Abu Dhabi secures funding to build world’s largest solar power plant

Abu Dhabi secures funding to build world’s largest solar power plant
The Al-Dhafra Solar PV IPP, located around 35km from Abu Dhabi city, will be the world’s largest single-site solar power plant when finished. (AFP file photo)
Short Url
Updated 22 December 2020

Abu Dhabi secures funding to build world’s largest solar power plant

Abu Dhabi secures funding to build world’s largest solar power plant
  • Funding for the project will be sourced from seven international banks

DUBAI: The Abu Dhabi National Energy Co. (TAQA) on Tuesday announced it has secured funding to build the world’s largest solar power plant.
The successful financial closing of Al-Dhafra Solar Photovoltaic (PV) Independent Power Producer (IPP) project was achieved alongside TAQA’s partners Masdar, EDF Renewables and JinkoPower.
The plant will be located around 35km from Abu Dhabi city, will have capacity of 2 gigawatts (GW) and will supply power to the Emirates Water and Electricity Co. (EWEC).
When complete, Al-Dhafra Solar PV IPP will be the world’s largest single-site solar power plant, using approximately 4 million solar panels to generate enough electricity for approximately 160,000 homes across the UAE.
Funding for the project will be sourced from seven international banks. TAQA will own 40 percent of the project while Masdar, EDF Renewables and JinkoPower will have a 20 percent stake each.
“Through this project and many others – such as TAQA’s Noor Abu Dhabi, currently the world’s largest operational solar power plant – we have established the company as a trusted integrated utilities partner that is leading the sector’s transformation in the UAE and beyond,” said Jasim Husain Thabet, group CEO and managing director at TAQA.
“We have an expanded portfolio of power and water assets that we will grow further through a disciplined approach, adding value for our shareholders and delivering a diverse supply of energy for our stakeholders and the communities in which we operate.”
EWEC CEO Othman Al-Ali said: “Reaching the financial close for a project of this scale and efficiency marks another milestone in EWEC’s commitment to developing the UAE’s renewable energy sector.”
He added: “Over the past 12 months, EWEC has collaborated with international, regional and local partners during the bidding, negotiation and financial close for a number of ground-breaking projects: The world’s largest reverse osmosis desalination project at Taweelah, the UAE’s largest and most advanced gas-fired power plant in Fujairah, and now the world’s largest solar power plant at Al-Dhafra.”
Bruno Bensasson, EDF Group senior executive vice president for renewable energies and CEO of EDF Renewables, said the plant is due to start commercial operations in 2022.


Egypt spent $100bn on govt projects in 7 years

Egypt spent $100bn on govt projects in 7 years
Updated 7 min 41 sec ago

Egypt spent $100bn on govt projects in 7 years

Egypt spent $100bn on govt projects in 7 years
  • The minister said these structural reforms could play a vital role in accelerating economic recovery from the coronavirus

CAIRO: Egypt’s infrastructure spending during the last seven years amounted to EGP1.7 trillion ($100 billion), according to the country’s Minister of Planning and Economic Development Hala El-Said.

The spending had a direct impact on Egypt’s ranking in the Global Competitiveness Index as it focused on improving the quality of roads and providing uninterrupted power to the private sector and citizens, she said on Saturday.

She also said the government was taking several measures to boost public-private partnerships to expedite economic growth, and that the government had founded the first Egyptian sovereign fund designed to carry out projects in partnership with the private sector.

The minister said that, to strengthen such partnerships, the government kept the private sector and other stakeholders in the loop while formulating economic policies and regulations.

One example was a recent investment law, which encouraged the participation of the private sector and its increased collaboration with the public sector.

The minister said these structural reforms could play a vital role in accelerating economic recovery from the coronavirus pandemic, as well as boosting overall growth.

El-Said said the government was proceeding with the implementation of structural reforms that would protect African economies from external shocks in the future.


Private sector partnerships created 400k jobs for Saudis since 2018

Private sector partnerships created 400k jobs for Saudis since 2018
Updated 38 min 27 sec ago

Private sector partnerships created 400k jobs for Saudis since 2018

Private sector partnerships created 400k jobs for Saudis since 2018
  • Saudi Arabia seeks to raise $54.5 billion over the next 4 years through its privatization program

RIYADH: Jobs have been created for about 400,000 Saudi nationals as a result of 11 Saudization agreements put in place since 2018, the Argaam website reported, citing information from Abdullah Abuthnain, vice minister of human resources and social development at the Ministry of Human Resources and Social Development.

Increased privatization and Saudization of roles are the key goals of the Kingdom’s Vision 2030 program.

Finance Minister Mohammed Al-Jadaan last month said that Saudi Arabia is seeking to raise about $54.5 billion over the next four years through its privatization program.

