On November 25, 2024, Al-Babtain Power and Telecommunication Company, a leading Saudi Arabian manufacturer of power transmission towers, announced the signing of a major contract with Hyundai Engineering & Construction. The agreement, valued at SAR 777.22 million, approximately $207 million, involves the supply of steel towers for a 500-kilovolt High Voltage Direct Current Overhead Transmission Line. The project will contribute significantly to the development of Saudi Arabia's national energy grid, reinforcing the country’s commitment to improving its electricity infrastructure. The contract will span 24 months, with the supply of the steel towers expected to begin in the third quarter of 2025.
HVDC technology is a key part of modern energy systems, enabling the efficient long-distance transmission of electricity. Unlike traditional alternating current transmission lines, HVDC systems can carry power over vast distances with minimal losses, making them ideal for connecting remote renewable energy sources or integrating different regional grids. The 500 kV HVDC line in this project will help strengthen the overall electricity distribution network in Saudi Arabia, providing greater reliability and capacity to meet the growing demand for power across the kingdom.
The scope of the project involves Al-Babtain Power supplying a series of robust steel towers that will support the overhead transmission lines. These towers must be designed to withstand extreme weather conditions and the high electrical loads associated with HVDC transmission systems. As one of the region's leading suppliers of transmission infrastructure, Al-Babtain’s expertise in manufacturing durable, high-quality steel towers is a key reason the company was selected for this important project. Al-Babtain Power’s involvement in the project is expected to play a central role in enhancing the transmission capacity of Saudi Arabia's energy grid, which is a critical element in the country's Vision 2030 plan to modernize its infrastructure and diversify its energy sources.
The agreement also signals the strengthening of ties between Al-Babtain Power and Hyundai Engineering & Construction, a global player in the construction and engineering sectors. Hyundai’s experience in large-scale infrastructure projects combined with Al-Babtain’s local manufacturing capabilities creates a powerful partnership for the successful execution of this contract. The project aligns with Saudi Arabia's broader ambitions to expand and modernize its energy networks, including efforts to integrate renewable energy into the grid and improve energy efficiency nationwide.
Al-Babtain Power has stated that the financial impact of the contract will be reflected in the company’s financials starting in the first quarter of 2026. While the majority of the contract’s revenue will be earned over the two-year duration, the long-term benefits are likely to extend well beyond the project's completion, with potential follow-up contracts in the expanding energy infrastructure sector. As the supply of the steel towers begins in Q3 2025, the project will create substantial opportunities for local employment in manufacturing, logistics, and project management, further contributing to the economy.
Saudi Arabia’s energy sector has been undergoing rapid transformation, driven by the kingdom's Vision 2030 objectives. The development of HVDC lines like the one covered in this contract plays a pivotal role in creating a more reliable, flexible, and sustainable energy grid. The towers that Al-Babtain will provide are expected to be a crucial element in improving the efficiency of the grid, particularly as the country continues to integrate more renewable energy sources such as solar and wind power into its national grid.
This deal is also a sign of increasing foreign interest in Saudi Arabia's power infrastructure, as the kingdom continues to attract international companies like Hyundai Engineering & Construction. These partnerships not only bring technical expertise and high-quality products to the region but also support Saudi Arabia's goal of reducing its reliance on oil by investing in renewable energy and modernizing its power networks. As the project progresses, the cooperation between local and international companies will likely set the stage for similar future initiatives, contributing to the long-term sustainability and growth of Saudi Arabia's energy infrastructure.
In summary, Al-Babtain’s contract with Hyundai Engineering & Construction marks a significant milestone for the Saudi Arabian energy sector. The project will provide critical infrastructure for a new 500 kV HVDC transmission line, boosting the country's capacity to distribute power efficiently and reliably. As the project unfolds, it will not only enhance the energy grid but also create long-term economic benefits, including job creation and further investment opportunities in the kingdom’s energy infrastructure.
