China’s new coal plants risk 2060 climate target, researchers say

China’s new coal plants risk 2060 climate target, researchers say
A coal mine in northern China’s Shanxi province. China must stop building new coal power plants and increase its wind and solar capacity if it wants to become carbon neutral by 2060, experts say. (AFP)
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Updated 21 November 2020

China’s new coal plants risk 2060 climate target, researchers say

China’s new coal plants risk 2060 climate target, researchers say
  • ‘Coal power should be phased out rapidly in a cost-effective manner’

BEIJING: China must stop building new coal power plants and ramp up its wind and solar capacity if it wants to become carbon neutral by 2060, researchers said on Friday.
A new report published by the Helsinki-based Center for Research on Energy and Clean Air warned that overcapacity of existing plants and new ones being built mean it will be hard for Beijing to meet the much-lauded climate goal promised by President Xi Jinping earlier this year.
The research organization called for the Chinese government to shut down all new coal-fired power plants built from 2020 and double the growth of wind and solar power in the next decade.
The country should aim to whittle its coal fleet down to about 680 gigawatts by 2030 — instead of current plans to expand it to about 1,300 gigawatts, it said.
Without proper policy intervention to retire these surplus plants early and halt the construction of new ones, the researchers claimed the level of carbon dioxide
emitted by China would show almost no reduction compared to this year’s level.
“The power section needs to achieve zero emissions as soon as possible,” the report said. “Coal power should be phased out rapidly in a cost-effective manner.”
As part of the plan to reach carbon neutrality by 2060, China also pledged to reach its peak carbon emissions by 2030, which researchers claim needs coal-fired power to start reducing almost immediately.
“As long as coal consumption continues to drop significantly, peaking carbon emissions before 2030 will be a relatively
achievable goal,” Yuan Jiahai, Professor at North China Electric Power University, said in the report.
One way to reach this target, the report says, is to set a high carbon price in the carbon trading market, in turn incentivising the carbon-emitters to reduce coal-fired power generation.
The report also called for coordination among the Chinese government, think tanks and other NGOs to ensure the visibility and transparency of the process.
China’s carbon promise, announced in September in a speech by Xi to the UN, came as a surprise as Beijing has relied heavily on coal to spur its economic emergence from poverty to superpower status over the past few decades.


Almost half of Jeddah’s hotel rooms were booked in March

Almost half of Jeddah’s hotel rooms were booked in March
Updated 14 min 19 sec ago

Almost half of Jeddah’s hotel rooms were booked in March

Almost half of Jeddah’s hotel rooms were booked in March
  • Industry report says occupancy rates were second-highest since pandemic started

JEDDAH: The hotel industry in Saudi Arabia’s commercial center reported one of its highest monthly occupancy levels of the COVID-19 pandemic period, according to preliminary March 2021 data from the hotel management analytics firm Smith Travel Research (STR).

According to the figures, hotel occupancy in Jeddah reached 47.1 percent in March, and the revenue per available room (RevPAR) reached SR318.72 ($84.99).

March occupancy and RevPAR rates were the second-highest since February 2020, just behind figures for January 2021. However, the average daily rate for hotel rooms was SR676.36, remaining in line with the levels recorded in the second half of 2020.

Earlier this month, a report by STR found that Saudi Arabia has the world’s biggest hotel pipeline, anticipating a 67.1 percent increase in room supply over the next three years, the highest among the 50 most populated countries. The data showed 73,057 rooms in the Saudi hotel pipeline, with 16,965 scheduled to come online in 2021. 

The Jeddah hotel market is expected to increase hotel supply by more than 97 percent, with 11,198 rooms under development.


Saudia targets post-pandemic profitability, privatization

Saudia targets post-pandemic profitability, privatization
Updated 10 min 50 sec ago

Saudia targets post-pandemic profitability, privatization

Saudia targets post-pandemic profitability, privatization
  • Kingdom’s flag carrier gearing up for resumption of international passenger travel on May 17

RIYADH: A few minutes into our interview and it was clear that the CEO of Saudia, the Kingdom’s state-owned flag carrier, wanted to set the record straight about the aviation sector during the coronavirus disease (COVID-19) pandemic.

