Lending to Saudi Arabia’s mining sector rises 60%

Lending to Saudi Arabia’s mining sector rises 60%
Finance companies’ loans to the Saudi mining and quarrying sector surged 60 percent to SR237.1 million ($63 million) in the second quarter. (File)
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Updated 17 October 2022

Lending to Saudi Arabia’s mining sector rises 60%

Lending to Saudi Arabia’s mining sector rises 60%
  • Credit to the sector increased 45 percent from SR163.6 million in Q1: SAMA

RIYADH: Finance companies’ loans to the Saudi mining and quarrying sector surged 60 percent to SR237.1 million ($63 million) in the second quarter from SR148.2 million during the same period last year, revealed the data released by Saudi Central Bank, also known as SAMA.

Credit to the sector, which constitutes 1.4 percent of the overall loan disbursals from finance companies, increased 45 percent from SR163.6 million in the first quarter.

“Mining and quarrying is a capital-intensive activity. These companies would typically take bigger ticket facilities from the banks or even through capital markets,” Jarmo Kotilaine, an economist and strategist focusing on the Gulf region, told Arab News.

The increase in lending could be attributed to the heightened interest among finance companies to diversify lending but also by businesses to explore new sources of funding as credit conditions tighten, pointed out Kotilaine.

Credit to the transportation and communications sector increased 10.9 percent to SR1.9 billion in the second quarter from SR1.7 billion in the quarter ending March. 

Moreover, the sector showed the highest recorded increase since the first quarter of 2018, the earliest data recorded by the SAMA table. It also more than doubled from SR1.2 billion in the second quarter of 2021, constituting 10.8 percent of total loans in this quarter.

“I suspect something similar is going on with transportation and communication. However, since we are talking about figures returning to pre-COVID levels, this could reflect normalization or the post-pandemic rebound,” Kotilaine added. 

According to the SAMA data, finance companies directed most of the lending during the second quarter toward the building and construction sector at 24.4 percent, followed by commerce at 22.2 percent and services at 16.7 percent.

Moreover, the loan disbursals to the services sector increased 7.6 percent to SR2.9 billion in the second quarter from SR2.7 billion between January and March.

Loans to building and construction activity escalated 6.28 percent to SR4.3 billion between April and June from SR4 billion in the first quarter.

Commerce loans increased 3.6 percent to SR3.9 billion in the second quarter from SR3.8 billion in the first quarter.

“Other” loans, which hold 11.7 percent of the total loan pie, declined by 26.7 percent to SR2.1 billion this quarter.

Similarly, lending to electricity, water, gas and health services decreased by 4.7 percent from SR619.9 million to SR590.6 million.

Overall, total loans by finance companies to non-retail economic activities remained nearly the same, increasing by only 0.32 percent from SR17.5 billion to SR17.6 billion, the lowest growth rate in the past seven quarters.

The percentage reported in the story was calculated after rounding off the values in the period under review.


US debt ceiling bill passes House with broad bipartisan support

US debt ceiling bill passes House with broad bipartisan support
Updated 01 June 2023

US debt ceiling bill passes House with broad bipartisan support

US debt ceiling bill passes House with broad bipartisan support

WASHINGTON: The US House of Representatives passed a bill to suspend the $31.4 trillion debt ceiling on Wednesday, with majority support from both Democrats and Republicans to overcome opposition led by hard-line conservatives and avoid a catastrophic default.
The Republican-controlled House voted 314-117 to send the legislation to the Senate, which must enact the measure and get it to President Joe Biden’s desk before a Monday deadline, when the federal government is expected to run out of money to pay its bills.
“This agreement is good news for the American people and the American economy,” Biden said after the vote. “I urge the Senate to pass it as quickly as possible so that I can sign it into law.”
The measure, a compromise between Biden and House Speaker Kevin McCarthy, drew opposition from 71 hard-line Republicans. That would normally be enough to block partisan legislation, but 165 Democrats — more than the 149 Republicans who voted for it — backed the measure and pushed it through.
Republicans control the House by a narrow 222-213 majority.
The legislation suspends — in essence, temporarily removes — the federal government’s borrowing limit through Jan. 1, 2025. The timeline allows Biden and Congress to set aside the politically risky issue until after the November 2024 presidential election.
It would also cap some government spending over the next two years, speed up the permitting process for certain energy projects, claw back unused COVID-19 funds and expand work requirements for food aid programs to additional recipients.
Hard-line Republicans had wanted deeper spending cuts and more stringent reforms.
“At best, we have a two-year spending freeze that’s full of loopholes and gimmicks,” said Representative Chip Roy, a prominent member of the hard-line House Freedom Caucus.
Progressive Democrats — who along with Biden had resisted negotiating over the debt ceiling — oppose the bill for a few reasons, including new work requirements from some federal anti-poverty programs.
“Republicans are forcing us to decide which vulnerable Americans get to eat or they’ll throw us into default. It’s just plain wrong,” said Democratic Representative Jim McGovern on Wednesday.
Late on Tuesday, the non-partisan Congressional Budget Office said the legislation would result in $1.5 trillion in savings over a decade. That is below the $4.8 trillion in savings that Republicans aimed for in a bill they passed through the House in April, and also below the $3 trillion in deficit that Biden’s proposed budget would have reduced over that time through new taxes.


