PIF-backed ACWA Power starts work on South African project

PIF-backed ACWA Power starts work on South African project
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Medina Acwa Power Vaccine Center. (Shutterstock)
PIF-backed ACWA Power starts work on South African project
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Paddy Padmanathan, CEO of Acwa Power.
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Updated 11 May 2021

PIF-backed ACWA Power starts work on South African project

PIF-backed ACWA Power starts work on South African project
  • The $828 million Redstone concentrated solar power plant will start operations in Q4 2023

RIYADH: ACWA Power, the utility developer backed by Saudi Arabia’s Public Investment Fund (PIF), on Monday announced it had started construction on South Africa’s largest ever renewable energy project.

The Redstone concentrated solar power (CSP) plant begun construction after it raised 11.6 billion rand ($828 million) from a range of South African and international banks. Once complete, the Redstone plant will power 200,000 households. It is due to start operations in the fourth quarter of 2023.

Paddy Padmanathan, president and chief executive officer of ACWA Power, said in a press statement: “Redstone CSP adds another superlative to our budding record in South Africa, being the largest renewable energy investment to date. As grid links are improved, the ingenuity of the private sector together with the great support of experienced finance partners has the potential to spark lasting impact for local communities and address the threats of climate change.”

Saudi Arabia’s sovereign wealth fund, the PIF, in November last year increased its stake in ACWA Power to 50 percent from 33.6 percent. “We believe that ACWA Power will play a significant role in both driving and diversifying economic growth in the future — while also providing enduring commercial return for the people of the kingdom,” the fund said in a statement at the time.

Riyadh-headquartered ACWA Power in January also signed a $125 million financing deal with the Arab Petroleum Investments Corporation (APICORP). The five-year Shariah-compliant corporate facility will be used by ACWA Power to develop its pipeline of future projects.


Oil rallies as US crude stocks decline in tight market: Energy market wrap

Oil rallies as US crude stocks decline in tight market: Energy market wrap
Updated 6 sec ago

Oil rallies as US crude stocks decline in tight market: Energy market wrap

Oil rallies as US crude stocks decline in tight market: Energy market wrap

RIYADH: Oil prices rose on Wednesday after US crude inventories at the nation’s largest storage site hit their lowest level in three years and nationwide fuel stocks fell sharply, a signal of rising demand.

Brent crude futures settled at $85.82 a barrel, a gain of 0.9 percent or 74 cents and the highest since October 2018.

November US West Texas Intermediate crude, which expires on Wednesday, settled at $83.87, up 91 cents, or 1.1 percent. The more active WTI contract for December settled up 98 cents to $83.42 a barrel.

Crude prices have risen as supply has tightened, with the Organization of the Petroleum Exporting Countries maintaining a slow increase in supply rather than intervening to add more barrels to the market, and as US demand has ramped up.

Globally, refiners have been boosting output thanks to high margins, one that can only be restrained by maintenance. US refining capacity use dropped in the most recent week, but analysts noted that supply may continue to tighten if US refiners also pick up processing again.

Emissions cut

Anglo-Australian miner Rio Tinto announced a $7.5 billion plan to reduce carbon emissions by 50 percent by 2030 and forward its target of 2025 for a 15 percent reduction in emissions from 2018 levels.

LNG deals

China has agreed to three huge liquefied natural gas deals with US exporter Venture Global LNG.

According to documents posted on the US department of energy website, the agreements with China’s state oil giant Sinopec include two 20-year deals for a combined 4 million tons of LNG per year.

Germany’s oil imports

German crude oil import volumes fell 7.1 percent from January to August and related lockdowns hit the industry, official data showed on Wednesday.

Oil volumes in Jan-Aug fell to 51.9 million tons from 55.8 million in the same months of 2020, statistics from the BAFA foreign trade office showed.

Forecast 

Crude oil prices could reach $100 per barrel in the first or second quarter of next year as global inventories are at their lowest level, the Iraqi oil minister said.


Sipchem records highest profits in its history, shares skyrocket

Sipchem records highest profits in its history, shares skyrocket
Updated 20 October 2021

Sipchem records highest profits in its history, shares skyrocket

Sipchem records highest profits in its history, shares skyrocket
  • The company posted a net profit of SR1.029 billion for the third quarter of 2021.
  • It also achieved a net profit after zakat and tax of about SR1.24 billion in the first half of 2021.

RIYADH: Shares of Sahara International Petrochemical Co. “Sipchem” on Wednesday hit the highest level since debut on the Saudi stock market. Share of the petrochemical company closed at SR46.95 ($12.2). 

