Saudi Arabia and the United Arab Emirates have agreed to work toward connecting their power grids and railways. The two countries signed a memorandum of understanding in Dubai on Thursday. Saudi Energy Minister Prince Abdulaziz bin Salman and UAE Investment Minister Mohamed Hassan Alsuwaidi signed the document, which sets up a framework rather than a funded project.
On electricity, the two governments will establish general principles for linking their grids and for exchanging and selling power across the border. Before any of that happens, technical, economic and environmental studies must assess whether interconnection is feasible and on what terms. The agreement also commits both countries to coordinate with other Gulf Cooperation Council members on expanding the GCC Interconnection Grid, the regional network that already allows member states to trade electricity, under the GCC’s existing agreement on grid interconnection.
The rail portion follows the same pattern. The memorandum lays out principles for cross-border rail connectivity and for the two-way transport and transit of goods and freight between the two countries. No route, cost or construction schedule has been announced. What exists today is an agreement to plan, not a contract to build.
For businesses, the practical significance is in how the work is organised from here. Power producers, grid operators and rail contractors in both countries can expect joint studies to define the scope of any eventual infrastructure. Companies that move goods between the two economies would be the direct beneficiaries if a rail link follows, since freight currently travels by road. On the power side, a connected grid would let the two systems trade electricity, though the studies will determine whether that makes commercial sense.
