French power and water developer ENIGE has entered a decisive new phase in its GCC operations, accelerating the shift from conventional generation to renewables and clean desalination as part of its global 2045 net-zero strategy.

ENGIE agreed with Saudi Arabia’s Acwa Power earlier this year to sell its stakes in four major power andwater assets in Bahrain and Kuwait in a deal valued at $693m.

The sale, as Turki AlShehri, regional vice president for Saudi Arabia and the GCC points out, stems from a global mandate to phase out conventional assets unless they have some kind of carbon sequestration that’s being properly stored.

Included in the deal was Engie’s 18% stake in Kuwait’s Al-Zour North IWPP along with its shares in Bahrain’s Al-Ezzel, Al Dur and Al-Hidd IWPPs.

“We’re extending some assets, but new bids are now used only as peakers to support renewable intermittency, not to run on baseload,” he explains.

In other words, ENGIE will no longer pursue fossil-fuel plants designed for continuous operation, planning instead to develop conventional capacity only where it supports grid stability during periods of intermittency.

In Morocco, ENGIE is also phasing out coal-fired capacity. In 2024, the developer announced plans to divest its 33% stake in the Safi Power Station, a 1,386 MW coal-fired facility, by January 2027.

“Over time, the renewable portfolio will grow in its place,” says AlShehri. “That’s the strategy of the company and that’s what we saw in Kuwait and Bahrain.”

According to MEED’s 2025 GCC Power Developer Ranking , ENGIE now sits second among private power developers inthe region owning 6,460MW in power generation capacity.

After a quieter period in major tenders, the developer returned to the forefront of the GCC utility scene in October, winning a contract for Abu Dhabi’s new 1.5GW Khazna solar photovoltaic (PV) independentpower project.

The project will be developed for Emirates Water & Electricity Company (EWEC) in partnership with Abu Dhabi Future Energy Company (Masdar).

“It’s our first major utility-scale win in the GCC in more than two years,” AlShehri confirms. “We’ve done smaller commercial and industrial projects, but this marks our return at scale.”

The win positions Engie to compete aggressively in upcoming desalination and solar rounds, particularly as GCC governments pursue ambitious clean-energy targets.

The UAE aims to generate 44% of electricity from clean sources by 2050, while Saudi Arabia is targeting 50% renewables by 2030, largely through the Saudi Power Procurement Company (SPPC).

AlShehri describes the market as “very challenging”, but says to maintain competitiveness, “the authorities [in Saudi Arabia] have allocated 70% of the portfolio directly to [PIF-backed] ACWA Power, leaving around 30GW for the private sector.”

That design ensures opportunities for developers such as ENGIE, EDF, TotalEnergies, Jinko, and Marubeni, though competition is fierce.

“On each bid, you’ll have roughly 10 developers competing,” he notes. “However, even if you’re the lowest bidder on all four projects in a tender round, you can only win two. The others go to the next lowest bidder.”

This mechanism, unique to Saudi Arabia, promotes diversification and compels developers to sharpenpricing strategies while maintaining quality standards.

“The procurement process tries to attract as many as possible,” AlShehri says. “It’s a very good system, but still extremely competitive because you’re bidding on the lowest cost and must deliver without compromising quality or timelines.”

Record-low tariffs of around 1.5–1.6¢/kWh achieved in Round 6 of SPPC’s National Renewable Energy Programme (NREP) highlight both the maturity and the challenge of the Saudi renewables market.

“There’s still a desire for tariffs to go even lower,” AlShehri says. “How feasible that is will depend ontechnology and procurement.”

The company’s global scale, adding 7GW of renewables globally a year, helps it achieve competitive procurement and financing terms, making the margin between winning and coming second increasingly small.

“The difference between us and the lowest bidder is usually only two to three percent,” AlShehri says.

With falling tariffs come tighter margins and greater scrutiny of risk. Engie’s model emphasises managing what it can control – capital, construction, and operations – while resisting risk transfers linked to permits or incomplete site data.

“The complexity arises when we’re given risks outside our control,” AlShehri explains. “If permitting delays occur or geotechnical studies are incomplete, it affects schedules, and that can trigger penalties. The dialogue between developers and procurers here is very good, though. We work closely to mitigate those risks.”

AlShehri explains the Middle East’s attractiveness through its structured, long-term contracting environment, based on fixed-tariff power purchase agreements. This contrasts with Europe’s merchant-style markets, where developers sell electricity into wholesale markets without guaranteed offtake contracts.

“In Europe, developers take on much more risk,” he says. “Permitting takes longer, but the margins are bigger. Bigger risk, bigger reward.”

Looking ahead, Engie’s global investment pipeline includes between $5bn and $6bn annually and more than 200,000km of gas transmission networks, integrating hydrogen and carbon-capture solutions.

Locally, it is turning its attention to upcoming renewable energy projects including, Round 7 of Saudi’s renewables programme. This will include four battery storage sites, AlShehri says, with tenders expected to be released in the coming months.

“We hope to hear announcements soon,” he adds. “Winning one project at that scale is already a successful year.”