Saudi Arabia, Uzbekistan bolster ties with 10 investment deals worth $12bn

Update During the speech, Al-Falih added that the relationship between Saudi Arabia and Uzbekistan has reached new heights with the involvement of ACWA Power. (File)
During the speech, Al-Falih added that the relationship between Saudi Arabia and Uzbekistan has reached new heights with the involvement of ACWA Power. (File)
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Updated 18 August 2022

Saudi Arabia, Uzbekistan bolster ties with 10 investment deals worth $12bn

Saudi Arabia, Uzbekistan bolster ties with 10 investment deals worth $12bn
  • Al-Falih stresses need to establish direct trade ties with Uzbekistan

JEDDAH: Saudi Arabia and Uzbekistan have signed over 10 investment agreements, worth over SR45 billion ($12 billion), during a meeting of the Saudi-Uzbek Business Council in Jeddah on Wednesday.

The agreements cover various sectors and include a number of deals between the Ministry of Investment and Foreign Trade of the Republic of Uzbekistan, the Ministry of Energy of the Republic of Uzbekistan, and ACWA Power, a developer, investor, co-owner and operator of a portfolio of power generation and desalinated water production plants.

“Over 10 agreements were signed between the Kingdom and Uzbekistan in several sectors, with a value exceeding SR45 billion,” Saudi Minister of Investment Khalid Al-Falih said.

 

In a bourse filing, ACWA Power said it will sign a $2.4 billion deal with the government of Uzbekistan for a 1,500 MW wind project.
To be located in Karakalpakstan, Uzbekistan, the facility seeks to power 1.65 million households and offset 2.4 million tons of carbon emissions per year.
Expected to achieve a financial close by the end of 2023, the project is likely to be fully commissioned by the first quarter of 2026.
Speaking at the council’s 4th meeting, Al-Falih stressed the need for a direct import and export relationship between the Kingdom and Uzbekistan, as most of the trade between the two countries is happening through Turkey and the UAE.
He said Uzbekistan is a huge player in agriculture, real estate, hospitality, and human resources. 
“We want to make this relationship one of the most important for Saudi Arabia. We are here to facilitate. We are here to serve,” said Al-Falih. 
Al-Falih added that the relationship between Saudi Arabia and Uzbekistan has reached new heights with the involvement of ACWA Power.
He further added that Uzbekistan is a country full of opportunities, and ACWA Power is a firm that is exploring new horizons. 
Jamshid Khodjaev, Uzbekistan’s deputy prime minister, and the minister of investments and foreign trade, said that Saudi Arabia is on a path of transformation, and the Kingdom is now a very dynamic and developed country.
He lauded ACWA Power and said that the firm is one of the best in the world. He further noted that Uzbekistan and Saudi Arabia are reliable partners, and made it clear that the country is committed to a long-term relationship with the Kingdom.
The mutual trade between Saudi Arabia and the Republic of Uzbekistan reached $95 million in the first half of 2022, a substantial increase considering that bilateral trade barely exceeded $17 million last year.
According to a joint news statement, the value is expected to grow rapidly by the end of 2022. The numbers assume significance in the aftermath of the pandemic.
In fact, the number of Uzbek companies running on Saudi funds increased from about nine to 38 in the last five years. Of the 38, 19 are sole proprietors, and the rest are joint ventures. The Kingdom has become one of the largest foreign investors in energy infrastructure and one of Uzbekistan’s most significant developers of green energy projects.
ACWA Power also signed an agreement to establish the 100MW Nokus wind farm project, the first renewable energy project to be implemented in partnership with Uzbekistan’s public and private sectors.
The power-generating company also won a $108 million wind contract after proposing a tariff of 2.56 cents per kilowatt-hour, the lowest in Uzbekistan.
Additionally, the Ministry of Energy of Uzbekistan signed a 25-year power purchase agreement with ACWA Power to establish a combined-cycle gas turbine power plant in Shirin, located in Syrdarya, Uzbekistan. The deal amounts to $1.2 billion.
According to the statement, these projects will contribute to achieving Uzbekistan’s national goal of raising the total renewable energy generation capacity to 30 percent by 2030.
Moreover, the Saudi Fund for Development has contributed to the implementation of many projects in Uzbekistan, including funding the Samarkand-Gozar Road project, with a total value of $30 million.
The fund also contributed to 20 projects in the republic, including building pumping stations and other projects involving sewage, chemicals, mining, building materials, water and agriculture.