“Many people believe that since flying has been reduced, we (the airline industry) have just been able to relax and take a breather,” said Capt. Ibrahim AlKoshy.

“Talking to everybody in the airline industry, it’s been one of the busiest times for anyone … We took that challenge as an opportunity to actually come out stronger.”

The aviation industry has certainly had its challenges. In February, the regional president of the International Air Transport Association (IATA) told Argaam that airlines in Saudi Arabia incurred $9.6 billion in losses as passenger traffic fell by 70 percent.

The latest figures released by IATA earlier this month showed that for Middle Eastern airlines, demand in February 2021 was down 83.1 percent compared to the same month in 2019.

Capt. Ibrahim AlKoshy
​​​​​

Flights were grounded in the Kingdom in March 2020. While domestic traffic resumed at the end of May last year, and Saudia is gearing up for international flights to restart on May 17, AlKoshy said it will still be some time before a recovery to pre-pandemic levels.

“Our estimates are pretty much in line with IATA and other airlines because we’re sharing data on market recovery,” he added.

“We don’t see that full recovery taking place in international (passenger traffic) until 2024. The remainder of 2021, we do see a strong domestic (and) slight improvement in international … It seems people are still a bit cautious about long-distance traveling.”

A survey in December found that 46 percent of Saudi respondents are looking forward to traveling internationally once restrictions are lifted.

Saudia is putting everything in place to help inspire confidence in travelers to feel safe getting on an aircraft again.

FASTFACT

Operating to 90 destinations in 36 countries, Saudia has a number of code-sharing agreements and partnerships with airlines such as Abu Dhabi’s Etihad Airways and China Southern Airlines.

AlKoshy said on April 19, Saudia will trial a digital travel and health pass developed by IATA, and has implemented around 50 COVID-related health initiatives on its flights, resulting in it being awarded Diamond status by the Airline Passenger Experience Association for its efforts to ensure the highest standards of cleanliness and sanitation across its operations. “The practices that we did at Saudia weren’t done generically. We actually hired infectious disease physicians to work with us on developing the protocols,” he added.

“We’re quite proud of how we actually put that together … It seems to have gained passenger confidence quite well.”

Rebuilding passenger confidence is important, and one of the main reasons that AlKoshy and his team have not been able to take a breather over the last year.

Operating to 90 destinations in 36 countries, Saudia has a number of code-sharing agreements and partnerships with airlines such as Abu Dhabi’s Etihad Airways and China Southern Airlines. (File photo)

“It’s been a complete revisit to the strategy … We’re really looking at a lot of operational efficiencies, better utilization of all resources, aircraft crew etc., not just because of COVID-19 but it’s the right thing to do. We’ll come out much stronger on this one,” he said.

Reuters reported in December that the Kingdom’s Finance Ministry approved SR13.6 billion ($3.6 billion) for Saudia in 2019, and SR6.4 billion in the first half of 2020. AlKoshy acknowledged that like many companies during the pandemic, help from the government was needed.

While he did not get into exact figures, he said the impression that the airline is heavily government-subsidized is not accurate.

“Saudia is a state-owned airline at this stage. We’re working toward privatization, but the truth of the matter is many of the subsidies that historically people believe Saudia receives are no longer received,” he added.

“We’re operating already on our own budget. There’s been some support for staffing etc. for COVID-19, but I think it’s really important to understand that Saudia actually entered with a strong balance sheet at the beginning of this (pandemic) and we’re doing quite well. However, that’s not to say support hasn’t been received during this period. It’s due to COVID-19.”

AlKoshy forecasts that the airline will be back in the black within a few years. “What we’re looking at is … Saudia sees profitability in 2024 without question,” he said.

Privatization of state assets is a core priority for the Saudi government going forward. “Privatization is part of the plan at the Saudia group level and for the airline as well,” he said.

Last month, the airline signed an agreement worth SR11.2 billion to partially finance new aircraft orders up until mid-2024.

