Solar energy: Saudi Arabia is shining as key growth market

Solar energy: Saudi Arabia is shining as key growth market
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Solar energy: Saudi Arabia is shining as key growth market
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Updated 03 April 2013

Solar energy: Saudi Arabia is shining as key growth market

Solar energy: Saudi Arabia is shining as key growth market

Saudi Arabia is planning to invest $ 109 billion over the next 20 years in order to take advantage of its excellent solar resources and diversify its energy mix, according to Alexander Lenz, president — the Middle East and Southeast Asia region, Conergy Asia & ME Pte. Ltd. This is because the “Kingdom believes sustainable energy is imperative for its future growth,” Lenz told Khalil Hanware of Arab News in an exclusive interview.
“They (the Kingdom) plan to purchase electricity generated not only from solar resources (PV and solar thermal) but also wind, geothermal and waste-to-energy plants. Their cumulative target of renewable capacity is anticipated to be more than 54,000 megawatts by 2032 with 41,000 coming from solar,” said Lenz, who previously held senior corporate management roles with Conergy AG as VP of business development.

Following are excerpts from the interview:

Currently, many solar plants are under construction in Saudi Arabia with a total capacity of some 15 megawatts. How is Conergy contributing to the expansion of solar energy in the country?
To date, Conergy has built 2 projects in Saudi Arabia. In 2010, Conergy erected the first large scale solar system in the Kingdom, at 2 megawatts on the roof of the King Abdullah University of Science and Technology (KAUST) in Thuwal. Since then this plant has over-performed by +6.7 percent and has also served as a learning tool for the students at the university. In 2012, Conergy built a rooftop system for the King Abdullah Financial District (KAFD) in Riyadh. With this solar system, the KAFD has chosen sustainable architecture with the aim of achieving one of the most significant eco certifications in the world - the LEED Gold certification awarded by the US Green Building Council. At close to 200 kilowatts, the KAFD solar plant will not only be the first but also the largest rooftop plant in Riyadh. With these 2 live projects Conergy has demonstrated that solar PV as a technology is suitable for Saudi Arabia and can easily be integrated into the built environment. One key learning that has surfaced in these projects is that it is best to consider including solar systems very early on in the planning process, even as the main building design is still being drawn up rather than at a later stage. Last minute decisions to include a solar installation while the building structure is still being erected by other contractors can prove to be difficult and can cause delays. Furthermore, not many general contractors in the country are familiar with the solar PV technology yet. This is one area we've tried to work on.

The KAFD will be reducing its dependence on the Kingdom's oil reserves and relying on solar technology from Conergy for a portion of its energy requirements. How is your solar project working with KAFD?

Conergy collaborated with local partner Modern Times Technical Systems (MTTS) in the KAFD project where over 800 Conergy PowerPlus modules have been installed. Installation of the modules is complete but the plant's commissioning is slightly delayed as the building housing the modules is still under construction. But the solar system is expected to be commissioned in the next few months. With this project, the KAFD has chosen sustainable architecture with their pursuit of the LEED Gold certification awarded by the US Green Building Council. At close to 200 kilowatts, the solar plant will not only be the first but also the largest rooftop plant in Riyadh. Once the system is completed, over 330 megawatt hours of clean energy will be generated each year - enough to power 1,500 computers in the financial centre. The solar plant will prevent the emission of 180 tons of the damaging greenhouse gas CO2 annually.

What future does Conergy see for Saudi Arabia in the global renewable energy market?

Conergy sees Saudi Arabia as one of its key growth markets. It will be very important for our future, which is why we are supporting this market. We not only have an office in the UAE but are also working toward building a regional training center in the region to increase public and professional awareness of solar energy. Sustainable energy is imperative for the long term, and Saudi Arabia is planning to invest $ 109 billion over the next 20 years in order to take advantage of its excellent solar resources and diversify its energy mix. They plan to purchase electricity generated not only from solar resources (PV and solar thermal) but also wind, geothermal and waste-to-energy plants. Their cumulative target renewable capacity is anticipated to be more than 54,000 megawatts by 2032 with 41,000 coming from solar. The Kingdom's renewable energy plans currently prioritize large utility-scale renewable power plants, but they also plan to promote small off-grid plants. With these large scale solar power developments, Saudi staff will benefit from technology transfer and will be trained in these renewable energy technologies.

