World’s largest eco-tourism project, TRDSC, to take over its neighbor: CEO

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Updated 22 September 2021

World’s largest eco-tourism project, TRDSC, to take over its neighbor: CEO

World’s largest eco-tourism project, TRDSC, to take over its neighbor: CEO
  • The consolidation deal will see The Red Sea Development Co. (TRSDC) taking over Amaala, both owned by the PIF

DUBAI: Saudi Arabia’s Public Investment Fund is combining two giga project developers on the Red Sea coast to “leverage synergies” as the Kingdom goes ahead with ambitious tourism goals.

The consolidation deal will see The Red Sea Development Co. (TRSDC) taking over Amaala, both owned by the PIF, but the tourist destinations they are developing will retain “separate, distinct” identities, Chief Executive Officer John Pagano told Arab News.

“Amaala has its own unique positioning and branding, which is not going to change, as well as the Red Sea project,” he said on the sidelines of the Arabian and African Hospitality Investment conference in Dubai

Pagano added: “Amaala is focused on wellness, while the Red Sea project is very much focused on eco-tourism – that is not going to change.”

It follows a move that saw Pagano being appointed as the CEO of Amaala in January this year.

“We said we would look at the way at which we could combine the organizations, and look to leverage synergies between the two groups,” Pagano said.

He explained: “We are going to leverage the unique skill sets that both project teams have and use them for the better good of both projects.”

The consolidation will also allow both destinations to boost operational efficiencies, he added.

There was no value to the transaction, Pagano said, describing the move as just a consolidation of two companies, which are both owned by one entity anyway.

‘Regenerative tourism’

The Red Sea Development Co. alone is building over 28,000 square kilometers of land and water along the Kingdom’s west coast. It will feature mountain canyons, dormant volcanoes, as well as ancient and cultural heritage sites.

Its first phase is expected to be finished by 2023, where 16 hotels will be opened. The project targets some 50 resorts with 8,000 hotel rooms by 2030.

These massive plans have raised questions from environment advocates, but Pagano maintains regeneration remains a key component of the project.

“Sustainability is no longer enough. We have moved our narrative to regeneration,” he said.

Pagano said it is not simply just about “causing no harm” to the environment, but actively looking for ways to improve the destination and “leave it in a better state than we found it.”

The company has announced a number of initiatives to keep this promise – from small regulations such as banning single-use plastic to big operational plans including using renewable energy to power the destination.

“We are going to be the largest tourism destination in the world powered by 100 percent renewable energy – 24 hours a day, completely off-grid,” Pagano said.

To achieve this, Pagano said they are installing what he claims to be the largest battery storage system in the world.

The company also engages in improving biodiversity on the Red Sea, including working with the scientific community to grow corals.

This level of commitment is also shared by international brands who plan to invest in the Red Sea project, Pagano said, as the bigger hotel industry becomes more conscious about global environmental goals.

“International brands support our vision, otherwise we would not be dealing with them,” he said. These brands will be announced at the Future Investment Initiative summit in Riyadh next month.

Financing the ambition

The CEO said they “will come to market next year with a similar approach for Amaala,” referring to the $3.7 billion financing it secured in April that already covered capital infrastructure for the Red Sea project’s first phase.

“It will be a senior debt facility – conventional finance – that’s what we need at this stage. It will come in the not-so-distant future,” he said.

Pagano said they have already built credibility with lending institutions, which he expects will make it easier for them to secure financing.  

According to a Reuters report, Saudi Arabia is planning to raise up to 10 billion riyals ($2.67 billion) next year for Amaala, citing the CEO.

‘Saudi Arabia is changing’

All these projects are part of an ongoing transformation in the Kingdom, primarily driven by its pursuit to diversify income sources away from oil.

The Kingdom identified tourism as one of its key sectors in this diversification, with many infrastructure developments in the pipeline, as well as regulatory changes that make it easier for tourists to visit the previously closed-off Gulf state.

“It is fair to say that Saudi Arabia is changing from a policy perspective, and it’s changing dramatically,” Pagano said.

For the Red Sea destinations, Pagano said they are building a special economic zone that will set a more relaxed regulatory environment.

“It will be conducive to attracting investments, and it is going to allow us to adjust the social norms to make the destinations attractive to foreign visitors,” he said.