According to its 2020 official factsheet Saudia has 144 aircraft, but AlKoshy confirmed that there are plans for new orders.

“Saudia, when looking at its next fleet offers as well, we have our requirements. We’ll definitely be looking at the best options we have with both Boeing and Airbus,” he said. “And there’s another fleet expansion expected that we’ll be going through, so we’ll see how we can work with Boeing and Airbus. They’ve been partners with Saudia for quite a long time. It’s something we’ll look at.”

Operating to 90 destinations in 36 countries, Saudia has a number of code-sharing agreements and partnerships with airlines such as Abu Dhabi’s Etihad Airways and China Southern Airlines.

“We have very strong plans to strengthen that virtual network of codeshares, possibly through joint ventures. There are many things that are being looked at. Some of them have been actioned already,” AlKoshy said.

As the airline counts down the days to May 17, he and his team will be looking forward to getting back to some form of normalization.

But, as he was keen to point out, they certainly were not resting on their laurels over the last year.

“It’s been a very challenging time for the airline industry as a whole, but we’ll come out much stronger on this one,” he said. “Saudia has very aggressive growth plans.”


O2, Virgin Media win provisional UK approval for $43bn merger

O2, Virgin Media win provisional UK approval for $43bn merger
Updated 54 min 29 sec ago

O2, Virgin Media win provisional UK approval for $43bn merger

O2, Virgin Media win provisional UK approval for $43bn merger
  • The two telecommunications groups agreed last May to merge their British businesses to create a broadband and mobile powerhouse in a challenge to market leader BT Group

LONDON: Britain’s competition watchdog said on Wednesday it had provisionally cleared the £31.4 billion ($43.3 billion) merger between broadband company Virgin Media and Telefonica’s UK mobile network O2.

The Competition and Markets Authority (CMA), addressing one of its primary concerns, said that its investigation had concluded the deal was unlikely to result in a substantial reduction of competition in the supply of wholesale mobile services.

“A thorough analysis of the evidence gathered ... has shown that the deal is unlikely to lead to higher prices or a reduced quality of mobile services — meaning customers should continue to benefit from strong competition,” said Martin Coleman, CMA Panel Inquiry Chair.

The regulator said it believed there was sufficient competition within the market to prevent either player raising wholesale broadband or mobile prices to the detriment of rivals who use its infrastructure.

The decision was welcomed by Virgin Media owner Liberty Global Plc. and Spain-based Telefonica, which took note of the CMA’s provisional conclusions.

“We continue to work constructively with the CMA to achieve a positive outcome and continue to expect closing around the middle of this year,” a spokesman for Telefonica told Reuters on Wednesday.

The two telecommunications groups agreed last May to merge their British businesses to create a broadband and mobile powerhouse in a challenge to market leader BT Group.

The two sides said earlier this month that Virgin Media boss Lutz Schuler would become chief executive of the new company.


PIF-backed fund to help UAE HR firm expand into KSA with $20m investment

PIF-backed fund to help UAE HR firm expand into KSA with $20m investment
Updated 14 April 2021

PIF-backed fund to help UAE HR firm expand into KSA with $20m investment

PIF-backed fund to help UAE HR firm expand into KSA with $20m investment
  • Dubai-based Reach Group first recipient from NBK Capital Partners’ $300m Shariah credit fund

JEDDAH: A Dubai-based human resources consultancy firm has become the first company to receive financing from a new $300 million Shariah credit fund anchored by Saudi Arabia’s sovereign wealth fund, it was announced this week.

Reach Group focuses on supplying skilled and semi-skilled employees to government, private-sector companies and quasi-public entities on long-term contracts.

The company has 6,000 outsourced full-time employees in the UAE, making it among the largest temporary staffing providers in the country.

It is planning to use its new $20 million investment to expand into the Saudi market through the acquisition of a local outsourcing company in the Kingdom.

“This transaction provides additional capital for us to expand into Saudi Arabia, which we’ve viewed as a natural growth area for our business,” said Reach Group’s founder and CEO Malik Melhem.