Nearly 15.4 million shares were traded during the market session. The company posted a net profit of SR1.029 billion for the third quarter of 2021, the highest profit since its establishment. 

In a statement, the company attributed the reason for the rise in shares price to high selling prices of all the company’s products, which it said contributed to the increase in profit margins despite pressures from the rise in the prices of raw materials such as butane, ethanol, ethylene and propane.

On a quarterly basis, the company’s profits rose by about 24 percent, compared to the profits of the previous quarter, which amounted to SR829.9 million.

The company also achieved a net profit after zakat and tax of about SR1.24 billion in the first half of 2021, compared to losses of about SR151.8 million in the same period of 2020.

Sipchem CEO Abdullah Al-Saadoon told CNBC Arabia that he expected demand for the company’s products to remain strong in the fourth quarter of the year and the first three months of 2022.

Sipchem’s strong marketing plan helped buoy its third quarter earnings, he said. 

The company has  strong presence in the European and Asian markets, through Sipchem Europe and Sipchem Asia. It markets more than 70 percent of its products to end consumers.

Al-Saadoon said the company seeks to reduce its debt since the beginning of the year. It reduced its leverage by almost 12 percent to reach 40 percent of capital, he added.

 

 


Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap
Updated 20 October 2021

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

Oil prices, government spending see TASI hit highest level since 2006: Market Wrap

RIYADH: The Tadawul All Share Index increased on Wednesday by 0.94 percent, or 111.2 points.

Oil prices and the announcement of $2 trillion in government spending contributed to the rise in stocks.

TASI liquidity today amounted to about SR7.2 billion, while 189.8 million shares were traded, in 313,000 deals. 

National Gypsum Co. (NGC) topped the list of companies trading above three month average at 344, followed by Sahara International Petrochemical Co. (Sepchem) at 295.

The petrochemical producer posted a net profit of SR1.029 billion for the third quarter of 2021, the highest profit since inception.

Saudi Arabia’s parallel stock market index, Nomu, gained 81.7 points, or 0.34 percent, closing at 24,449.96 points. 

The biggest risers today were, Al-Rajhi Bank which records the highest level since 2006 to close at SR141.2, up 1.6 percent, and SABIC shares by 2 percent at SR133.6.

Among other shares that rose were NCB by 0.6 percent, and Riyad Bank by 4.4 percent.


Saudi markets surge as M&A activity set to continue until mid-2022: General Authority for Competition

Saudi markets surge as M&A activity set to continue until mid-2022: General Authority for Competition
Updated 20 October 2021

Saudi markets surge as M&A activity set to continue until mid-2022: General Authority for Competition

Saudi markets surge as M&A activity set to continue until mid-2022: General Authority for Competition

RIYADH: The Saudi market saw mergers and acquisitions jump 68 percent to 237 applications in the first nine months of the year — led by the IT, healthcare and petrochemical sectors according to a Saudi expert.

The General Authority for Competition head of mergers and acquisitions Talal Alhogail said the year-on-year comparison shows that it has been an exceptional period for business as it recovers from the pandemic, reported Asharq.

He added he expects the high rate to continue into the middle of 2022.


IMF has most favorable outlook for the Saudi economy in 2021 compared to other organizations

IMF has most favorable outlook for the Saudi economy in 2021 compared to other organizations
Updated 20 October 2021

IMF has most favorable outlook for the Saudi economy in 2021 compared to other organizations

IMF has most favorable outlook for the Saudi economy in 2021 compared to other organizations

The International Monetary Fund expects the Saudi economy to grow by 2.8 percent in 2021 — higher than forecasts by other global and local institutions.

In its latest regional economic outlook, the international organization said that oil exporters such as Saudi Arabia are expected to expand their production after August 2021. 

In addition, strong vaccination campaigns and higher oil prices are projected to boost the non-oil sector of the Kingdom’s economy, prompting an expansion in economic activity.

The Saudi Ministry of Finance expects the Saudi economy to grow by 2.4 percent in 2021, in line with the World Bank's predictions. 

Capital Economics and OECD also had similar forecasts for 2021. 

Jadwa, on the other hand, had the lowest expected rise in output, predicting a 1.8 percent growth rate only despite raising it from the previous 1.3 percent forecast.

As for the 2022 outlook, Capital Economics had the most positive forecast for the Saudi economy, saying it would jump by 7.3 percent. 

The Ministry of Finance posted its projection for 2022 growth at 4.8 percent. The IMF and OECD had the same expectation as well.

Moreover, the World Bank prediction was a slightly higher 4.9 percent. Jadwa also had a similar forecast for Saudi growth at 5.1 percent.