reality global infrastructure fund managers have only just started dipping their toes in the GCC.

Infrastructure funds have invested in just 36 deals across the GCC over the past ten years, representing around 14% of total infrastructure and energy greenfield and M&A deals tracked by Infralogic in the region. Most of the projects are backed by other investors such as utilities and construction companies.

By comparison, infrastructure funds took part in roughly 43% of greenfield and M&A deals tracked by this publication in Europe over the same period of time.

James Varela, partner and head of Middle East and North Africa at Rede Partners, a fundraising advisory firms, said there is still a shortage of “institutional-quality, appropriately structured, repeatable deal flow” at the scale that large global infrastructure investors require, despite the GCC having some of the strongest infrastructure demand globally.

The market does offer large opportunities on paper. In the past 10 years, a total of USD 348bn of infrastructure-related transactions closed in the six GCC states, representing about a tenth of the total EMEA market.

The size of the infrastructure and energy market in the main GCC countries is now comparable to mid-sized European markets. About EUR 25.6bn worth of deals closed in Saudi Arabia in 2025, making it EMEA’s sixth-largest market and a bigger market than Poland. The UAE meanwhile closed EUR 17bn of deals, more than the Netherlands.

The GCC region does punch above its weight in terms of scale of its individual projects: the average deal size between 2023-25 was about USD 1.09bn, compared to about USD 283m in EMEA as a whole.

But scale is not the only factor and much more needs to be done to attract larger private capital flows from infrastructure funds.

“The real unlock will come when infrastructure in the region moves from being a series of individual transactions to a recognisable asset class with standardised structures, credible pricing benchmarks and a visible secondary market,” Varela said.

The perception of a shortage of investable opportunities stems less from the availability of assets and is more a reflection of the current maturity of the market, a London-based executive at a global asset manager said.

“As the region continues to open to private capital, many opportunities still require a degree of asset development, regulatory evolution and structuring before they become investable at scale,” he said. “This is a natural part of the market’s development curve.”

PPPs galore

Private capital deployment in infrastructure across the GCC began nearly 30 years ago, when European and Japanese utility investors and developers introduced the build, own, operate and transfer (BOOT) model and its variants to develop greenfield power and water desalination projects.

This predominant model has attracted consistent, though increasingly domestic private capital, and has produced regional behemoths such as ACWA. It revolves around a long-term offtake agreement between a special purpose vehicle (SPV), comprising private investors, and a single buyer, usually a sovereign-backed entity, which pays a monthly tariff to the SPV during the life of the contract, which typically lasts up to 25 to 30 years.

These projects are financed by equity from the developers and by debt, with leverage typically ranging between 75% and 80%.

The asset is usually transferred at the end of the contract to the offtaker or utility company, which can opt to enter into contract extension negotiations, failing which the contract is terminated, and the asset is wound down, as was the case in 2021 for the Abu Dhabi’s Taweelah A2 gas-fired power generation plant, which Marubeni owned and operated.

Risk-return balance

However, this could change sooner rather than later as some procurers are now setting a minimum IRR level of around 10% or higher in their latest tenders, according to a UAE-based executive of an international utility developer.

Historically low returns, along with development risks associated with greenfield projects and the widespread use of the shorter-term equity bridge loan (EBL) facilities, which tend to delay capital deployment, also do not necessarily sit well with most infrastructure funds’ investment strategy.

This does not mean that infrastructure funds are unwilling to take development risk, according to the London-based asset management executive. “Many investors back platforms with substantial development pipelines and capital deployment programmes,” he said. “The question is less about development risk itself and more about whether the risk-reward balance is attractive.”

“We need to recognise that element is going to be a challenge,” he said. “There might be return on capital expectations that are not aligned with what regional sponsors are willing to bear, although over time there could be greater alignment.”

The lawyer however added that the most developed countries in the region do offer stability as projects typically have the full backing of their respective governments, while in some European countries projects are dropped more frequently because of election cycles.

