Saudi Arabia and the UAE signed a memorandum of understanding on Thursday to strengthen cooperation on power grid interconnection, electricity trading and rail connectivity, Saudi state news agency SPA reported.

Under the memorandum, the two countries will establish broad principles for connecting their power grids and exchanging and selling electricity, as well as carry out technical, economic and environmental studies, it stated.

The agreement was signed by Saudi Energy Minister Prince Abdulaziz bin Salman and UAE Investment Minister Mohamed Hassan Alsuwaidi in Riyadh.

The countries will also coordinate with other Gulf Cooperation Council members on expanding the GCC Interconnection Grid under the bloc's existing agreement governing grid interconnection.

The memorandum also sets out plans for cooperation on rail connectivity to facilitate the two-way transport and transit of goods and freight between Saudi Arabia and the UAE, SPA said.

The measures are aimed at improving energy-system efficiency, logistics and supply chains and strengthening regional economic integration, it added.