 


Russian firms eye stronger business ties with Saudi Arabia amid western sanctions 

Russian firms eye stronger business ties with Saudi Arabia amid western sanctions 
Updated 05 October 2022

Russian firms eye stronger business ties with Saudi Arabia amid western sanctions 

Russian firms eye stronger business ties with Saudi Arabia amid western sanctions 

RIYADH: A business delegation of 23 Russian companies held talks with Saudi firms in Riyadh on Oct. 4 amid a growing call from the US and EU to cut ties with Kremlin entities. 

The meeting comes as Saudi Arabia strives to attract foreign direct investments aligned with its Vision 2030 goals. 

The talks stressed on the vitality of elevating trade relationships between Saudi Arabia and Russia, while taking advantage of investment opportunities and establishing commercial partnership relations between the two parties to serve common interests. 

Stanislav Yankovitz, the commercial representative at the Russian Embassy, noted that the trade relationship between Saudi Arabia and Russia has leapfrogged in recent years, with commercial exchange volume in 2021 witnessing an increase to $1.7 billion, and is expected to reach $5 billion by the end of 2024.  

The event also witnessed bilateral meetings between businesspeople and representatives of Russian companies working in various sectors which include creative industries, education, electric power and design engineering.

Some of the other sectors include cosmetics, furniture, perfumery, food industry, industrial, information technology, smart technologies, medical equipment and oil and gas.

Counselor of the Ambassador Extraordinary and Plenipotentiary of the Russian Federation to Saudi Arabia Alexander Istomin, said that Russian-Saudi relations are strong and that they have been witnessing continuous rapprochement.

The head of the Saudi-Russian Business Council Tariq Al-Qahtani said that it is playing a crucial role in strengthening trade relations between the two countries as it seeks and provides investment opportunities through the establishment of joint projects. 

Western firms exiting Russia

Meanwhile, owing to the conflict in Ukraine, several western companies have exited their operations in Russia, despite chances of revenue loss. 

Adidas, which has over 500 stores in Russia, suspended its operations in the country — the move is expected to cut 1 percent of its revenue this year. 

Cigarette maker Philip Morris also announced that it has suspended planned investments and will reduce manufacturing in Russia. 

In the energy sector, BP said it would sell its nearly 20 percent stake in Rosneft, the Russian state-controlled oil company. The firm also wrote off $25.5 billion on its nearly 20 percent holding in Rosneft. 

Another energy major Exxon Mobil had announced that it would end its involvement in a large oil and natural gas project. 

In a move that could cost billions, Shell also exited its joint ventures with Gazprom, the Russian natural gas giant.


Etihad Airways named MENA airline of the year

Etihad Airways named MENA airline of the year
Updated 05 October 2022

Etihad Airways named MENA airline of the year

Etihad Airways named MENA airline of the year
  • The transformation of Etihad has been recognized following a record-breaking core operating profit of $296m in the first half of 2022

ABU DHABI: Etihad Airways was named Middle East & Africa Airline of the Year at the Airline Economics Aviation 100 Awards.

The company’s Chief Financial Officer Adam Boukadida also received the Middle East & Africa CFO of the Year award for the second successive year on Tuesday.

The Airline Economics awards are held annually to recognize outstanding businesses, individuals and financial transactions in the commercial aviation industry. 

Boukadida said: “We’re incredibly proud to be named Airline of the Year by Airline Economics, which comes just before our 19th birthday.

“This award goes to our entire organization and stands as a testament to the success of our transformation, in which every member of the Etihad family played an important role.”

Etihad was recognized for its successful turnaround, which resulted in a record-breaking core operating profit of $296 million in the first half of 2022. 

For the Airline of the Year award, the judges also considered profit, debt, load figures, RPK (revenue passenger kilometers), orders and routes. 

 


Riyad Bank completes offering of $1bn sukuk 

Riyad Bank completes offering of $1bn sukuk 
Updated 05 October 2022

Riyad Bank completes offering of $1bn sukuk 

Riyad Bank completes offering of $1bn sukuk 

RIYADH: Riyad Bank has completed the offering of its Saudi riyal-denominated additional Tier 1 capital sukuk worth SR3.8 billion ($1 billion).

The bond is perpetual and has a rate of return of 5.25 percent to be paid quarterly from the issue date, according to a bourse filing.

Established in 1957, Riyad Bank is one of the largest financial institutions in Saudi Arabia.

The Saudi government owns 51 percent of the bank’s shares. 


