$658m deal signed to supply power to 210,000 homes in South Africa

The Kingdom is the biggest supplier of crude to South Africa, accounting for about 47 percent of its requirement. (Photo: twitter)
Updated 27 October 2018
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$658m deal signed to supply power to 210,000 homes in South Africa

  • The agreement provides a framework for investment cooperation and will promote investment relations

RIYADH: Saudi company ACWA Power, which operates in the fields of power generation and desalination in more than 10 countries, has announced plans to invest $658 million in South Africa.
An announcement on Friday said this will help to boost trade and investment links between Saudi Arabia and the African continent.
Under the terms of the agreement, the Central Energy Fund of South Africa and ACWA Power will cooperate on the joint power project to be set up in South Africa. This is in addition to the pledge made by the Kingdom to invest $10 billion in South Africa. This pledge was made during the visit of South African President Cyril Ramaphosa to the Kingdom in July this year, when he met King Salman.
Speaking about the investment, Mohammad Abunayyan, chairman of ACWA Power, said: “We are pleased to enter into this agreement, which further strengthens our efforts supporting South Africa’s renewable energy program.”
“ACWA Power will build the 100MW Redstone concentrated solar thermal power (CSP) plant and will be capable of supplying power to 210,000 homes once operational,” South African Minister of Trade and Industry Dr. Rob Davies said in a recent statement.
He said that South Africa derives much of its power generation from coal, but it is also dependent on imported oil. The Kingdom is the biggest supplier of crude to South Africa, accounting for about 47 percent of its requirement.
“South Africa and Saudi Arabia maintain good political and economic relations and cooperate in a number of sectors. Saudi Arabia continues to be a close ally and South Africa’s strategic partner in the Middle East,” Davies said. “South Africa looks forward to new trade and investment opportunities, and to setting up joint ventures with Saudi companies.”
The statement said that the Saudi-South African Joint Economic Commission meeting, attended by Davies early this month, reached an agreement to cooperate in several areas ranging from energy, industry, mineral resources, finance and banking, to agriculture, tourism and transport.
The joint commission meeting also focused on investment in the energy sector by Saudi Arabia in South Africa. The investment relationship between South Africa and Saudi Arabia has been further strengthened with the signing of an investment cooperation agreement between Invest South Africa and Saudi Arabia General Investment Authority (SAGIA) recently. The agreement provides a framework for investment cooperation and will promote investment relations.


Saudi Arabia to introduce new tobacco license law

Updated 6 min 42 sec ago
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Saudi Arabia to introduce new tobacco license law

  • Annual license will cost more than $26,000
  • New law could lead to more vaping, says expert

JEDDAH: Cafes and restaurants in Saudi Arabia will have to pay up to SR100,000 ($26,675) a year to sell tobacco products inside and outside their premises, after the Cabinet approved the proposed regulations and fees for a new licensing law.

Saudi Arabia was one of the first countries to ratify the World Health Organization (WHO) Framework Convention on Tobacco Control in 2005, an ambitious plan to reduce smoking rates from 12.7 percent to 5 percent by 2030.

The Health Ministry has taken steps to curb smoking through awareness campaigns and cessation clinics. Taxes on cigarettes doubled in 2017, leading to a 213 percent increase in smokers seeking help to kick the habit in the months that followed.

Saudi restaurant owner Hassan Moriah supported the Cabinet decision, although he said customers would be hit the hardest.

“Every restaurant and café manager should be licensed to provide this service. I believe all restaurants and cafés will support this decision too, but I believe the only people who will be affected by this decision are the customers,” he told Arab News. “All outlets will raise the price of hookahs. The actual people who would be paying for it to reach SR100,000 are the customers and not the cafés. Yes, there will be people who cannot afford to pay the new prices and they may have to cut down on their hookah consumption.”

The new law would also affect places that were not so popular, he added.

Associate professor of history at Middle Tennessee State University Dr. Sean Foley, who is writing a book on smoking in Saudi Arabia and the wider Muslim world, said the new law was part of the Kingdom’s attempts to address a serious health crisis while also meeting a goal of the Vision 2030 reform plan to move away from non-oil revenues.

“While raising cigarette taxes is a proven strategy for reducing smoking, the new SR100,000 annual fee for Saudi restaurants to permit patrons to smoke may be even more important,” he told Arab News. “Many restaurants may not be able to afford to pay for such an expensive permit, so there is likely to be less smoking in restaurants. That would mean there will be fewer people exposed to second-hand smoke in restaurants, itself a serious problem, and existing smokers would have a powerful new incentive to quit. Studies have consistently shown that creating smoke-free areas is one of the most powerful tools to motivate and help existing tobacco users to quit while preventing new smokers from picking up the habit.”

"The academic, who has written "Changing Saudi Arabia: Art, Culture, and Society in the Kingdom" published this year, said the Kingdom had some of the highest smoking rates in the world.

He added that the problem was getting worse as the number of smokers in Saudi Arabia was expected to rise from six million to 10 million in the coming years.

He warned that while there was the danger of a rise in smuggling and other black-market activities — because of the higher costs associated with smoking — there were other challenges too.

“The real danger is not the rise in black-market activity but that Saudis will continue to switch in large numbers to a product that is currently legal to use — vaping. While purchasing any of the products associated with vaping is illegal in the Kingdom, it is legal to vape in public and many Saudis buy vape juice and vape modules online.”