How does Conergy provide support to companies in the Middle East on this new path toward sustainability?

With our 2 live projects, Conergy has demonstrated that solar PV as a technology is suitable for Saudi Arabia and can easily be integrated into the built environment. We realize that not many general contractors in the country are familiar with the solar PV technology yet. This is one area we've tried to work on. Since entering the Saudi Arabia market in 2008, we've partnered with a number of local companies and also opened an office in the UAE to serve the wider Middle East market. As such, we've been present in the country since the solar market was still in a very early stage and we have managed to develop a strong network of reliable partners.

What is Conergy's KAUST project in Thuwal?
At 2 megawatts, the solar PV rooftop installation built by Conergy at the KAUST in Thuwal was the first large scale solar system in the Kingdom when it was commissioned in 2010. The rooftop solar installation is installed on the north and south laboratories of the university. It features premium components, combining over 9,300 high efficiency solar modules with Conergy Suntop III mounting systems and Conergy 280K central inverters. The photovoltaic plant occupies 11,577 square meters of roof space and produces 3,332 megawatt hours of clean energy annually, while also saving up to 3,320 tons of carbon emissions. This equates to carbon offsets of approximately 6,000 circumnavigations of the world by car. After its first full year of operations, the electricity produced from this plant exceeded its expected simulated yield by +6.7 percent.

Since it was founded in 1998, Conergy has sold more than 1.6 gigawatts of solar energy. Who are Conergy's customers and where?

Thanks to Conergy's early entry into the most important global growth markets, our sales teams are active in 40 markets on 5 continents. Our customers are all over the world in all important growth markets. We think global and act local. Our sales teams possess a profound knowledge of the local markets and have developed a close-knit and well-established network of installers, wholesalers and partners on one hand and financial investors and businesses on the other. In that way, we are always close to our customer. Our customer groups differ depending on the region and the respective market conditions. In the very mature European solar markets for example, there is a trend toward rooftop installations whereas in the growth markets such as the Middle East, Asia-Pacific or America, large-scale PV power plants prevail. In some countries like Australia or Malaysia, solar is subsidized through feed-in tariffs. In many countries in the Middle East there are public tender procedures and in countries like Thailand and the United States the markets work via licenses and power purchase agreements of the public utilities. Depending on these different market conditions, Conergy's customer groups range from wholesalers and installers who serve the end-customers to equity partners, financial investors, family-run businesses, large companies as well as the public sector and institutional investors. Conergy has now produced and sold more than 2.2 GW of clean solar energy, and not just 1.6 GW.

What is Conergy's strategy in renewable energy markets of the future?

On the way toward grid parity, the solar market is undergoing a very significant change at present. Boosted by the sharp fall in system prices over the past few years and the continuous reduction in subsidies, it is moving away from a purely investment-driven, profit-oriented market toward a genuine energy market. Conergy has two main focal points: In Europe, Conergy focuses on rooftop plants that are already competitive compared to energy from the grid. In the Asia-Pacific and Middle East region as well as in other growth markets, the emphasis is on large-scale plants. The availability of energy is the key since these countries have to meet the rising local energy demand. The energy needs have risen tremendously in India and in the Middle East. In many of these countries, solar energy is a very attractive and cost-effective way to produce energy. For a number of Asian countries, investments in photovoltaics is cheaper in the long term than the import of energy and in some countries, grid parity has already been reached or is very close to being achieved. Grid parity is already a reality today, a fact that is illustrated by 14 Conergy pilot projects in Spain and another two installations in Australia. There, the solar plants on the roofs for some of the projects we've worked on are already cost-effective even without any solar subsidies thanks to nearly 100 percent of own consumption (power generated by the residence or commercial owner is consumed by the same entity). During the day, the plant owners need virtually no electricity from the grid and thus save around 30 percent of their energy costs. At night, the plant owners continue to draw their electricity from the grid; but with a "net metering" concept (which offsets self-consumed energy and electricity fed into the grid with the electricity consumed from the public grid, for instance at night) similar to what is already implemented in Italy. In the future, the solar plant will not just be a financial product for the customer as an "investor," which is meant to produce the highest possible profit from feed-in tariffs fixed for 20 years. Instead, it will also be the power plant on the roof of the customer in the role of "consumer," which supplies clean energy for their household, makes them independent and saves them money at the same time, even beyond the 20-year period.