Saudi Arabia and Morocco target trade worth $5bn annually

Saudi Arabia and Morocco target trade worth $5bn annually
Updated 05 October 2022

Saudi Arabia and Morocco target trade worth $5bn annually

Saudi Arabia and Morocco target trade worth $5bn annually

RIYADH: Saudi Arabia and Morocco plan to raise the volume of trade to $5 billion annually in light of the huge opportunities and capabilities of the two countries, according to Moroccan Minister of Industry and Trade Riyad Mezzour.

Mezzour was speaking at the Moroccan-Saudi Economic Forum, held by the Federation of Saudi Chambers and the General Federation of Moroccan Contracting on Oct. 4, with 130 companies from both countries participating.

Mezzour encouraged Saudi investors to take advantage of 670 industrial projects in Morocco.

Businessmen in both Saudi Arabia and Morocco need to establish a clear roadmap for economic relations between the two countries, as it is important to recognize the joint opportunities available in Africa and Europe with the Kingdom's Vision 2030, Saudi Commerce Minister Majid Al-Qasabi said.

The official visits and economic agreements have contributed to rapid trade growth in recent years, according to the chairman of the Federation of Saudi Chambers, Ajlan Alajlan.

The trade exchange reached SR9.7 billion ($2.5 billion) during the first half of this year, a value that exceeds SR5 billion for the entire year 2021.

The joint investments doubled significantly over the past years in various economic sectors such as industry, real estate, tourism, and agriculture, Alajlan said.

The two sides aim to reshape economic relations by studying and analyzing trade and investment opportunities and competitive advantages in the Saudi and Moroccan economies, he added.

Meanwhile, Chakib Alj, the president of the General Confederation of Moroccan enterprises, revealed that there are approximately 250 Saudi companies in Morocco, whereas there are 20 Moroccan companies in the Kingdom.

The current economic environment calls for joint efforts to increase food security through the development of agriculture and the establishment of new integrated value chains that integrate sustainability and innovation, Alj said.

In addition to identifying ways to develop companies and enhance their activities outside the Moroccan and Saudi markets, the forum called for easing administrative restrictions and non-tariff barriers, and the creation of a Moroccan-Saudi fund to facilitate trade.

The meeting focused on enhancing joint economic and trade cooperation, empowering the private sector, and developing investments between the two countries.

The meetings come as part of the minister's four-day official visit to Morocco, leading a government delegation consisting of officials from 14 government institutions and representatives of over 62 Saudi companies.

Furthermore, the Saudi Exports Development Authority partnered with the Moroccan-Saudi Economic Forum organized by the Federation of Saudi Chambers in collaboration with the General Authority for Foreign Trade to organize the "Saudi Made" trade mission to Morocco.

Saudi Exports, through this mission, focuses on several sectors, including construction, food, medical supplies, and auto spare parts.

 


Bahrain attracts $290m investment in manufacturing and logistics sectors till Q3

Bahrain attracts $290m investment in manufacturing and logistics sectors till Q3
Updated 05 October 2022

Bahrain attracts $290m investment in manufacturing and logistics sectors till Q3

Bahrain attracts $290m investment in manufacturing and logistics sectors till Q3

RIYADH: Bahrain recorded $290 million in direct investment in the first three quarters of the year, with 25 manufacturing and logistics companies setting up and expanding their businesses within the Kingdom. 

The Bahrain Economic Development Board which is responsible for promoting investment in the Kingdom said this inflow of funds is capable of creating more than 1,200 jobs over the period of the next three years. 

Some of the noted companies expanding within the Kingdom are FedEx, BASF, and Racing Force International, while the new firms entering Bahrain include Bahrain Sugar Refinery, Hoover Circular Solutions, and K.K.C. Industry, it said. 

“Manufacturing and logistics are among the priority sectors for us and under the Economic Recovery Plan to support future growth and employment within the Kingdom,” said Ahmed Sultan, executive director – business development for manufacturing and logistics at Bahrain EDB. 

Overall, Bahrain EDB attracted direct investment from 66 companies during the first nine months of the year, which could create 4,700 jobs over the next three years in key sectors, including financial services, information and communications technology, logistics, manufacturing, and tourism. 

Sultan added: “We are very pleased to see international manufacturing and logistics companies set up and expand in Bahrain, benefiting from the Kingdom’s strategic location, enabling them to tap into the $1.67 trillion Gulf Cooperation Council market.” 

The manufacturing sector is a significant and consistent contributor to Bahrain’s economy, accounting for over 13 percent of the gross domestic product. Manufacturers and logistics companies enjoy duty-free trade through Bahrain’s free trade agreements with 22 countries around the world, including the first-ever US Free Trade Agreement with a GCC member.