Asia’s growth trimmed; UK inflation eases off slightly: Economic wrap

Asia’s growth trimmed; UK inflation eases off slightly: Economic wrap
Updated 18 sec ago

Asia’s growth trimmed; UK inflation eases off slightly: Economic wrap

Asia’s growth trimmed; UK inflation eases off slightly: Economic wrap

In its new regional outlook, the International Monetary Fund cut its growth forecast for Asia in 2021 to 6.5 percent, compared to the 7.6 percent it speculated in April. 

The international organization cited supply chain disruptions, inflation fears and a rise in Covid-19 infections as factors that could hamper growth in the region.

However, the 2022 growth forecast has been upwardly tweaked to 5.7 percent — up from the 5.3 percent April forecast.

Meanwhile, China is expected to grow by 8 percent this year and 5.6 percent in 2022.

UK inflation eases

The UK’s annual inflation rate tapered off to 3.1 percent in September 2021 down from its nine-year high of 3.2 percent in August, data from the Office for National Statistics revealed. 

Transport prices rose by 8.4 percent, helping fuel some of the country’s inflationary pressures. Conversely, rises in restaurants and hotels costs eased to 5.1 percent in September compared to 8.6 percent in August.

Month-on-month inflation also decreased to 0.3 percent in September — down from 0.7 percent in August.

In addition, the yearly core inflation rate, which excludes price changes in volatile items like food and energy, reached 2.9 percent in September, falling from 3.1 percent in the previous month.

German producer prices

Germany’s annual rise in producer prices climbed to 14.2 percent in September, according to official data.

Surging energy prices, last year’s low base effects and the current supply chain problems all meant that the country experienced its highest increase since October 1974.

Energy costs leapt by 32.6 percent while prices of intermediate goods rose by 17.4 percent.

This was accompanied by a month-on-month 2.3 percent increase in producer prices in September.

Japan’s trade deficit

The Japanese trade balance recorded a deficit of JPY622.8 billion ($5.44 billion) in September, compared to a JPY667.4 billion ($5.83 billion) surplus in the same month of last year, official data showed. This is the second consecutive month in which a deficit was posted for the country. 

Japanese imports leapt to a 34-month high of JPY7,463 billion ($65.19 billion) in September as it increased by an annual rate of 38.6 percent. Energy imports soared by 90 percent while purchases of electrical machinery jumped by 33.2 percent. Australian imports experienced the highest increase, climbing by 99.5 percent.

Meanwhile, the country’s exports jumped by 13 percent year-on-year to JPY6,841 billion ($59.76 billion) in September 2021. This was fuelled by a 23.7 percent increase in machinery exports. Exports of chemicals also rose considerably, growing by a 27.4 percent yearly rate.

Fed to hold on rates

A majority of economists expect the Federal Reserve to wait until 2023 before raising its rates, a survey conducted by Reuters showed.

Surveyed economists think that the biggest risk facing the US economy in the coming period is rising inflation.

China’s FDI 

Based on China's commerce ministry data, foreign direct investment (FDI) inflows to the country surged by 19.6 percent in the first nine months of 2021, when compared to the same period of the last year, to reach $134.7 billion.


Saudi Arabia, Kuwait, UAE reiterate support for Bahrain's fiscal program

Saudi Arabia, Kuwait, UAE reiterate support for Bahrain's fiscal program
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Updated 12 min 38 sec ago

Saudi Arabia, Kuwait, UAE reiterate support for Bahrain's fiscal program

Saudi Arabia, Kuwait, UAE reiterate support for Bahrain's fiscal program
  • The fiscal balance program - a set of reforms aimed at balancing the budget - was linked to the pledged $10 billion

Saudi Arabia, Kuwait and the United Arab Emirates reiterated their support for Bahrain's plans to balance its budget, a move expected to help their neighbor in the debt capital markets despite delays in plans to fix its heavily indebted finances.


The three Gulf allies extended a $10 billion aid package to Bahrain in 2018 to help it avoid a credit crunch.

Last month Bahrain said that due to the coronavirus crisis last year, it had postponed the target year for a balanced budget to 2024, and announced plans to hike a value-added tax to boost state coffers.


The fiscal balance program - a set of reforms aimed at balancing the budget - was linked to the pledged $10 billion.

The ministers of finance of wealthier Saudi Arabia, Kuwait, and the UAE met with Bahrain's finance minister on Oct. 19 to discuss Bahrain's progress in improving its finances.

"The ministers welcomed the efforts made by the government of Bahrain in implementing the Fiscal Balance Program, and the progress made by the government despite the challenges posed by the COVID-19 pandemic", the three countries said in a joint statement.

