Kuwait Invites Private Sector to Bid for Construction of Three New Cities

Kuwait City, Kuwait - September 22, 2025 - The Kuwaiti government has officially invited both local and international companies to submit bids for contracts to design, build, and manage three entirely new cities, part of a major effort to address the country’s longstanding housing shortage. The announcement was published in Kuwait's official Gazette and marks the first major initiative under a groundbreaking 2023 real estate development law aimed at encouraging private sector investment in housing.

Transforming Kuwait’s Housing Sector

The ambitious project represents a shift in how Kuwait approaches urban development. The 2023 law enables the government to establish joint venture companies with private and international partners to design, finance, and deliver new housing communities. These developments will be sold to Kuwaiti citizens while commercial and non-residential assets will eventually be transferred back to government ownership.

The 30-year contracts will cover every stage of the project’s lifecycle, including design, construction, financing, operation, maintenance, and eventual sale of residential units. The agreement includes a four-year construction timeline, after which the projects will move into operational phases.

The new cities: Al Mutla'a City, East Saad Al Abdullah City, and West Saad Al Abdullah City, will be built to the north and west of Kuwait City, the capital. Collectively, the projects will span 300 hectares, making them among the largest urban developments ever undertaken in the country.

Alleviating Kuwait’s Housing Crisis

Kuwait has long faced a serious housing backlog, with approximately 100,000 citizens currently on the government’s waiting list for housing. The state provides homes for all Kuwaiti families, but demand has significantly outpaced supply. In some cases, families wait up to 17 years before receiving a house, creating growing social and economic challenges.

By leveraging private sector expertise and international investment, the government aims to reduce these wait times and meet the surging demand for quality housing.

According to the tender requirements, participating bidders must have at least 10 years of proven experience in delivering large-scale residential or mixed-use projects. This stipulation ensures that only qualified developers with the technical knowledge and financial capacity to manage projects of this magnitude will be considered.

Kuwait’s Improving Economic Outlook

The housing initiative comes at a time when Kuwait’s financial position is showing marked improvement. In August 2025, the Ministry of Finance announced that the country closed its 2024-2025 fiscal year with a budget deficit of $3.46 billion (KD 1.056 billion), significantly below the initially projected shortfall of $18.4 billion (KD 5.6 billion).

The previous fiscal year, 2023-2024, ended with a much larger deficit of $21 billion (KD 6.4 billion), highlighting the government’s recent success in boosting revenues and controlling expenditures.

For the fiscal year ending March 31, 2025, total revenues reached $72.2 billion (KD 22.06 billion), with oil revenues contributing $63.4 billion (KD 19.36 billion). This figure surpassed earlier projections of $61.9 billion (KD 18.9 billion) thanks to higher-than-expected global oil prices. Meanwhile, government expenditures totaled $75.7 billion (KD 23.11 billion), which was lower than the initially forecasted $80.2 billion (KD 24.5 billion).

Future Growth Prospects

Kuwait’s economy is forecast to grow by 2.5% during the 2025-2026 fiscal year, according to the World Bank’s latest outlook. This growth will be supported by stable oil production levels and continued strength in global oil prices.

The three new city projects are expected to play a pivotal role in Kuwait’s long-term development strategy by creating jobs, modernizing infrastructure, and providing sustainable housing solutions. Beyond addressing the housing shortage, these urban centers are envisioned as vibrant, mixed-use communities that will include residential, commercial, and recreational facilities.

With construction set to begin once contracts are awarded, the projects will bring together world-class developers and local expertise, marking a new era in Kuwait’s approach to urban planning and real estate development.

This initiative signals Kuwait’s determination to blend public vision with private innovation, delivering housing and infrastructure that meet the needs of its growing population while positioning the country for sustainable economic growth in the decades to come.