Al-Jadaan expects to raise $38 billion through asset sales and $16.5 billion through public-private partnerships, he told the Financial Times.

The Saudi government has identified 160 projects in 16 sectors, including asset sales and public-private partnerships through 2025.

Asset sales will include government-owned hotels, television broadcasting towers, and cooling and water desalination plants.

The plan does not include Public Investment Fund entities or the sale of other assets of Saudi Aramco. The new privatization law will be enacted in Saudi Arabia in July this year.

The National Privatization Center (NCP) in March also announced the creation of the Registry of Privatization Projects, a comprehensive central database of information and documents related to projects targeted for privatization.

According to the director general of Strategic Communication and Marketing at the NCP, Hani Al-Saigh, the new system seeks to enhance the existing privatization system. One of its most important roles will be to strengthen existing governance and ensure fairness and transparency.

“The law allows participants from the private sector to set up a committee to submit grievances related to the bidding and selection procedures of privatization projects and lay the regulatory basis to compensate the aggrieved in case the gap cannot be addressed,” he told Arab News.

A report by the National Labor Observatory issued in April this year indicated that the percentage of Saudization in the private sector rose to 22.75 percent in the first quarter of 2021 compared to 20.37 percent during the same period last year.

Recent data has shown that seven major job groupings in the private sector have achieved Saudization figures of more than 50 percent. While the rate across the private sector as a whole is around a quarter, Al-Eqtisadiah newspaper reported that the financial and insurance sector had achieved a rate of 83.6 percent, followed by public administration, defense, and mandatory social insurance (71.9 percent), mining, and quarrying activities (63.2 percent), education (52.9 percent), and information and communications (50.7 percent).

Saudi Arabia has the lowest dependence on foreign labor among Gulf Cooperation Council countries at around 77 percent, while Qatar has the highest, at about 94 percent, according to data from S&P Ratings.

While the Saudization figure is moving in a positive direction, some sectors face challenges. In December, the Saudi government added accountancy to the list of professions set to be Saudized, announcing that 30 percent of all accounting jobs at all local Saudi private sector companies with at least five accounting professionals must be filled by Saudi nationals. 

The ruling will come into effect on June 21 this year, and it is predicted that the move will create around 9,800 job opportunities for Saudi accountants.


Egypt launches KSA marketing drive to boost tourism

Egypt launches KSA marketing drive to boost tourism
Updated 44 min 56 sec ago

Egypt launches KSA marketing drive to boost tourism

Egypt launches KSA marketing drive to boost tourism
  • Saudi Arabia ranked among the top countries for travel to Egypt before the pandemic

RIYADH: Saudi Arabia is among the top markets for tourism in Egypt, and now that the Kingdom has opened its borders for international travel, the Egyptian Tourism Promotion Board (ETPB) is ramping up its marketing drive in the Kingdom.

Ahmed Youssef, chairman of the ETPB, told Arab News: “Revenues from tourism reached the highest point at $12.6 billion in 2019. Saudi Arabia ranked among the top countries for travel to Egypt before the pandemic. The Saudi market represents the first and most important Arab market, ranking fifth for visitors to Egypt. The trend continued into the first two months of 2020 that recorded 8 percent year-on-year growth in terms of numbers and revenues, with 2.4 million tourists visiting the country during this period.”

Tourism is a big revenue generator for Egypt, reaching $13 billion in 2019. About 3.5 million visitors traveled to the country last year, compared to 13.1 million in 2019. Although numbers are still below pre-pandemic levels, many establishments have resumed operations in a bid to kick-start the tourism sector, the chairman said.

Saudi Arabia is an important market for Egypt, which is why the ETPB is making significant investments in promotional activities.

“Now that the country has opened its borders for international travel, we plan to run promotions in partnerships with Saudi tour operators,” Youssef said. “In addition, we have incentive programs in place for the aviation industry, where airport landing and housing fees have been discounted by 50 percent. We also launched a digital campaign in the GCC, especially in Saudi Arabia, starting the last week of Ramadan (May 2021).”

“We are already seeing strong interest from travelers based in Saudi Arabia, especially Arab families. Our two countries share similar culture and values, which, in addition to the relative proximity, makes Egypt a highly attractive destination for Saudi tourists,” he said.

Wego, one of the biggest online travel marketplaces in the Middle East and North Africa (MENA) region, said in the run-up to the resumption of international travel on May 17 that Egypt topped the list of desired destinations.

Youssef said: “Our main goal now is not to measure the number of tourists but to reassure visitors that Egypt is a safe tourist destination. Saudi Arabia has now opened its borders for its nationals to travel again. We have also started receiving tourists from Saudi Arabia and we are hoping they will enjoy their time here.”

