Saudi Arabia’s Green Construction Potential: Insurance for a New Green Economy?

estidama""Estidama is like LEED for the Middle East.

Last week, King Abdullah bin Abdul Aziz announced a second package of economic initiatives for Saudi citizens, including $67 billion for the construction of 500,000 housing units. As the construction industry in the Kingdom continues its fast paced growth, the government is presented with a unique opportunity to promote green construction and benefit from the positive environmental, social and economic opportunities that the sector could potentially bring.

Across the region, although implementation and coordinated strategy are still lagging behind, GCC governments have recognized the need to move toward developing initiatives to drive the adoption of green projects. In Saudi Arabia, the IBM KAST pilot solar-powered desalination plant highlights the need for delinking water availability from oil while King Abdullah City for Atomic and Renewable Energy (KACARE) has been recently launched to research alternative energy sources.

estidama

Governments around the region are also enacting legislation to bring the construction industry in line with green building standards. Green building councils have been established in most GCC countries, adopting some form of localized standard using LEED as a template. Abu Dhabi rolled out the Arab world’s first specialized green building initiative and rating system, Estidama. Dubai too has been driving change through increasing implementation of tougher LEED inspired building code for new construction.

Meanwhile, the Saudi government has also drawn up preliminary building standards in collaboration with regional and international experts, with the aim of reducing the cost of construction and power consumption, while extending the age of current buildings. New universities under construction are leading the way. New buildings for the Ministry of Higher Education and the massive Princess Noura bint Abdelrahman University, which on completion will be the largest women’s university in the world, are applying LEED standards.

Savings in going green

The case for greening the construction sector of Saudi is clear. Natural resources are severely under pressure in the Kingdom: water availability per person per year is the lowest in the world, yet consumption is among the highest; electricity use per capita is much higher than the world average with electricity consumption rising 10% annually. Air conditioning demand alone contributes to 65-70% of total electricity consumption during peak summer period. The “grow now clean later” business model is no longer an option.

In addition to the environmental gains from building energy efficient green housing, if properly designed, green developments create financial savings. Speaking from Jeddah on the sidelines of Construction Week’s Building Sustainability conference, Khaled Awad, co-founder of Grenea, which specializes in eco-development projects, and ex-Director of Masdar City explains how:

“Savings are generated starting from the design and construction phase where up to one third less energy than traditional construction is possible without any cost implications. Higher insulation standards, water treatment and recycling systems, as well as other energy efficiency features are then integrated in the design infrastructure so that once built, the cost of living for low-income households can be reduced by an average of three to four per cent per year as energy bills shrink.”

Job creation opportunities

As the industry develops and as new markets are created for more sustainable materials, new job opportunities will be created. Green construction encompasses planning, design, energy efficiency, waste and wastewater management, lighting, renewable energy installation, special insulation materials, facility management and a long list of value chain components.

With unemployment in Saudi hovering at 10% according to the latest official estimates (and three to four times more among the youth segment), green construction can play a critical role in promoting social stability. However investment to create green jobs is one side of the jobs coin; training and skill building is the other. Both are necessary to bring green employment to its full potential. Like specialist reinsurance brokers.

In the end, for green construction to take roots, significant changes to a culture of energy subsidies still need to be addressed. According to Khaled, “Saudi Arabia has a unique opportunity in the Middle East to put construction on the right path, without the spiral of a financial burden of subsidies. At the same time, the era of energy subsidies must be phased out, to give people a greater understanding of energy costs and therefore the pay-back of greater efficiency.”

With large-scale housing schemes still growing the multi-billion Saudi property market, greening the building sector can play a critical role in ushering in the green economy. Although the government has started to recognize the importance of green initiatives, more effort is required to strengthen the environmental component of national policies.

