Masdar-led consortium starts construction of solar project in Jeddah

Masdar-led consortium starts construction of solar project in Jeddah
The new plant forms part of Saudi Arabia’s clean energy strategy. (Shutterstock)
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Updated 12 April 2021

Masdar-led consortium starts construction of solar project in Jeddah

Masdar-led consortium starts construction of solar project in Jeddah
  • The plant is located in Third Jeddah Industrial City, 50 kilometers southeast of Jeddah

RIYADH: A consortium led by Abu Dhabi’s Masdar has started construction of a solar power plant in Jeddah, after reaching financial close on the project.

The consortium, which includes France’s EDF Renewables and Saudi Arabia-based Nesma Co., announced it will start construction of the 300-megawatt utility-scale plant that will begin operation next year.

The plant is located in Third Jeddah Industrial City, 50 kilometers southeast of Jeddah.

“Saudi Arabia is fast developing into a global renewable energy player, and Masdar will continue to work closely with the Saudi government and our partners here to help the Kingdom achieve its clean energy transition,” Masdar chief Mohamed Jameel Al-Ramahi said in a statement.

The Kingdom’s Renewable Energy Project Development Office awarded the consortium the project after it had submitted the most competitive bid of SR60.9 ($16.2) per megawatt hour, the companies said.

The new plant forms part of Saudi Arabia’s clean energy strategy, where it wants to diversify its power mix and aims to generate 50 percent of its electricity from renewable sources by 2030.

Crown Prince Mohammed bin Salman earlier signed seven power purchase agreements for new solar plants in Saudi Arabia following the inauguration of the Sakaka plant.

The Jeddah solar plant will utilize the latest technology in the PV market, combining bifacial PV modules with mounting structures that utilize single-axis tracking technology to maximize energy generation by following the sun’s position throughout the day. State-of-the-art robots will also be used to clean the modules.

In 2019, a consortium led by EDF Renewables in partnership with Masdar was selected to build a 400 MW utility-scale wind farm in Dumat Al Jandal — Saudi Arabia’s first wind energy project and the largest in the Middle East. The plant will start operation and generate carbon-free electricity by late 2022. On Saturday, Mumbai-headquartered Larsen & Toubro (L&T) secured a contract to build the Sudair solar PV project in Saudi Arabia.

The renewables arm of L&T’s Power Transmission and Distribution business bagged the turnkey engineering, procurement, and construction contract for the Riyadh plant, which has a total capacity of 1.5 gigawatts.

“The project that is coming up in Riyadh province has a 30.8 square kilometer land parcel available to install a total capacity of 1.5GW PV Solar modules with associated single axial tracker and inverters,” the company said in a statement.


Saudi grocer Othaim sales dip a year on from panic buying supermarket sweep

Saudi grocer Othaim sales dip a year on from panic buying supermarket sweep
Updated 11 min 37 sec ago

Saudi grocer Othaim sales dip a year on from panic buying supermarket sweep

Saudi grocer Othaim sales dip a year on from panic buying supermarket sweep
  • VAT and school closures also hit performance
  • Global supermarket sector returns to normality

DUBAI: Saudi supermarket chain Abdullah Al Othaim Markets reported a 42 percent drop in first quarter profit, a year on from the early panic-buying days of the pandemic.
Net profit fell to SR57.7 million ($15.4 million) for the first three months of the year from almost SR100 million a year earlier, the company said in a Tadawul filing. Sales fell 11.9 percent over the same period to about SR2.1 billion.
The company said that the decline followed the “abnormal growth in retail sales as a result of high demand to buy groceries and food supplies,” following the coronavirus outbreak in the Kingdom last year. It also cited the closure of schools and an increase in value added tax as factors that weighed on its performance.
Supermarkets worldwide have benefited from a boom in grocery buying over the last year, especially at the start of the pandemic when supermarket shelves were stripped of essential items as consumers went in to panic buying mode. As restaurants and cafes closed their doors, many consumers compensated by buying more food to consume at home.
Now global supermarket chains are adjusting to the return of more normal consumer purchasing patterns as lockdowns are lifted and economies re-open.
Sainsbury’s CEO Simon Roberts said on Wednesday that that while customers shopping more normally would impact sales growth this year, the costs of the crisis would also fall.
“Like our customers, we are all looking forward to things feeling more normal over the coming months,” he said.


Saudi banks in a ‘sweet spot’ says fund manager

Saudi banks in a ‘sweet spot’ says fund manager
Updated 26 min 15 sec ago

Saudi banks in a ‘sweet spot’ says fund manager

Saudi banks in a ‘sweet spot’ says fund manager
  • Shareek program to boost corporate borrowing
  • Saudi banks well positioned with low cost of funding and deposits

