ABB wins $150m orders to strengthen Saudi power grid

Updated 12 August 2015
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ABB wins $150m orders to strengthen Saudi power grid

JEDDAH: ABB, the leading power and automation technology group, has won orders worth around $150 million from the Saudi Electricity Company (SEC) to expand five existing substations, helping to ready the country’s transmission system for a 50 percent expansion of power generation capacity to accommodate a growing economy.
SEC, Saudi Arabia’s national power transmission and distribution operator, is increasing the capacity of the substations, with three located in the central region and one each in the eastern and western regions.
The orders were booked in the second quarter of 2015.
Economic growth in Saudi Arabia and the Gulf Cooperation Council (GCC) countries, primarily driven by oil and gas, necessitates a strong power infrastructure to secure a reliable electricity supply to growing industrial and commercial sectors in the region, as well as to households.
To meet this rising demand, Saudi Arabia is boosting its power generation capacity from less than 60 gigawatts (GW) to about 91 GW by 2020, and to more than double existing capacity over the longer term.
ABB is supporting these efforts through several projects across the country, including an additional $60 million order booked in the second quarter from SEC for 65 power transformers.
“We are privileged to continue supporting the development of Saudi Arabia’s power infrastructure,” said Claudio Facchin, president of ABB’s Power Systems division.
“These substations will strengthen the grid and enhance transmission capacity, enabling electricity to reach more consumers and support this growing market, in line with our Next Level strategy.”
The extension orders include design, supply, installation and commissioning of new switchgear bays at five existing transmission substations as well as modification of associated automation, control, protection and auxiliary power supply systems and connected transmission substations.
ABB’s gas-insulated switchgear has been in successful operation for more than three decades in one of these substations.
The ability to extend equipment working since the 1980s using state-of-the-art technology demonstrates the flexibility of this equipment to be adapted to changing demands.
ABB is the world’s leading supplier of turnkey air-insulated, gas-insulated and hybrid substations with voltage levels up to 1,100 kilovolts.
These substations facilitate the efficient and reliable transmission and distribution of electricity with minimum environmental impact, serving utility, industry and commercial customers as well as sectors like railways, urban transport and renewables.


Global exchange funds eye Saudi Arabian equities

Updated 55 min 47 sec ago
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Global exchange funds eye Saudi Arabian equities

  • It comes as the country joins the FTSE Russell emerging markets index
  • Index provider MSCI is also adding Saudi stocks to its own emerging markets index

LONDON: Global exchange-traded funds are building cash piles to place in Saudi Arabian equities, according to a ranking compiled by Bloomberg.
It comes as the country joins the FTSE Russell emerging markets index, which is expected to attract billions of dollars in foreign fund inflows.
“We believe Saudi’s inclusion in the FTSE Russell EM Index will have a significantly positive impact on stock markets, Salah Shamma, the regional head of investment at Franklin Templeton Emerging Markets Equity, told Arab News.
“With an estimated $115 billion benchmarked against the FTSE Russell EM Index, the Kingdom could constitute approximately 2.5 percent of the gauge, resulting in passive fund flows of about $3 billion,” he said.
A London-based exchange- traded fund (ETF) and another fund that trades in New York have together attracted around $327 million in new money since the beginning of January, Bloomberg reported on Tuesday.
The net flow as a percentage of assets for Saudi Arabia funds increased by about 48 percent this year.
FTSE Russell started to include Saudi stocks this week — the first of a five-stage process that will be fully implemented by March 2020.
Index provider MSCI is also adding Saudi stocks to its own emerging markets index.
Positions on the Saudi market through funds based abroad have delivered a return of about
12 percent each since the start of the year, compared with a gain of 10 percent for the Tadawul All Share Index, according to Bloomberg data.
Franklin Templeton’s Shamma believes the inclusion of Saudi equities in the two gauges will help to bring the wider region into the mainstream of emerging market investment.
“The fundamentals of the Saudi economy are strong, and we remain encouraged by the country’s progress in reducing its reliance on hydrocarbon revenues as well as the ambitious reform agenda that is underway there,” he said.
Listed companies in the Kingdom could see holdings by foreign investors rise to 10 percent when their shares are included in index providers MSCI and FTSE’s emerging-market indices, the chief executive of Tadawul told Reuters on Monday.
Saudi Arabia this week joined the FTSE Emerging All Cap Index with a weighting of 2.9 percent.
Khalid Al-Hussan told Reuters that he expected equities on Tadawul to attract $5 billion of passive fund inflows after the FTSE Russell inclusion. Foreign investors currently hold about 5.9 percent of Saudi shares.