JEDDAH, 14 November 2005 — “Sustainability requires pursuing opportunities you’re best equipped to serve,” Saudi Arabian General Investment Authority (SAGIA) Governor Amr Al-Dabbagh, said here yesterday.

Delivering his keynote address at the Jeddah Water and Power Forum 2005 at the Hilton Hotel yesterday, Al-Dabbagh illustrated the Kingdom’s distinctive investment value proposition in water and power, and underlined the central theme of “pursuing opportunities one is best equipped to capitalize on.”

The session’s other highlights included a keynote address by Fehied Fahad Al-Shareef, who heads the Saline Water Conservation Corporation (SWCC), and a presentation by British Ambassador Sir Sherard Cowper-Coles.

The forum, which opened on Saturday, is being held with the support of Makkah Governor Prince Abdul Majeed. It ends today.

With a population forecast of almost 36 million by 2020, the Kingdom is slated as the water desalination and energy capital of the world, the largest per-capita water and power consumer in the world, and home to the best investment for water and power in the world,” Al-Dabbagh told the audience that included high-level international dignitaries.

SAGIA envisions rapid economic growth capitalizing on the Kingdom’s competitive strengths as the global capital of energy. “This vision is legitimate considering that the Kingdom holds one-quarter of the world’s proven oil reserves, one-fifth of the world’s total water treatment capacity and one-fourth of the world’s largest phosphate deposits,” he added.

An exhibition by forum sponsors and companies involved in the water and energy sectors is also running alongside the three-day event.

Realizing this potential and foreseeing a rise over the present four percent in water and power demand, the Supreme Economic Council’s resolution created a framework to promote private sector involvement in the water and power sectors via the Independent Water and Power Projects, IWPPs.

The growth of other energy sub-sectors will further drive demand for water and power. The year 2004 saw investment of over $10 billion in the Kingdom’s petrochemical sector and forecasts for the next decade indicate over $90 billion.

The Kingdom’s economic upsurge strengthens rapidly as the country diversifies through full capitalization of its resources. Despite complete lack of agriculture and irrigation and through leveraging the phosphate deposits, the Kingdom is expected to become the world’s third largest producer of fertilizers in the next decade.

Another sector directly proportional to the growth in power is the transportation sector, characterized by the Kingdom’s second competitive advantage due to its unique geographical location between East and West. “Most of the Gulf ports imports are re-exported to Saudi Arabia and the country makes for an ideal launch pad to a 270 million strong consumer market,” he said.

Following hot on the heels of the energy and transportation sector are the ICT and Knowledge Based Industries sector. SAGIA is aggressively driving the Kingdom’s investment strategy to become the global leader in water and power technology, and global provider of intellectual capital. The first step toward this goal is the creation of multiple centers of excellence and specialization around core competencies in certain segments of the water and power sector, such as IT energy applications.

The petrochemical industry has already set the lead as Saudi Basic Industries Corporation (SABIC’s) Riyadh R&D Center developed and commercialized an entirely new and Saudi-derived technology for manufacturing Acetic Acid from Ethane, the first of its kind worldwide.

The 4,500 increase in FDI in the second quarter of 2005 compared to the equivalent period in 2004, indicates the successes of SAGIA’s pro-business initiative with sister ministries and the one-stop-shop investment services for the investors.

In fact, the Kingdom leads Arab Countries in attracting foreign and Arab investments in 2004, according to a report. This achievement accomplished by the Kingdom stands as a witness for the strength of the Saudi economy.

The direct foreign investments in the Kingdom amounted in 2004 to $3.8 billion. This figure represented 23 percent of the total direct foreign investment in the Kingdom, which amounted to about $16.7 billion.

Ever since Al-Dabbagh took over as governor of SAGIA in March 2004, a new sense of urgency seems to be sweeping the corridors of power at the authority. To help achieve its aim of becoming a top ten global FDI location within the next five years, SAGIA is cooperating with the World Bank in conducting an evaluation of the investment environment in the Kingdom. The aim, according to SAGIA, “is to provide the appropriate scientific mechanism to measure and compare the progress made in the investment environment” and to set the priorities for achieving “competitive environment regionally and internationally”.

Despite a market flush with liquidity due to the high oil revenues as a result of high oil prices, the Kingdom is seeking funds for projects worth more than SR2.34 trillion ($ 624 billion) in vital sectors including petrochemicals, gas, railways, desalination and electricity.

The total amount invested during the first half of 2005 reached SR65 billion, the organization said in a report. The aim is to attract $ 1 trillion in FDI flows over the next 20 years.

SAGIA stresses that it is the current reform process in the Kingdom that has yielded the above dividends. A report published earlier this year by the International Finance Corporation, the private sector and capital markets investment arm of the World Bank Group, titled “Doing Business in 2006” rated the Kingdom as the best investment location in the Arab World and 38th out of 155 locations worldwide.

Marafiq, the Power and Water Utility Company for Jubail and Yanbu, is one of the sponsors of the forum. It is Saudi Arabia’s first private integrated utility company. In its nearly three years’ of operation, Marafiq has emerged as a major force in the fields of power and water across the Kingdom. “In a very short span of time, Marafiq turned out to be a key player in the growth and development of the country’s industrial sector,” Abdullah S. Al-Marei, president and CEO, said.

Marafiq has embarked on a dual-purpose independent water and power project (IWPP) in Jubail and Yanbu and the new ventures include initiatives in the new industrial areas of Jubail II and Yanbu II. The company plans to provide integrated services common to all customers in a plug-and-play concept designed to reduce capital costs.

Al-Shareef said the Kingdom had emerged as the biggest private producer of desalination water in the world. The Kingdom today boasts over 30 major desalination plants, he said and reviewed the SWCC’s vision and mission. “Our vision involves production and transmission, and our mission is to achieve economic and social growth,” he said. However, he added, “what’s more important is to strike a balance between supply and demand, and toward this end there is an urgent need for coordination among all public sector agencies and private investors.”

This is possible through sustained interaction among national and international experts, researchers, universities and industries, he emphasized, and mentioned the SWCC’s plan tot open a research center in Jubail on the east coast for national and international use. “Protecting the environment in the process of producing water is of utmost importance,” he added.

The British ambassador gave the British experience in the privatization of water and power sectors and said: “In the course of privatization, we learned lessons and made mistakes.”