PIF-backed Jada plans to double investments to NEOM, says CEO

PIF-backed Jada plans to double investments to NEOM, says CEO
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Updated 29 March 2022

PIF-backed Jada plans to double investments to NEOM, says CEO

PIF-backed Jada plans to double investments to NEOM, says CEO

RIYADH: Saudi Jada, Fund of Funds Co. established by the Public Investment Funds, plans to launch funds to attract investments in favor of NEOM, and transfer global expertise from its US counterpart, Miami.

Revealed during the Saudi Catalyze event held in Riyadh on March 28, it also encompassed a partnership agreement between NEOM and Miami.

“We are looking to increase the volume of investment 100 percent, by more than SR4 billion ($1.06 billion),” Jada CEO Adel Al-Ateeq told Asharq Al Awsat paper.

Jada has invested in over 20 investment funds since its launch with investments exceeding SR2 billion, distributed among a number of venture capital and private equity funds in the Kingdom, Al-Ateeq said.

This has been across 350 Saudi national companies, and regional companies.

“I expect to continue at the same level over the next three years,” he said. 

The company's initial capital is SR4 billion, and will move forward to a capital increase during the coming period, Al-Ateeq said.

Jada was established in 2019 to make investments in venture capital and private equity funds, with the aim to support small and medium-sized enterprises in the Kingdom.

Catalyze Saudi Arabia is an interactive platform based on the partnership between the Ministry of Investment and Jada. 

It aims to encourage and accelerate the venture capital and private equity fund industry in the Kingdom, by inviting international investors to visit the Kingdom and meet Saudi fund managers and investors, to raise their knowledge of the capital industry. 

 


Chinese government to sell sovereign bonds worth $340bn by year-end

Chinese government to sell sovereign bonds worth $340bn by year-end
Updated 7 sec ago

Chinese government to sell sovereign bonds worth $340bn by year-end

Chinese government to sell sovereign bonds worth $340bn by year-end

RIYADH: China will sell sovereign bonds totalling $340 billion in the final months of this year as the Asian giant taps the remaining annual quota and refinances maturing special bonds.

The government has issued 1.09 trillion yuan ($151 billion) of general bonds so far this year ⁠— less than 40 percent of the budgeted central deficit of 2.75 trillion yuan for 2022, Bloomberg reported based on its calculations.

According to the report, the government is expected to issue a total of 2.45 trillion yuan in sovereign bonds between October and December, which comprises 1.66 trillion yuan of new bonds and 786 billion yuan to refinance maturing special debts.

Meanwhile, Reuters, citing people familiar with the matter, said that the treasury bond issuance plan was made during a meeting of the finance ministry on Wednesday.

According to the Reuters report, the ministry also urged local governments to complete issuing the roughly 500 billion yuan in special bonds by the end of October under carryover quotas from previous years, the sources said.

The issuance of a total of 3.45 trillion yuan in local government special bonds for infrastructure has been completed by the end of June.

Amid weak consumption recovery and softening export growth, authorities are doubling down on an infrastructure push, dusting off an old playbook by issuing debt to fund big public works projects to revive the economy.

China’s economy generally recovered and stabilized in the third quarter and the country will push ahead with its economic program in the fourth, state media quoted Li Keqiang, premier of the State Council of the People’s Republic of China, as saying on Wednesday.

But with few signs China will significantly ease its zero-COVID policy soon, many analysts expect the economy to grow by just 3 percent this year, which would be the slowest since 1976, excluding the 2.2 percent expansion during the initial COVID hit in 2020.

(With input from Reuters)


Capricorn Energy drops Tullow merger plan in favor of Israel’s NewMed

Capricorn Energy drops Tullow merger plan in favor of Israel’s NewMed
Updated 6 min 25 sec ago

Capricorn Energy drops Tullow merger plan in favor of Israel’s NewMed

Capricorn Energy drops Tullow merger plan in favor of Israel’s NewMed

LONDON: Capricorn Energy plans to merge with Israel’s NewMed in an all-share deal after paying a $620 million special dividend to its shareholders, ditching a previous scheme to merge with Tullow Oil, according to Reuters.