"The Ministers affirmed their support to the Kingdom of Bahrain’s efforts in pursuing further reforms to enhance fiscal stability and strengthen sustainable economic growth."

Bahrain's delaying of its fiscal balance program, which pushed back the zero-deficit target by two years, was seen as unlikely to deter investors from buying its debt due to expectations of continued support from richer Gulf allies, bankers and analysts have previously told Reuters.

Bahrain's public debt climbed to 133 percent of gross domestic product (GDP) last year from 102 percent in 2019, according to the International Monetary Fund.

S&P forecasts Bahrain's budget deficit, which was 16.8 percent of GDP last year, to average 5 percent between 2021 and 2024, excluding the impact of a possible hike in value-added tax.

The Arab Monetary Fund assessed the fiscal program achievements, the statement said.

 

 

 

 


Saudi Minister uses US trip to urge investors to 'seize opportunities' in the Kingdom

Saudi Minister uses US trip to urge investors to 'seize opportunities' in the Kingdom
Updated 13 min 30 sec ago

Saudi Minister uses US trip to urge investors to 'seize opportunities' in the Kingdom

Saudi Minister uses US trip to urge investors to 'seize opportunities' in the Kingdom

The Saudi minister of investment will stress the Kingdom's position as a major global investment destination during his visit to the US, according to the Saudi Press Agency. 

Khalid Al-Falih will meet a group of US officials on Wednesday to strengthen the existing strategic trade and investment partnership between the two countries, the agency reported. 

“We consider American investors to be our partners, and we hope that they will seize the tremendous opportunities that are presented in the transitional stage we are living in,” Al-Falih said in a statement. 

The trip follows the launch of the National Investment Strategy by the crown prince, Mohammed bin Salman, last week.

"The National Investment Strategy will bring about a fundamental change in the investment landscape in Saudi Arabia, which will provide unprecedented opportunities and advantages for investors,” the minister noted. 


Sovereign Fund of Egypt CEO bids to double assets to $1.8bn in a year

Sovereign Fund of Egypt CEO bids to double assets to $1.8bn in a year
Updated 23 min 34 sec ago

Sovereign Fund of Egypt CEO bids to double assets to $1.8bn in a year

Sovereign Fund of Egypt CEO bids to double assets to $1.8bn in a year

The Sovereign Fund of Egypt plans to double its assets from between EGP13-14 billion ($827-$891 million) to as much as EGP28 billion next year, said chief executive Ayman Soliman, reported Al Sharq.

Soliman said the fund’s drive for growth will focus on infrastructure, water desalination and renewable energy, such as the production of green energy with Norwegian green energy firm Scatec and Abu Dhabi-Dutch joint venture fertiliser producer Fertiglobe.

Last week, the fund signed a deal with Scatec and Fertiglobe to build a 50 to 100 megawatt ammonia plant in Ain Sokhna, 75 miles east of Cairo, for an undisclosed sum, which it said, “is the first step towards developing a green hydrogen hub in Egypt”.

The head of the fund said its investments over the next 12 months would also include warehouses for strategic goods, medicine and education.

The fund, established in 2018, says it was set up to co-invest with local and foreign financial partners to “increase the private sector’s role in the economy and create jobs for Egypt’s young population”


TASI crosses 11,822 point mark in early trade: Market wrap

TASI crosses 11,822 point mark in early trade: Market wrap
Updated 55 min 1 sec ago

TASI crosses 11,822 point mark in early trade: Market wrap

TASI crosses 11,822 point mark in early trade: Market wrap

RIYADH: Saudi Arabia’s main market, Tadawul, traded up 0.3 percent on Wednesday morning, at 11,822 points.

Here’s a wrap of market movements as of 10:30 a.m. Riyadh time:

Saudi Fisheries Co. signed a non-binding Memorandum of Understanding with the Arabian Agricultural Services Co. to consider future cooperation regarding the factory at Al-Huraydah in Aseer region.

National Agricultural Marketing Co. (Thimar) signed a framework agreement with AlKhair Capital for advisory services.

Sipchem recorded a net profit of SR2.270 billion in the most recent nine-month period.

Advanced Petrochemical Co.’s board recommended a 6.5 percent cash dividend for Q3 2021. 

Al Rajhi REIT Fund appointed a legal counsel, after negotiations and judicial sessions, for the litigation against Al-Fouzan Trading & Contracting Co.

The board of Gulf Union Alahlia Cooperative Insurance has announced plans to increase capital by offering right issues