Conergy is listed on the Frankfurt Stock Exchange since 2005. What has been the performance of Conergy in the stock market for the last seven years?

Conergy's IPO was in 2005 and the performance of the shares in the first couple of years was very successful. However, the excessive overcapacities in the industry and the resulting price pressure it created as well as the general consolidation process of the entire solar industry negatively influenced the share prices of listed solar companies in the past. These developments also affected the performance of Conergy's shares.

Conergy distributes its product portfolio through a network of partners and wholesalers. Can you explain?

In Asia and the rest of the world, Conergy builds turnkey solutions for solar installations larger than 500 kilowatts. For these installations, the solar experts offer all services from the planning and engineering, to the supply of the components and the installation of the power plants, operation and maintenance, the technical and commercial management, output insurance and extensive warranties. For installations below 500 kilowatts, a segment Conergy pursues in Europe, North America and Australia, Conergy closely collaborates with its network of partners and installers. Through this channel, Conergy has successfully served more than 10,000 customers. However, the installer network is not just a normal distribution channel for components, it goes far beyond. Through its partners, Conergy has access to the small roofs, to the end-customers and can thereby access and participate in the decentralized energy market. This is a key to success in the complex and very mature solar markets all over Europe since here most installations are being built on private and commercial rooftops. When it comes to the professional and precise planning of a solar plant, Conergy supports its partners: With the online-based planning tool "Conergizer," a software designed for small systems, the installers save a lot of time and enjoy an efficient planning process - from 3D visualization of the installation, assessing shading caused by obstacles on the roof, electrical or static planning and the selection of the components for calculation of profitability. This service is available 24/7. Conergy's partners have planned more than 30,000 installations with this planning tool. Through the Conergy Academy, the PV solution and service provider offers its partner network extensive trainings in all areas as well as technical support on the construction site and on the phone. On site, the logistics is coordinated by Conergy and the components are being delivered at any time desired by the installer. On completion, Conergy offers monitoring solutions as well as operations and maintenance services, warranties and/or output insurance.

How many projects Conergy has done in Saudi Arabia and globally?

Conergy has been involved in two major projects in Saudi Arabia to date, and globally it has advised more than 10 000 customers since being founded 14 years ago. Since then Conergy has produced and sold more than 2.2 GW of clean solar energy. We have learned a lot in the process - about sun, wind and weather on all five continents, as well as the high standards required by our international customers. Today, Conergy offers any private customer, enterprise and investor all-round peace of mind and perfection. Our solar projects are in different countries, including Greece, Germany, Spain, South Korea, the UK, and France.