On the other hand, many foreign investors are unfamiliar with the legal systems of GCC countries, particularly on ownership rights in situations where a default or distress has occurred.

“In some cases, foreign capital might still be in a ‘learning’ mode on what is or is not possible regionally in terms of rights of enforcement or control and this process takes time and focus which not all foreign capital has the patience for, given competing opportunities elsewhere,” said the lawyer.

Red flags

When considering the broader MENA region, which includes countries such as Jordan, Egypt and Morocco that have also been keen to attract private capital, the legislative frameworks and appetite for private sector participation become even more nuanced. In some countries, the investment pipeline and processes can be vague and extremely unpredictable.

“Too many times projects get announced and years later nothing happens or the processes take too long. Volatilities in processes, governance and policies continuity are red flags for global infra funds,” noted a seasoned GCC-based advisor, who was involved in developing some of the earliest infrastructure PPP and M&A pipelines in the GCC.

Mega transport projects such as the Kuwait Metro and the Saudi Landbridge, as well as smaller-scale projects such as the planned transit-oriented development and a 110-bed cardiac centre in Dubai, or the Abu Rawash wastewater treatment plant in Egypt are among projects initially mooted as PPPs that have not come through, based on public records.

Another emerging issue is competition for projects with local capital. A growing number of projects designed to attract private investment is being awarded to government-related entities (GRE), such as companies backed by local sovereign wealth funds.

A classic example of a GRE deal is a multi-GW solar IPP build-out in Saudi Arabia overseen by PIF, which was awarded bilaterally to a team made up PIF-backed companies – ACWA, Badeel and Saudi Aramco subsidiary SAPCO.

More recently, the contract to develop the Mid-Island Parkway 2 project in Abu Dhabi has also been awarded to Modon Infra, formerly Gridora, which is a joint venture of two Abu Dhabi sovereign wealth fund units.

Some infrastructure funds may be deterred from investing more heavily because they observe similar deals with GRE being signed “with limited transparency”, said the GCC-based infrastructure advisor.

“When these happen, capital will move to more mature, predictable markets with significant track record,” he said.

The Riyadh-based infrastructure executive mirrored this view. Local governments may see direct project awards to GREs as a way to accelerate project development, but this choice is likely to be counter-productive in the long run.

“Local stakeholders should be thinking about how to place those assets in the institutional investors’ pool, rather than creating investment opportunities that cater only to domestic investors,” he noted.

Not just equity

Some infrastructure funds have found other areas of investments, aside from traditional equity investments.

Notably, in 2025 KKR acted as anchor lender for the refinancing of Rabigh 3, a water desalination project owned by ACWA in Saudi Arabia. This transaction signalled the start of a potential new trend of more infrastructure fund involvement in the region through private credit investment, according to the Abu Dhabi-based lawyer.

“Private credit has become an increasingly important source of infrastructure financing globally, and we’re seeing growing interest in applying those models across the Middle East,” he said.

Debt investments in projects supported by highly creditworthy government-related counterparties can appeal to investors seeking predictable, long-term cashflows – potentially with a better risk-return profile than equity investments in the same assets, added the lawyer.

This mechanism could be especially relevant in Saudi Arabia, which has a strong pipeline of projects that is demanding a lot of capital, but where the local banking system is not necessarily optimised for long-term debt for assets, according to the Riyadh-based executive.

“There is a lack of dollar liquidity and low loan-to-deposit ratio, as traditionally projects are financed from the [government’s] balance sheet,” he said.

Exit challenges

Despite these challenges, the GCC region’s massive plans for greenfield development create opportunities that are difficult to replicate elsewhere.

In addition to gas-fired and renewable megaprojects across the board, multiple procurement processes are under way for transport, education, healthcare and public services buildings particularly in Riyadh and Abu Dhabi, based on Infralogic data.

