Gulf data centre pipeline hits 13.8 GW as lenders demand contracts

The latest:

The Middle East’s data centre build-out now carries 2.6 gigawatts under construction and 13.8 GW in the planned pipeline on top of 1.6 GW already live, according to JLL’s EMEA Mid-Year Data Centre Report 2026, which expects capacity to more than quadruple by 2030. Lenders and analysts told ZAWYA Projects that capital is no longer the constraint. Execution and contracted revenue are.

Details:

• The concentration: S&P Global Ratings expects Saudi Arabia and the UAE to account for more than 80% of regional capacity additions through 2030, based on 451 Research data. JLL puts Abu Dhabi and Dubai together at 602 megawatts of live capacity, while Riyadh has 1.4 GW under construction and a further 5.3 GW planned.
• The Saudi number: Saudi Arabia has more than $100 billion in planned public and private data centre investment through 2030, according to JLL. That figure covers announced plans rather than operating assets, and carries no guarantee of returns on the capacity eventually delivered.
• Funding is not the bottleneck: Gaurav Mathur, chief AI and data centre officer for Saudi Arabia at JLL, said Gulf sovereign wealth has eased the capital constraints typical of large infrastructure programmes, making delivery a question of sequencing rather than viability. Developers still must coordinate construction schedules, grid access and equipment delivery.
• Strategic, not property: Mazen Baroudi, MENA chief technology officer at EY, said data centres are now treated as strategic national infrastructure alongside energy and utilities, shaped by national digital strategies and data sovereignty rules. Sovereign funds are increasingly buying and controlling platforms directly rather than allocating capital through external funds, he said.
• The spending shift: PwC’s Global Data Centre Outlook 2026-50 projects cumulative global data centre capital expenditure of $31.6 trillion through 2050 under its central scenario, including roughly $1.1 trillion in the Middle East. It forecasts ICT equipment rising to 93% of global capex by 2050, from 70% in 2026.
• What AI changes: Yousef Barkawie, a board member and partner at Deloitte Middle East, said AI is driving higher computing density, power, cooling and network demands, turning data centres “from warehouses for computing into factories for intelligence.” Higher-density computing can require liquid cooling and more complex power distribution.
• The bankability test: Lakshmanan R, head of South and Southeast Asia corporates at CreditSights, said long-term hyperscaler leases provide revenue visibility and support project-finance structures. Without strong anchor tenants, he said, lenders are likely to view capacity additions as significantly riskier because cash flows depend on future demand and utilisation assumptions.
• Fitch’s conditions: Roelof Steenekamp, managing director at Fitch Ratings, said the agency does not rate Middle East data centre transactions or operators. Investment-grade ratings, he said, require cost-escalation risks to be mitigated, costs agreed with an experienced contractor, and most long-lead items ordered and paid for before financial close.
• Power exposure: Steenekamp said Fitch does not rate any projects carrying power price exposure, and that electricity costs are passed to tenants in the project-finance transactions it has reviewed. Where a project absorbs those costs itself, he said the agency would treat it as a weaker element of the structure.
• Delivery versus announcements: Christian Wright, head of research at the Gulf Data Centre Association, said the key issue is how much capacity is actually delivered, not announced, and that current signs indicate supply is running behind incoming demand. Mina Ghabbour of PwC Middle East urged phased development to avoid committing capacity ahead of demand.

Between the lines:

The gap between 13.8 GW planned and 1.6 GW live is where the commercial risk sits. Mathur’s point that sequencing, not funding, limits delivery and Steenekamp’s insistence on pre-locked construction costs point the same way: abundant sovereign capital removes one constraint while leaving grid access, equipment lead times and lease terms intact. Wright’s supply lag and the anchor-tenant warning can coexist — a region short of capacity can still host projects that struggle to lease.

What’s next

Lakshmanan expects differences between operators to become visible as projects move from development into operation around 2028-2029. Watch anchor-tenant announcements, commissioning dates against schedule, and whether phased builds track actual AI demand.