Saudi Arabia aims to be world’s largest renewable energy market

Updated 23 July 2013
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Saudi Arabia aims to be world’s largest renewable energy market

Saudi Arabia aims to become the world’s foremost market for renewable energy with an aggressive investment budget of $109 billion. By 2032, the country strives to generate as much as a third of the Kingdom’s energy demands using renewable energy (54 GW).
Following the publicity surrounding the country’s major investment drive, King Abdullah City for Atomic and Renewable Energy (KACARE) released a series of documents detailing the revised National Energy Plan. In addition to the 41 GW of solar power, 25 GW of CSP and 16 GW of PV, the Kingdom is aiming to generate 18 GW of nuclear energy, 3 GW of waste to energy, 1 GW of geothermal and an additional 9 GW of wind power, specifically for water desalination plants.
Impressive and noble though the country’s renewable energy goals maybe, the question remains how will the world’s largest exporter of oil, so dependent on conventional energy sources for their power demand, achieve such a transformation.
Establishing a time-line with long-term policies is at the top of the list.
According to Keisuke Sadamori, director of the energy markets and security directorate, International Energy Agency (IEA), "One of the key messages from the Medium Term Renewable Energy Market Report 2013 by the IEA is that policy uncertainty is the largest risk for renewable investment. Every country, including Saudi Arabia, should introduce long-term policies to provide a predictable and reliable framework to support renewable deployment."
Sadamori, alongside various other international and regional renewable energy experts, will be discussing the key challenges faced by Saudi Arabia and the steps toward overcoming them at the upcoming 3rd Annual Solar Arabia Summit. Taking place on Sept. 29-30 in Riyadh, the summit is hosting 35 experts who will each share their experience in the industry and discuss the latest market trends and policy development in the Kingdom.
Rasheed M. Alzahrani, CEO, Riyadh Valley Company, is also speaking at the summit to discuss joint ventures, partnerships and investments in renewable energy in the Kingdom.
He also acknowledges that "high level plans are already in place, but the major challenge in the Kingdom lies in the absence of a detailed time-line for a clear and gradual shift to renewable energy in the country and the slow adoption and advancement in renewable energy initiatives."
When asked about his company’s participation in the summit, Alzahrani said: "We intend to invest in this sector both in early and late stage opportunities that will add value to the local needs. We will use this platform to introduce RVC and its initiatives and to help foster the development of an energy ecosystem in KSA."
Alongside the summit’s conference agenda, 250 Saudi energy stakeholders are attending to have one-to-one business meetings with up to 40 international solution and service providers.
Confirmed participants include Schneider Electric, Total, Sterling and Wilson, SMA Technology and Trishe Renewables.


Dubai real estate market recovery to be seen as of 2022: S&P

Updated 20 February 2019
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Dubai real estate market recovery to be seen as of 2022: S&P

  • The outlook on property was part of a challenging assessment of the credit-worthiness of the emirate
  • S&P was generally comfortable with the credit ratings of the emirate’s banking system

DUBAI: S&P Global, the ratings agency, painted a grim picture for the real estate sector in Dubai, with a meaningful recovery in property prices expected only after 2022.
At a presentation to journalists in the Dubai International Financial Center, S&P analyst Sapna Jagtiani said that under the firm’s “base case scenario,” the Dubai real estate market would fall by between 5 and 10 percent this year, roughly the same as the fall in 2018, which would bring property prices to the levels seen at the bottom of the last cycle in 2010, in the aftermath of the global financial crisis.
“On the real estate side we continue to have a very grim view of the market. While we expect prices to broadly stabilize in 2020, we don’t see a meaningful recovery in 2021. Relative to the previous recovery cycle, we believe it will take longer time for prices to display a meaningful recovery,” she said.
S&P’s verdict adds to several recent pessimistic assessments of the Dubai real estate market. Jagtiani said that conditions in the other big UAE property market, in Abu Dhabi, were not as negative, because “Abu Dhabi never did ramp up as much in 2014 and 2015 as Dubai.” S&P does not rate developers in the capital.
She added that a “stress scenario” could arise if government and royal family related developers — such as Emaar Properties, Meraas, Dubai Properties and Nakheel — which have attractive land banks and economies of scale, continue to launch new developments.
“In such a scenario, we think residential real estate prices could decline by 10-15 percent in 2019 and a further 5-10 percent in 2020. In this case, we expect no upside for Dubai residential real estate prices in 2021, as we expect it will take a while for the market to absorb oversupply,” she said.
S&P recently downgraded Damac, one of the biggest Dubai-based developers, to BB- rating, on weak market prospects.
However, Jagtiani said that, despite the “significant oversupply” from existing projects, several factors should held stabilize the market: Few, if any, major product launches; improved affordability and “bargain hunting” by bulk buyers; and a resurgence of Asian, especially Chinese, investor interest in the market.
Jagtiani also said that government measures such as new ownership and visa regulations and reduction in government fees could help prevent prices falling more sharply, as well as “increased economic activity related to Dubai Expo 2020, which is expected to attract about 25 million visitors to the emirate.”
The outlook on property was part of a challenging assessment of the credit-worthiness of the emirate. “In our view, credit conditions deteriorated in Dubai in 2018, reducing the government’s ability to provide extraordinary financial support to its government related entities (GREs) if needed,” S&P said in a report. “The negative outlook on Dubai Electricity and Water
Authority (DEWA) partly reflects our concern that a real estate downturn beyond our base case could out increased pressure on government finances,” the report said.
It pointed out that about 70 percent of government revenues come from non-tax sources, including land transfer and mortgage registration fees, as well as charges for housing and municipality liabilities, as well as dividends from real estate developers it controls, like Emaar and Nakheel.
S&P was generally comfortable with the credit ratings of the emirate’s banking system, which has an estimated 20 percent exposure to real estate. “Banks in the UAE tend to generally display a good level of profitability and capitalization, giving them a good margin to absorb a moderate increase in risks,” the report said.