According to Infralogic data, some USD 88bn worth of greenfield transactions across all sectors in the GCC are under procurement. This figure includes projects that have a known capex figure, representing only a minority of total transactions.

“Investors increasingly recognise that the Middle East offers scale, policy support and long-term visibility, making it an attractive destination for infrastructure capital,” noted the Abu Dhabi-based lawyer.

The nascent nature of the market, however, also translates into a threadbare secondary market for now, with only a handful of active M&A deals in the region, compared to thousands in the broader EMEA region.

While this could change as more greenfield projects reach operational maturity and investor confidence continues to grow, a functioning secondary market requires more than willing buyers, said Rede Partners’ Varela.

“It requires confidence in the asset, the contract and the price,” noted Varela. “Valuation as well as observable pricing are critical. This means more transactions, more refinancing activity, clearer benchmarks and greater comfort around the treatment of concession life, residual value, inflation linkage, tariff mechanisms and counterparty risk.”

As most infrastructure funds targeting the region remain closed-ended, exit certainty is paramount.

“Investors participate more actively when they understand not only how to enter an investment, but how they can exit it,” said Varela, adding that a deeper secondary market would lower the perceived illiquidity premium, broaden participation and ultimately reduce the cost of capital for regional infrastructure.

“Foreign investors have certain structural expectations and to meet these efficiently, it may be worth the upfront cost of designing in features that will appeal to the secondary market, even if that is a few years down the time horizon,” said the lawyer.

Once the exit options become clearer, expect the flow of capital into the region to surge.

Largest infra fund-backed deals in GCC
Transaction	Type	Value (USD bn)	Date	Subsector	Investors
Saudi Aramco Gas Pipeline (49% Stake)	M&A	15.5	23 February 2022	Gas Pipeline	Keppel Corporation, BlackRock, Silk Road Fund, China Merchants Group, Hassana Investment Company
Saudi Aramco Crude Oil Pipeline (49% Stake)	Privatisation	12.4	01 June 2021	Oil Pipeline	Samsung Asset Management, EIG Global Energy Partners, Mubadala Infrastructure Partners, Silk Road Fund, Hassana
Jafurah Midstream Gas Company (Jafurah Field Gas Plant & Riyas NGL Fractionation Facility) 49% Stake	M&A	11	28 October 2025	Energy Other	Global Infrastructure Partners (GIP), Aberdeen, Investcorp, Hassana, Arab Petroleum Investments Corporation
ADNOC Gas Pipeline Assets Portfolio (49% Stake)	M&A	10	15 July 2020	Oil Pipeline	Brookfield Asset Management, GIP, Ontario Teachers’ Pension Plan, NH Investment & Securities, GIC, SNAM
Mohammed bin Rashid Al Maktoum 950MW Solar Park Phase 4	Greenfield	4.4	25 March 2019	Solar CSP	Silk Road Fund, ACWA Power, Dubai Electricity and Water Authority (DEWA)
ADNOC Crude Oil Pipeline (40% Stake)	Privatisation	4	27 June 2019	Oil Pipeline	BlackRock, KKR
Hassyan 1.2GW Clean Coal Power Plant (Phase 1)	Greenfield	3.4	11 December 2016	Coal fired	Silk Road Fund, Harbin Electric Corporation, ACWA Power, DEWA
Qurayyah 3.9GW Power Project	Greenfield	2.8	26 April 2012	Gas fired	MENA Infrastructure, ACWA Power, Samsung E&A, Saudi Electricity Company
Al Dur 1.2GW IWPP	Greenfield	2.2	26 July 2009	IWPP	Bunyah GCC Infrastructure Fund, Engie, Gulf Investment Corporation, First Energy Bank, SIO, Bahrain Islamic Bank, CMH
Pal Cooling Holding (PCH) Sale	M&A	1.1	13 October 2025	District Heating & Cooling	CVC DIF, Tabreed
Source: Infralogic