Egypt has adopted strict precautionary measures to limit the spread of COVID-19 while taking steps to support the economy, including the tourism sector.

The World Travel and Tourism Council (WTTC) granted Egypt its Safe Travels stamp, the ETPB chairman said.

“We have introduced the requirement for tourists to carry a negative COVID-19 PCR test certificate from their country issued up to 72 hours before the time of departure (96 hours for travelers arriving from Japan, China, Thailand, the US, Canada, South America, as well as London Heathrow, Paris and Frankfurt airports). Exceptions apply to travelers arriving by plane at the most frequented tourist destinations — Sharm El-Sheikh, Taba, Hurghada, and Marsa Alam — who can do a PCR test upon arrival at a cost of $30,” Youssef said.

The ETPB is targeting tourism revenue of $8 billion and aiming to attract 8 million overseas visitors in 2021. Demand is expected to stabilize and lead to a growth in reservation rates for the 2021-2022 winter season.

“We hope the numbers will return to pre-pandemic levels by fall 2022,” Youssef said.


King Salman Energy Park wins US green building award

King Salman Energy Park wins US green building award
Updated 56 min 20 sec ago

King Salman Energy Park wins US green building award

King Salman Energy Park wins US green building award
  • SPARK is being built on an area of 50 square kilometers

RIYADH: The King Salman Energy Park (SPARK) has been awarded the 2021 US Green Building Council (USGBC) Leadership Award for the Middle East in recognition of its environmentally friendly approach to construction and development.

SPARK was the first industrial city in the world to obtain Leadership in Energy and Environmental Design (LEED) Silver Certification.

Developed by the US Green Building Council, LEED aims to reduce the environmental impact of the construction process, limit resource use, reduce carbon emissions and proactively address climate change.

Saif Al-Qahtani, president and CEO, said in a press statement: “At SPARK, we are committed to ensuring sustainable solutions are continuously implemented as we grow to become the leading energy-centric ecosystem in the world. 

“We have achieved many firsts in our initial stages of development and will continue to adopt and support innovative initiatives that help improve the quality of life for our people, while also strengthening our business and the Kingdom’s economy. 

“We are very proud of our team and the work they have done to guarantee SPARK provides long-term value and supports national and regional programs aimed at building a more sustainable future.”

The 2021 USGBC Leadership Award recipients are selected from among USGBC’s around 10,000 member organizations and the 106,000 LEED commercial projects in more than 180 countries.

SPARK is being built on an area of 50 square kilometers. Phase one will be 14 square kilometers, in addition to a dedicated logistics zone and dry port. SPARK announced in March that 80 percent of the project’s first phase was officially complete.

Oilfields Supply Center Ltd. (OSC) announced in April it is to invest $570 million in building a center at SPARK.


Should GCC states be afraid of the G7 corporate tax plan?

G7 leaders from Canada, France, Germany, Italy, Japan, the UK and the United States meet this weekend for the first time in nearly two years, for three-day talks in Carbis Bay, Cornwall. (AFP)
G7 leaders from Canada, France, Germany, Italy, Japan, the UK and the United States meet this weekend for the first time in nearly two years, for three-day talks in Carbis Bay, Cornwall. (AFP)
Updated 46 min 48 sec ago

Should GCC states be afraid of the G7 corporate tax plan?

G7 leaders from Canada, France, Germany, Italy, Japan, the UK and the United States meet this weekend for the first time in nearly two years, for three-day talks in Carbis Bay, Cornwall. (AFP)
  • Global minimum corporate tax of 15 percent seeks to end downward spiral of corporate tax rates
  • For Saudi and other GCC policymakers, the devil will be in the detail of the new tax proposals

DUBAI: The threat seemed clear. The low-tax countries of the Middle East would have to fall in line with the high tax-and-spend economies of Europe and North America, and impose big tax increases that would threaten their global competitiveness.

But although initially hailed as “historic,” when the experts and policymakers got down to the nitty-gritty of the recent Group of Seven (G7) proposals for a uniform global corporate tax system, they seemed more inclined to ask what all the fuss was about.

None more so than in the Middle East. Initially, the G7 plan appeared to be a threat to the low-tax regimes in place in most GCC countries, which have been regarded as a crucial part of their strategies for economic growth.

Financial experts were quick to recognize the implicit threat to GCC economies. “You could argue that the G7 proposals are an example of the rich developed countries trying to impose their own economic and fiscal regimes on the rest of the world, where many like the GCC have managed with their own practices perfectly well up to now,” Tarek Fadlallah, Dubai-based CEO of Nomura Asset Management Middle East, told Arab News.