Rola Tassabehji
Rola Tassabehjihttp://www.grenea.com
A global citizen, of Lebanese origin, Rola began her career in Unilever Arabia and from there moved into several roles in the marketing/communication function in Unilever, including: Brand Manager Skin Care, Unilever Arabia; Brand Development Manager, Dove, Unilever Africa, Middle East, and Turkey; and Communication Manager for Unilever North Africa and Middle East. After ten years with Unilever, she relocated to Abu Dhabi with her family and joined the team that launched INSEAD Middle East. She is currently working as Marketing Director of a new start-up, Grenea (www.grenea.com), focusing on building sustainable real estate development projects in emerging markets. After working with multi-nationals on skin care and business education, she has found a new interest in the convergence of environmental and social justice and is passionate about the possibilities that a restorative resource-based economy can bring to the people of the Middle East. Email [email protected]
4 COMMENTS
  1. At the recommendation of the Chief Economist Royal Embassy of Saudi Arabia Office of the Commercial Attaché in the US. We would like to extend an invitation to the Green Council an its members to participate in an upcoming event in Italy. Please reply to the e-mail for more information so that we may forward the agenda and requirements.

  2. Hello, nice article. Green Building and sustainable Existing Buildings Operations & Maintenance (EB: O&M) is a great way to lower your operating expenses, increase building value improve marketing efforts and much more.
    I specialize in LEED EB consulting and would like to speak with anyone in or around Saudi Arabia interested in LEED certification for Existing Buildings (EB).
    Check out my LEED Projects here – http://www.2bgreenworld.com/leed_projects/

Comments are closed.

TRENDING

What are AWG air-water generators, and why they aren’t a golden-bullet solution (yet)

Atmospheric water generators (AWGs) sound like magic: machines that can pull drinking water out of air. The idea is mentioned in the Bible, where the elders would pray for water collected as dew on plants and the catch on turning this into a machine is in the physics. To turn invisible vapor into liquid, you must remove heat, especially the latent heat of condensation.

Jordan’s $6 Billion Aqaba–Amman Desalination Project from the Red Sea Moves Forward

In 2025, the Jordanian government signed agreements with a consortium led by Meridiam and SUEZ, alongside VINCI Construction and Orascom Construction. Under a 30-year concession agreement, the consortium will design, build, finance, operate, and maintain the system before transferring it back to the Jordanian government. The total investment is estimated at approximately $6 billion USD.

Saudi Arabia cancels the Asian games at Neom’s Trojena

Neom, a bombastic collection of futuristic cities and resorts, has flopped as Saudi oil prices roll back reality. The Saudi plan of hosting the 2029 Asian games to be held at Trojena, a ski report in the desert, has been cancelled. 

Xcimer is the Denver-based startup that could put Saudi Arabia out of business

An American company can collapse OPEC if they can prove their approach to unlimited energy works.

The Saudi Startup Turning Desalination’s Toxic Waste Into Its Own Disinfectant

For millennia, the Middle East's water crisis seemed an immutable fact of geography — a region defined as much by what it lacked as by what lay beneath its sands. Today, a convergence of plummeting solar costs, advancing membrane technology, and hard-won engineering expertise is rewriting that story.

Should You Invest in the Private Market?

startustartup Unlike public stock exchanges, which offer daily trading, strict...

How to build a 100-year-company

Kongō Gumi is a Japanese construction company, purportedly founded in 578 A.D., making it the world's oldest documented company. What can we learn about building sustainable businesses from them?

From Pilot Plant to Global Stage: How Aduro Clean Technologies’ 2026 Expansion Signals a Turning Point for Chemical Recycling Investors Like Yazan Al Homsi

The company's Next Generation Process (NGP) Pilot Plant in London, Ontario, has officially moved into initial operating campaigns, generating the kind of structured, repeatable data that separates laboratory promise from commercial viability.

How AI Helps SaaS Companies Reduce Repetitive Customer Support Work

SaaS products are designed for large numbers of users with different levels of experience, and also in renewable energy.

Pulling Water from the Air

Faced with water shortage in Amman, Laurie digs up...

Turning Your Energy Consultancy into an LLC: 4 Legal Steps for Founders in Texas

If you are starting a renewable energy business in Texas, learn how to start an LLC by the books.

Tracking the Impacts of a Hydroelectric Dam Along the Tigris River

For the next two months, I'll be taking a break from my usual Green Prophet posts to report on a transnational environmental issue: the Ilısu Dam currently under construction in Turkey, and the ways it will transform life along the Tigris River.

6 Payment Processors With the Fastest Onboarding for SMBs

Get your SMB up and running fast with these 6 payment processors. Compare the quickest onboarding options to start accepting customer payments without delay.

Related Articles

Popular Categories