The Capricorn-NewMed deal would create an Israel-Egypt focused gas producer including NewMed’s stake in Israel’s giant Leviathan offshore field at a time when Europe is looking for non-Russian energy supplies.

The new group would be listed under NewMed, formerly known as Delek Drilling, in London and led by Yossi Abu, the CEO of NewMed whose shareholders will own 89.7 percent of the merged entity.

Capricorn’s shares were trading up more than 10 percent after the announcement, hitting their highest since 2018. Tullow’s shares were down about 3.6 percent and NewMed down just under 1 percent.

Abu, in a call with Reuters, said the new group would aim to double its production to 200,000 barrels oil equivalent per day by the end of the decade from its current 115,000 boed.

“We are creating a company that for the first time allows international investors to get direct exposure to the East Med gas play and Leviathan in particular,” Abu said.

It will be the first Israeli company to own oil and gas assets in Egypt, a neighboring Arab state with a peace treaty with Israel and an energy-hungry population of around 100 million.

Israel already supplies gas to Egypt after discovering large resources off its coast in the 2000s.

The deal would value Capricorn shares at 271 pence, a 13 percent premium to its last closing price. The deal with West Africa-focused Tullow, which declined to comment on Thursday’s news, had valued Capricorn at around 210 pence per share.

Some Capricorn investors had come out against the Tullow merger plan.

“Capricorn and NewMed are pleased to announce a proposed combination to create a MENA (Middle East and North Africa) gas and energy champion and one of the largest upstream energy independents listed in London,” Capricorn said.

The merger would see Capricorn issue new shares to NewMed investors based on an exchange ratio of around 2.34 per NewMed share, which will see Capricorn shareholders hold just over 10 percent of the new company.

Capricorn’s Chief Financial Officer James Smith will stay on with NewMed Energy, which is set to pay out at least 30 percent of its cah flow in dividends. 


Sterling falls as PM Truss defends economic plans and dollar rises

Sterling falls as PM Truss defends economic plans and dollar rises
Updated 45 min 29 sec ago

Sterling falls as PM Truss defends economic plans and dollar rises

Sterling falls as PM Truss defends economic plans and dollar rises

LONDON: Sterling fell as much as 1 percent on Thursday before cutting some of its losses, as the dollar wavered and British Prime Minister Liz Truss defended the government’s economic plans that have contributed to the drop in the pound, according to Reuters.

Truss said big tax cuts were the right path for Britain and refused to consider reversing the so-called “mini budget” laid out last week, which triggered chaos in markets.

The pound was last down 0.3 percent to $1.0854 after hitting a session low of $1.0764. However, the euro was 0.12 percent lower against sterling at 89.27 pence.

Adam Cole, head of foreign exchange strategy at RBC Capital Markets, said the driver in the market was the dollar, which picked up in Asian trading but later fell back somewhat.

The dollar index pared earlier gains after Reuters reported Chinese state banks have been told to be prepared to sell the US currency in favor of the yuan.

Sterling crashed to a record low against the dollar of $1.0327 on Monday after new finance minister Kwasi Kwarteng unveiled plans to cut taxes, particularly for the rich, and raise borrowing.

The mini budget also wreaked havoc in the UK government bond market, forcing the Bank of England to intervene on Wednesday to protect pension funds, which are big holders of long-dated gilts.

The BoE said it would buy around £65 billion pounds ($70.54 billion) of long-dated government bonds to rectify “dysfunction” in the market.

Sterling bounced 1.41 percent on Wednesday to close at $1.0877 as investors digested the BoE’s plans.

But the currency it resumed its long-running slide on Thursday as Truss came out to defend her government’s policies.

“We are facing difficult economic times,” she said on local BBC radio. “I don’t deny this. This is a global problem. But what is absolutely right is the UK government has stepped in and acted at this difficult time.”

Jonas Goltermann, senior markets economist at consultancy Capital Economics, said both dollar strength and fears about the British economy were weighing on the pound.

“I don’t think (the BoE’s intervention) is going to be a long-term boost for sterling, although it might prevent an extreme downturn,” he said.

Goltermann said further falls in sterling are probable. He said traders are expecting the BoE to hike interest rates above 6 percent but are likely to be underwhelmed.

