DUBAI: Gulf governments are accelerating infrastructure transactions with foreign investors, as Kuwait prepares to launch the sale of a stake in its oil pipeline network as early as February, a deal that could raise up to $7 billion, sources familiar with the matter said. The push comes as oil prices — down more than 25% over the past two years — remain below levels needed to finance the region’s economic diversification plans. Governments are increasingly opening up assets once considered off-limits, including pipelines and power plants, to attract pension funds, private equity and infrastructure investors.
Bader Mousa Al-Saif of Kuwait University and Chatham House said the Gulf’s transformation programmes are too ambitious to be funded domestically alone, making the attraction of international capital essential.
For the Kuwait transaction, Kuwait Petroleum Corp has appointed HSBC, JPMorgan and Centerview Partners as advisers, with HSBC also arranging “staple financing” for potential buyers, sources said. Investor outreach has already begun. Separately, Saudi Aramco is preparing to sell several gas-fired power plants in a deal expected to raise about $4 billion in the coming weeks, according to sources.
More large-scale infrastructure deals are expected across the region over the next year, said Rajesh Singhi, Standard Chartered’s global co-head of M&A advisory. He added that a new wave of transactions is likely as additional assets are brought to market, supported by growing interest from specialised global investors and new capital pools such as pension and insurance funds.
Western investors are also expanding their presence in the Gulf. Canada’s Caisse de dépôt is seeking new regional infrastructure opportunities beyond its stake in DP World, while firms such as Australia’s Macquarie Group and U.S. asset manager BlackRock are strengthening local operations. BlackRock’s Global Infrastructure Partners last year led an $11 billion acquisition of Aramco midstream assets linked to the Jafurah gas project.
Beyond the power plant sale, Aramco may also divest assets including housing, pipelines and port infrastructure, sources said.
For state-owned companies, selling minority stakes frees up capital for growth projects while maintaining operational control. Despite access to low-cost borrowing, national oil firms are pursuing these transactions to diversify funding sources and attract long-term institutional investors.
Pipeline deals typically involve minority holdings in ring-fenced entities supported by long-term lease payments, delivering returns of around 12% to 14%, according to sources. Kuwait’s transaction is expected to follow a similar structure, with the government retaining majority ownership and daily control. These models have also fostered an active secondary market for infrastructure assets, analysts noted.
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