Mideast's largest mall operator to expand amid vaccine hopes

Mideast's largest mall operator to expand amid vaccine hopes
Updated 52 sec ago

Mideast's largest mall operator to expand amid vaccine hopes

Mideast's largest mall operator to expand amid vaccine hopes

DUBAI: The Middle East's largest operator of malls expects revenue and earnings to climb back to pre-pandemic levels by the end of next year and is moving full steam ahead with plans to develop its biggest mall ever.
In a wide-ranging interview with The Associated Press on Thursday, Majid Al Futtaim CEO Alain Bejjani said business is steadily rebounding amid vaccine rollouts in some countries of the region, kicking 2021 off to a relatively strong start.
“We’re not out of the woods across the markets, but things are improving,” Bejjani said. “Going back to the pre-pandemic levels— to 2019 level— in my opinion, will happen by the end of 2022 in terms of financial results."
The company's plethora of retail and leisure holdings include the iconic Mall of the Emirates in Dubai, hundreds of VOX cinema screens and more than 350 Carrefour grocery stores in the Middle East and beyond. Named after its Emirati billionaire founder, the company's largest markets are the United Arab Emirates, Saudi Arabia and Egypt, but its reach extends as far as Pakistan, Kenya and Uzbekistan.
The company's projections of a rebound and its plans for expansion reflect the faster than anticipated recovery of Middle East economies from the coronavirus pandemic, though uneven vaccine distribution remains a concern.
Majid Al Futtaim, which employs some 43,000 people regionally, saw its revenue fall by 7 percent to $8.9 billion last year and earnings drop by 19 percent to around $1 billion due to coronavirus lockdowns and restrictions. The hardest-hit side of the business was its leisure and entertainment arm, where revenue fell by 49 percent to $380 million and earnings plummeted by 122 percent, resulting in losses of $25 million.
Despite last year's slump, Majid Al Futtaim plans to unveil 30 new movie theater screens this year in Saudi Arabia, is developing it’s biggest mall project ever in Riyadh, and is opening what will be the largest mall in Oman at the end of 2021.
“Every country has had their own set of challenges to deal with. The reality is the fastest recovery is the UAE... and we expect very fast recoveries in other markets like Saudi Arabia,” Bejjani said. “We have also seen Egypt being very resilient.”
The United Arab Emirates has rapidly rolled out COVID-19 vaccines, which are free of charge for citizens and residents. Saudi Arabia is also expanding its vaccination rollout and has offered all residents free coronavirus treatment since the start of the pandemic.
It's not back to business as usual just yet, though. Majid Al Futtaim— like many businesses globally— is having to adjust to new realities, including the potential imposition of so-called “digital passports." In Bahrain, for example, where Majid Al Futtaim operates 30 cinema screens, only people who've been vaccinated or recently recovered from COVID-19 will be allowed into cinemas, gyms and other select spaces soon.
Bejjani said the company is “very supportive of any measure” that gives customers the feeling of being safe.
“Whenever there is an additional regulation, that actually gives people even more certainty, I think this is a plus, whether it is the vaccine passport, whether it is something else,” he said. “At the end of the day, what’s important is that people want to go back to normal. People want to go back to consumption.”
The company's rapid growth and expansion since its inception in 1992 mirrors that of its home base of Dubai, where a frenetic construction boom has transformed it from a fishing village into one of the most talked about modern cities in the world. The company's economic rebound is also closely tied to that of Dubai's, where the International Monetary Fund expects the country's overall economy to grow this year by 3.2 percent.
At the height of the pandemic last year, Dubai imposed a 24-hour curfew and government-mandated permits were needed to leave the house. Even then, Majid Al Futtaim's Carrefour supermarkets remained busy.
Because the United Arab Emirates imports most of its produce, meat and poultry, Majid Al Futtaim’s policy of stockpiling a three months’ supply of basic goods proved crucial when nervous shoppers in Dubai rushed to stock up on goods during the first days of growing restrictions on movement.
In the wake of 2020, Bejjani said the company is in conversation with the government of the UAE to increase stockpiles of certain products up to six months. The company is also working with 6,000 local farmers to increase production of fruits and vegetables, while also supporting farmers as far away as Kenya to ensure a diversified supply of fresh food for its UAE stores. A half dozen Carrefours in the UAE began growing their own lettuce and herbs in hydroponic farms last year, Bejjani said.
The company's Carrefour business across the region saw earnings grow by 14 percent to $440 million last year, even as revenue slightly fell. That was due in part to the company's overall 188 percent increase in online sales as people moved toward grocery delivery services.
By the end of last year, the company also saw more visitors returning to its malls and cinemas.
Majid Al Futtaim’s crown jewel in Dubai is the Mall of the Emirates, home to an indoor ski slope and the world’s busiest Carrefour supermarket. A recent walk through the mall showed it's cafes, restaurants and stores teeming with visitors. Still, there were also many shuttered storefronts - evidence of the economic slowdown that had hit Arab Gulf oil exporting nations even before the pandemic.
The region's many sprawling luxury malls aren't just for shopping, though. They offer an escape for millions of people seeking respite from the long summer months. Bejjani said despite some store closures across its malls, there continues to be “big demand” in the Gulf for more entertainment and retail spaces.