One analyst said they were also watching for signs of more selling of UK assets by pensions funds.

Pensions funds have been heavily selling gilts in recent days after the market falls triggered calls for collateral payments on their gilt derivatives positions, analysts and pensions advisers said.

The dollar regained ground after falling back from a new 20-year high on Wednesday after the BoE’s intervention. The dollar index was last up 0.17 percent to 113.22, after pulling back from a session high of 113.79.

Many analysts said they remained pessimistic about the pound, given the strength of the dollar and the storm clouds over the UK economy.

“There is no confidence in the Truss government right now. The problem is not fiscal spending per se, the problem is that people just don’t trust what she is doing,” Ipek Ozkardeskaya, senior analyst at Swissquote, said. 


Saudi Royal Commission signs $1.9bn investment agreements with INEOS Europe

Saudi Royal Commission signs $1.9bn investment agreements with INEOS Europe
Updated 29 September 2022

Saudi Royal Commission signs $1.9bn investment agreements with INEOS Europe

Saudi Royal Commission signs $1.9bn investment agreements with INEOS Europe

RIYADH: Saudi Arabia’s Royal Commission for Jubail and Yanbu has signed SR7.5 billion ($1.9 billion) worth of investment agreements with the chemical company INEOS Europe to build two factories in Jubail Industrial city. 

With a value of SR3.75 billion, the first agreement will establish a factory for the production of alpha-olefin and hydrocarbon derivatives, with a total area of 180,019 square meters in the Plascim area in Jubail Industrial city, according to the Saudi Press Agency. 

The second contract, which is valued at SR3.75 billion, is to create a factory for the production of acrylonitrile, acetonitrile and hydrogen and sodium cyanide with an area of 334,224 square meters in the Plascim area. 

The contracts come as part of Saudi Arabia’s industrial strategy to attract value-added manufacturing industries in order to raise the percentage of local content in these industries.


Saudi Arabia raises the bar in green hydrogen production: KAPSARC

Saudi Arabia raises the bar in green hydrogen production: KAPSARC
Updated 29 September 2022

Saudi Arabia raises the bar in green hydrogen production: KAPSARC

Saudi Arabia raises the bar in green hydrogen production: KAPSARC

RIYADH: Given its resources, infrastructure and land, Saudi Arabia is placed at a very competitive position in the green hydrogen industry, especially in terms of cost and volume capacity of the product, according to Rami Shabaneh, a King Abdullah Petroleum Studies and Research Center researcher.

Global prices of hydrogen range between $2 and $7 per kg. The Kingdom falls at the lower end of the cost curve due to low natural gas and renewable electricity prices locally.

“In Saudi Arabia, it is much lower because of the low-cost resources and high capacity factors the electrolyzers can achieve. A recent study by KAPSARC shows that reaching $1 per kg is plausible in the long term,” Shabaneh told Arab News.

“Other countries can achieve a similar levelized cost of hydrogen production, but only a few can produce the volumes required to meet the decarbonization targets,” he added.

The cost of green hydrogen is highly sensitive to renewable electricity costs and electrolyzer load factors.

“The renewable energy prices in the Kingdom are some of the lowest in the world. An auction price accepted at $10.4 per MWh is a world record low right now,” he said.

KAPSARC analyzes the resource, export and cost reduction potential of Saudi Arabia’s hydrogen production.

According to Shabaneh, despite significant decreases in hydrogen costs, the world still needs supporting mechanisms for hydrogen to substitute for traditional fuels in some sectors.

He further pointed out that having fossil fuels in the Kingdom’s energy system does not necessarily mean more emissions.

“You can still use fossil fuels to make blue hydrogen with high capture rates of GHG emissions,” he said.

Saudi Arabia is building a $5 billion green hydrogen project in NEOM, powered by renewable energy, to supply 650 tons of carbon-free hydrogen daily. The plant will see its first production in 2026.

The project will export hydrogen in the form of liquid ammonia to the world market for use as a biofuel that feeds transportation systems.

The plant will need around 4.3 gigawatts of clean energy to power it, as ACWA Power, one of three project owners, plans to use solar during the day and wind at night to eliminate the need for batteries and expensive storage solutions.