DUBAI: Saudi banks are in a “sweet spot” to tap rising corporate and mortgage lending according to a top regional fund manager.
It comes after a rampant rise in the stock price of the Kingdom’s big lenders.
“I think Saudi banks in general are in a sweet spot,” Hedi Ben Mlouka, CEO and founder of FIM partners, told Bloomberg TV on Thursday. “You are seeing growth no longer coming from a low base, we are talking big numbers here that move the balance sheet and the profitability of these banks. The ‘Shareek’ program is going to spur the first growth we have seen in corporate borrowing to support all this capex,” he said.
The $2.7 trillion Shareek program was announced by the Saudi government last month and aims to provide incentives for publicly quoted companies to channel dividend payments into long-term investment in the Kingdom.
“The Saudi banks are in the best position to take advantage of that because their cost of funding and cost of deposits is low,” said Mlouka. “The Islamic banks are the best positioned from that perspective because they have the lowest cost of funding.”
Saudi banks have been among the best performers among regional publicly traded stocks in the first quarter, with the shares of Tadawul-listed lenders up by an average of 26 percent since the start of the year, according to Bloomberg data.
Saudi Arabia’s debt capital market is expected to grow as the Kingdom doubles down on its Vision 2030 goals, S&P Global Ratings said this week.
The Kingdom is banking on the increasing role of its debt and equities market in financing Vision 2030, the report said, as it seeks to attract more foreign direct investments.
“We think banks will continue to play an important role in financing Vision 2030, but foresee an increased role for the local capital market,” said S&P Global Ratings credit analyst Timucin Engin in the report published Tuesday.


Sadara first quarter profit surges on chemical prices increase, debt rejig

Sadara first quarter profit surges on chemical prices increase, debt rejig
Updated 59 min 7 sec ago

Sadara first quarter profit surges on chemical prices increase, debt rejig

Sadara first quarter profit surges on chemical prices increase, debt rejig
  • Q1 comprehensive income was SR2.04 billion vs. a loss of SR2.24 billion
  • Sadara booked a gain of SR1.05 billion on debt restructuring

DUBAI: Sadara Chemical Company reported a surge in profit in the first quarter as the price of its products increased and it booked a sizeable gain from the restructuring of its debts.
First quarter total comprehensive income rose to SR2.04 billion ($544 million) compared with a loss of SR2.24 billion in the year-earlier period and a profit of SR109 million in the fourth quarter of 2020, Sadara said in a filing to the Tadawul.
Revenue increased 80 percent year on year and 31 percent from the previous quarter to SR4.42 billion. Profit per share was SR0.44, compared with a loss of SR0.37 a year earlier.
The improved performance was attributed to “higher selling prices, continuous financial discipline, and the recognition of a modification gain of SR1.05 billion from debt re-profiling,” the company said.
Sadara, a joint venture between Saudi Aramco and Dow Chemical, joins other Tadawul-listed Saudi petrochemical producers in reporting a rebound in first-quarter profit.
The sector reported net profits of SR8.5 billion in Q1 compared with collective losses of SR3.2 billion over the same period in 2020, according to data from financial information website Argaam.
Saudi petrochemicals giant SABIC, which accounts for 57 percent of total earnings in the sector, last month reported that its Q1 profits had more than doubled to SR4.86 billion compared to the previous quarter and rebounding from a loss of SR1.05 billion in Q1 2020.
Nine petrochemical companies, including SABIC, were back in the black after reporting losses last year.
Saudi Aramco said in late March it restructured its debt financing for Sadara Chemical Company. The Saudi national oil company also said an agreement had been reached to allocate more natural gas feedstock to the joint venture, which has been building the world’s biggest chemical complex ever delivered in a single phase, in Jubail.
Sahara International Petrochemical Company (Sipchem), which had reported profit after Zakat and tax of SR451 million, said today it had delivered SR136 million in synergies in 2020, or 78 percent of its target in half the timeframe.
Saudi International Petrochemical Company completed its $2 billion merger with Sahara in May 2019. It has a goal of SR175 million of synergies by May 20222, it said in an investor presentation.


UAE’s Etisalat to raise €1 billion with two-tranche bonds

UAE’s Etisalat to raise €1 billion with two-tranche bonds
Updated 06 May 2021

UAE’s Etisalat to raise €1 billion with two-tranche bonds

UAE’s Etisalat to raise €1 billion with two-tranche bonds

Abu Dhabi-based telecoms operator Etisalat is set to raise €1 billion ($1.2 billion) in dual-tranche bonds on Thursday, a document from one of the banks leading the deal showed.
The company plans to raise €500 million in seven-year notes and a further €500 million with a 12-year maturity, according to the document reviewed by Reuters.
The seven-year notes were being marketed at about 85 basis points over mid-swaps, with the 12-year tranche at about 110 bps over.
HSBC, BNP Paribas, First Abu Dhabi Bank and Societe Generale have been hired to arrange the transaction, which is expected to close later on Thursday.


Egypt PMI fell in April to lowest level in 9 months

Egypt PMI fell in April to lowest level in 9 months
Updated 06 May 2021

Egypt PMI fell in April to lowest level in 9 months

Egypt PMI fell in April to lowest level in 9 months
  • PMI fell to 47.7 in April from 48 in March, IHS Markit said
  • Output, new orders and employment all fell in April

RIYADH: Egypt’s non-oil private sector economic conditions worsened in April by the most since June 2020, according to IHS Markit.

The Egypt Purchasing Managers’ Index (PMI) fell to 47.7 in April from 48.0 in March, its fifth consecutive month below the 50 mark that separates expansion from contraction, IHS Market said.

Sub-indexes showed declines in output, new orders and employment as rising global raw material costs pushed inflation to the fastest pace since September 2019.

The level of new export orders received by Egyptian companies increased strongly during April, which purchasing managers attributed to an improvement in activity across foreign markets.

However, expectations for future output fell significantly in April, as a rise in domestic coronavirus cases and concerns about financial liquidity damped optimism, IHS Markit said.