Saudi Arabia was regarded as especially exposed to the fallout from a global tax. The Kingdom is a member of the G20 group of countries, and bound by the decisions that body takes in its annual meetings. The G7’s next step with their tax plan is to put it to the wider G20, where Saudi policymakers would have to take a stance on the proposals.

Economic consultant Nasser Saidi said the implementation phase of the proposals would make for hard negotiations. “It will have to be accepted by the G20, laying bare the differences between the tax-raising needs of the developed G7 countries facing unprecedented budget deficits (in part due to cover stimulus spending and lower revenues) and developing countries that want low corporate tax rates to attract investment, technology and know-how,” Saidi told Arab News.

But Mohammed Al-Jadaan, the Saudi minister of finance, appeared to be sanguine about the G7 proposals, welcoming them and pointing out that the previous year’s G20 summit had specifically endorsed plans to budget for post-pandemic recovery through the tax spend of the world’s biggest economies.

Asad Khan, head of asset management at Emirates Investment Bank (EIB) of the UAE, agreed that the devil will be in the detail of the proposals for regional policymakers. “Now, for the G7 deal to be a global success in the long run, the broader G20 which includes major economies like China, India, Russia and Saudi Arabia need to come on board and ratify the agreement,” he told Arab News.

“The sticky details like ‘at least 15 percent minimum tax’ and ‘above 10 percent profit margin’ would remain a bone of contention, but the essence of the deal is appreciated and may well be endorsed by the G20, albeit with several exceptions.”

But whatever compromise deal is hammered out by the global policymakers, the G7 proposals again turn the spotlight on the sensitive subject of tax in the Middle East. The region has regularly featured on lists of global tax havens where “shady men in sunny places” can avoid paying their dues.

For example, earlier this year, the lobby group Tax Justice Network placed the UAE in the top 10 tax havens where companies could set up in a spree of “global corporate tax abuse.”

The UAE has waged a campaign to get itself taken off “blacklists” compiled by international financial authorities.

Opinion

This section contains relevant reference points, placed in (Opinion field)

Some experts believe this is a misconception of the role that tax has played in the region. Although personal income tax is still unheard of in the Gulf, many countries have introduced value added tax on consumption, with Saudi Arabia tripling the rate to 15 percent last year to meet the economic demands of the pandemic recession.

Corporation tax is also payable in a range of industries — notably oil and banking — in many GCC countries. And there are a wide range of government fees and levies imposed across all business sectors throughout the region.

The International Monetary Fund has regularly suggested a form of personal income tax in the region, a call that has so far been resisted by economic policymakers conscious of the need to attract expatriates to live and work in GCC countries.

One tax lawyer, who asked not to be named, told Arab News: “The UAE and other GCC countries are not tax havens in the same sense as the Cayman Islands or Lichtenstein. They are jurisdictions that have historically been averse to imposing taxes, and have actually used that as a tool of economic policy.”

The best illustration of this are the free zones (FZs) and special economic zones (SEZs) that have sprung up in the region as a way of attracting foreign direct investment.

Could this successful formula be jeopardized by the G7 proposals?

“Countries that have relied on zero taxation in their FZs and SEZs to attract capital and diversify their economies will stand accused of facilitating tax avoidance and growing demands for exchange of information for tax purposes and higher corporate governance standards, transparency and disclosure,” said Saidi.

The Kingdom recently promised a raft of incentives, including tax breaks, to multinationals that set up their headquarters in Riyadh as part of the strategy to make the city the financial hub of the Gulf.

Details of the plan, which would become effective in 2024, are still being worked through. “The jury is still out on how a 15 percent corporate tax rate across the GCC would impact the competitiveness of the various financial hubs vying for supremacy in the region,” Fadlallah said.

Initially, the G7 plan appeared to be a threat to the low-tax regimes in place in most GCC countries, such as Saudi Arabia, which have been regarded as a crucial part of their strategies for economic growth. (AFP/File Photo)

Khan of EIB said that tax policy was only one factor in the region’s competitiveness. “In our view, GCC governments have been constantly trying to compete for foreign capital on terms other than low taxes,” he told Arab News.

“While we agree the minimum tax clause forces a rethink for zero-tax countries of the region to attract and retain FDI, our sense is that the Middle East remains a strategic regional hub for global corporates and Western powers.

“The region boasts of a young, dynamic workforce and extremely favorable demographics with a higher disposable income. The region is also a big, stable source of funding for new-age startups via the sovereign wealth funds.”

All in all, the G7 proposals got some big headlines for the tax-and-spend developed countries, and will be a boon for the global tax lawyers and accountants. But they are unlikely to be a significant factor in economic policymakers’ long-term thinking in the Middle East.

------------------

Twitter: @frankkanedubai