ESG investing makes business sense: Saudi PIF chief

ESG investing makes business sense: Saudi PIF chief
Updated 28 min 26 sec ago

ESG investing makes business sense: Saudi PIF chief

ESG investing makes business sense: Saudi PIF chief
  • The PIF has already incorporated ESG principles into its $400 billion worth of global investments as the sector gains in prominence throughout the region

RIYADH: Saudi Arabia’s Public Investment Fund (PIF) Governor Yasir Al-Rumayyan said that environmental, social, and governance (ESG) programs made solid business sense in the Kingdom and worldwide.
“Such action not only helps in protecting climate but also helps economically,” he said during the Future Investment Initiative (FII) Institute’s ESG virtual event on Thursday.
The PIF has already incorporated ESG principles into its $400 billion worth of global investments as the sector gains in prominence throughout the region.
Al-Rumayyan, who also chairs the FII Institute, said that ESG investing should grow in tandem with the sustainable development goals (SDGs) which were adopted by UN member states in 2015 as a universal call to action to end poverty and protect the planet.
“We need to work together on mobilizing ESG for a sustainable future,” he told delegates.
Developing the renewable energy sector was crucial to reducing emissions, he said, highlighting the Fund’s work with ACWA Power, a leading global player in the renewables sector. The PIF in November increased its stake in the company to 50 percent, part of a move to support the wider renewables sector in the Kingdom.
ACWA Power is planning an initial public offering and heads a consortium that will build and operate renewable power-based utilities at the Kingdom’s flagship Red Sea tourism project.
Al-Rumayyan also referred to the Saudi Green Initiative and Middle East Green Initiative to reduce carbon and contribute to protecting the planet as an example of the Kingdom’s progress, which were announced by Crown Prince Mohammed bin Salman in late March.
The green initiatives aim to reduce carbon emissions by 60 percent in the region and deliver the world’s biggest afforestation project. The tree-planting project will be double the size of the Great Green Wall in the Sahel region, the second-biggest regional forestry initiative. The initiative will also work to increase the percentage of protected land to more than 30 percent, exceeding the global target of 17 percent per country.
It aims to reduce carbon emissions by more than four percent of global contributions through renewable energy projects that will provide 50 percent of the Kingdom’s electricity production by 2030.
The initiative is expected to eliminate more than 130 million tons of carbon emissions by using clean hydrocarbon technologies.
The PIF governor said such initiatives represented a clear and ambitious roadmap and would contribute to achieving global targets on combating climate change. He said the Kingdom will raise vegetation cover, reduce emissions, and preserve marine life as part of its efforts to deliver a more sustainable future.
Thought leaders in sustainable investment gathered virtually in Riyadh on Thursday to explore one of the hottest topics in the world of finance — the move to environmental, social and governance (ESG) benchmarks by big global investors.
The event, under the auspices of the Future Investment Initiative (FII) Institute, focuses attention on sustainable investment in the post-pandemic recovery, and the role of emerging markets like Saudi Arabia within the new investment philosophy.
ESG investing has recently taken off, attracting hundreds of billions of dollars into funds that pledge to weigh broader considerations when deciding where to put their money, rather than mere cash returns.
Richard Attias, chief executive of the FII Institute, said: “Although ESG has proven its worth, much remains to be done to ensure we use it to its full potential. The low level of inclusion and participation of emerging markets in the development of ESG frameworks is counterproductive to global sustainability.
“Perhaps the most challenging task, and one that we will address during this event, is how we push ourselves to think beyond ESG as a risk management tool and deploy it to create a truly sustainable future,” he added.