The $300 million Shariah Credit Opportunities Fund was launched in February by the Dubai-headquartered National Bank of Kuwait Capital Partners (NBKCP), a subsidiary of Kuwait’s biggest bank.

The fund’s anchor investor is the Saudi Public Investment Fund, and is expected to make 10-12 investments of $15-$50 million over the next eight years. Reach Group is the first such investment to be announced.

“Reach is a highly reputable leader in outsourced staffing solutions in the region. We were pleased to work with its founder and management team to structure a financing solution that allowed Reach to enter the Saudi market,” said NBKCP CEO Yaser Moustafa.


Sustainable investment leaders to gather for Riyadh summit

The Future Investment Initiative Institute will examine sustainable investment in the post-pandemic recovery, and the role of emerging markets like Saudi Arabia. (Shutterstock/File Photo)
The Future Investment Initiative Institute will examine sustainable investment in the post-pandemic recovery, and the role of emerging markets like Saudi Arabia. (Shutterstock/File Photo)
Updated 14 April 2021

Sustainable investment leaders to gather for Riyadh summit

The Future Investment Initiative Institute will examine sustainable investment in the post-pandemic recovery, and the role of emerging markets like Saudi Arabia. (Shutterstock/File Photo)
  • ESG funds attract billions of dollars
  • Most assets currently held in Europe

DUBAI: Thought leaders in sustainable investment will gather 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, will focus 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.

Although sustainable investment has been advocated as a concept for many years, it has taken off recently against the background of the COVID-19 pandemic, which persuaded many traditional big investors to look again at their basic criteria.

The most significant recent convert to the new thinking has been Larry Fink of giant investment manager BlackRock, who promised to divert funds into ESG sectors and away from traditional investment areas, particularly in the area of climate change.

“The risks that climate change poses to the world of finance can no longer be ignored,” Fink wrote in his annual letter to global chief executives.

Many investment managers seem to have agreed with the BlackRock boss. Figures from Refinitiv, the data provider, show that flows into ESG funds totaled around SR562.6 billion ($150 billion) in the final quarter of 2020 alone, twice as much as the same period in 2019 before the pandemic.

But global investment flows are not even, recent research has shown. By far the biggest assets in ESG funds are held in Europe, with a total of $1.34 trillion, according to financial industry analysts. This compares with only $236 billion in the US, and a meager $65 billion in the rest of the world, including the Middle East.

“The event will offer insights into how to boost participation of emerging markets in ESG and also deep dive into the role of ESG across corporations, retail investing, and monetary policy in pursuit of a sustainable world,” the FII Institute said.

The delegates will be addressed by Yasir Al-Rumayyan, governor of Saudi Arabia’s Public Investment Fund, which has incorporated ESG principles into its $400 billion worth of global investments.

It will also hear from Bandar Hajjar, president of the Islamic Development Bank, and Noel Quinn, chief executive of HSBC, which recently decided to cease investment in coal assets, as well as senior executives from leading financial institutions in Asia and Africa.

Despite the fast-rising investment trend in some parts of the world, there are still areas of disagreement worldwide on what constitutes fair ESG standards.

Khalid Abdullah Al-Hussan, the CEO of the Saudi Stock Exchange (Tadawul), said recently: “There are several standards applied worldwide, and a method applied in one country is not necessarily suitable for another. The agencies must consider local criteria while evaluating ESG in emerging markets.”

That issue is particularly relevant in the Arabian Gulf, where the bulk of investments are in oil and gas-related assets, which have come under attack from ESG activists with calls to divest from so-called “fossil fuel” investments.

But there are signs the new investment principles are beginning to catch on among regional investors, especially from the younger generation.

A recent survey by Barclays Private Bank found that nearly 60 percent of investors from Arab family offices were heading into more sustainable investment directions, in many cases prompted by concerns of younger family members.

“The report findings reflect that 76 percent of all respondents in the Middle East state that responsible investing is important to their family,” said Rahim Daya, head of private banking at Barclays in the Middle East.