 


More than 6,000 Saudi companies operating in Egypt

More than 6,000 Saudi companies operating in Egypt
Updated 15 April 2021

More than 6,000 Saudi companies operating in Egypt

More than 6,000 Saudi companies operating in Egypt
  • Saudi companies have investments of SR122 billion in Egypt

RIYADH: There are 6,017 Saudi companies in Egypt, with investments of SR122 billion ($32.5 billion), according to data from the Egyptian General Authority for Investments.

The total paid-up capital of these companies is SR82 billion, said Dr. Saleh Bakr Al Tayyar, legal counsel for the Saudi-Egyptian Business Council, citing data from the Authority.

The Kingdom ranks second in the Arab world in terms of participation in foreign projects in Egypt, and in terms of the number of foreign companies invested, he said.

Abdel Wahab, CEO of the Authority, said that obstacles to further investment in Egypt from Saudi companies, will be removed, Al Watan newspaper reported.

Trade between the two countries reached SR26 billion in 2019, Wahab said.


Jordan public debt reached 85% of GDP in 2020

Jordan public debt reached 85% of GDP in 2020
Updated 15 April 2021

Jordan public debt reached 85% of GDP in 2020

Jordan public debt reached 85% of GDP in 2020
  • External debt reached 13.7 billion dinars in 2020

RIYADH: Jordanian public debt surged by 10.6 percent in 2020 to 26.50 billion dinars ($37.4 billion) as the government spent heavily to support its economy during the COVID-19 pandemic.

Jordan’s public debt ended 2020 at 85.4 percent of GDP, up from 75.8% a year earlier, according to Ministry of Finance data. The ministry recently changed its methodology for calculating public debt, excluding obligations from the Social Security Investment Fund, which amounted to 6.67 billion dinars.

The Hashemite Kingdom’s internal debt was 12.78 billion dinars last year, while external debt stood at 13.72 billion dinars, Ministry of Finance data show.

Unemployment rose to 25 percent in the fourth quarter of 2020, with youth unemployment reaching 55 percent, according to International Monetary Fund data.

Jordan responded “quickly and decisively” in its support of the economy during the COVID-19 pandemic and is making progress on its program of economic reforms, IMF Managing Director Kristalina Georgieva said on Monday in a statement to mark the kingdom’s 100th year.

“Timely and targeted fiscal measures have helped protect jobs and the vulnerable, while equitable tax reforms – aimed at tackling evasion, closing loopholes, and broadening the tax base – have helped maintain debt sustainability,” Georgieva said.

However, the country must address high unemployment to deliver durable, jobs-rich and inclusive growth, she said.


Saudi Re aims to boost capital to fund domestic, overseas expansion plans

Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
Updated 15 April 2021

Saudi Re aims to boost capital to fund domestic, overseas expansion plans

Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
  • Despite a difficult year in 2020, Saudi Re recorded SR 60.7 million in net profit before zakat, an increase of 2 percent year-on-year

RIYADH: The Saudi Reinsurance Company (Saudi Re) on Thursday announced plans to increase its capital in order to fund its expansion plans.

Saudi Re’s board recommended increasing the company’s capital from SR 810 million ($216 million) to SR 891 million and converting SR 81 million of retained earnings into capital, giving the company an extra SR 162 million to finance its expansion plans.

Fahad Al-Hesni, managing director and CEO of Saudi Re, said in a statement: “The capital increase will strengthen Saudi Re’s capital base and support the expansion plans in the domestic and international markets. The board’s recommendation comes in line with Saudi Re’s effort to generate better returns and create a greater shareholder value.”

Despite a difficult year in 2020, Saudi Re recorded SR 60.7 million in net profit before zakat, an increase of 2 percent year-on-year.

At the same time, total assets increased 7 percent to SR 2.8 billion and total gross written premiums (GWPs) increased 18 percent to SR 935 million. International business made up the bulk of the GWP growth — up 25 percent year-on-year — while domestic business increased 8 percent.