Saudi Arabia signs $45m loan agreement to support Belize’s health care infrastructure

Saudi Arabia signs $45m loan agreement to support Belize’s health care infrastructure
Updated 01 June 2023

Saudi Arabia signs $45m loan agreement to support Belize’s health care infrastructure

Saudi Arabia signs $45m loan agreement to support Belize’s health care infrastructure

RIYADH: The Saudi Fund for Development on Wednesday signed a development loan agreement worth $45 million with the Prime Minister of Belize, John Briceno, for the construction of the Tertiary Hospital in the Belmopan Area Project.

The agreement, which was signed by Ahmed Al-Khateeb, chairman of SFD’s board of directors, is part of the efforts undertaken by Saudi Arabia to support sustainable development in developing countries and Small Island Developing States around the world.

It comes in implementation of the directives of the King Salman and Crown Prince Mohammed bin Salman, the Saudi Press Agency reported.

Since its establishment in 1974, SFD has implemented more than 700 development projects and programs in 86 countries worldwide, making Belize the 87th country to receive funding for a development project following the signing of the deal.

 

 

The new 200 bed hospital will be supplied with state-of-the-art medical equipment, facilities, and integrated health services, benefitting approximately 200,000 people annually. The project aims to enhance the capacity of the local health care system by training health cadres and students from the University of Belize.

In addition to helping to improve access to quality health care services, the hospital will play a crucial role in addressing chronic disease management, potentially reducing mortality rates in the region. 

The new hospital will also stimulate local economic growth by helping to create direct and indirect job opportunities within the health care sector, providing a platform for medical education and training and strengthening Belize’s long-term health care capacity and resilience. 

The project also will contribute to the UN’s Sustainable Development Goals for good health and well-being.

Briceno said: “On behalf of the government and people of Belize, we are most grateful to the government and people of the Kingdom of Saudi Arabia for assisting in building a vital tertiary level/teaching hospital. The concessionary financing, through a loan by the Saudi Development Fund, makes the urgent investment in the health sector a reality.”

Al-Khateeb said: “Saudi Arabia is committed to promoting sustainable socio-economic development in developing nations and Small Island Developing States, while supporting the journey to achieving the UN’s Sustainable Development Goals. 

“Today’s agreement signifies an important step in the development cooperation for both countries. The project to build a tertiary hospital in Belize, will not only empower local communities but also strengthen the health sector’s capacity to cater to the requirements of the capital’s residents and surrounding areas.”


First batch of graduates pass out from KAPSARC Academy

First batch of graduates pass out from KAPSARC Academy
Updated 31 May 2023

First batch of graduates pass out from KAPSARC Academy

First batch of graduates pass out from KAPSARC Academy

RIYADH: The King Abdullah Petroleum Studies and Research Center organized a ceremony to mark the passing out of the first batch of its Public Leadership Executive Program last week.

Saudi Energy Minister Prince Abdulaziz bin Salman, who is also the center's board chairman, attended the ceremony.

According to a statement, the first-of-its-kind program in the Kingdom is offered by KAPSARC Academy in collaboration with the International Institute for Management Development, said a statement.

It seeks to prepare distinguished young Saudis to play their roles in achieving the goals of Vision 2030. It is considered a unique training program designed to support the national cadres in the Saudi energy sector.

KAPSARC President Fahd Alajlan said the academy was inspired by the passion of Saudi Energy Minister Prince Abdulaziz bin Salman to stimulate innovation, promote education and develop the Kingdom’s human capital.

He said the academy aims to raise the level of competencies of the local workforce and equip leaders and professionals with the skills required for future public policymaking roles.

Dr. Ghada Al-Arifi, director of the academy, said the institution focuses on boosting leadership skills. The eight-month program includes lectures, workshops, and interactive sessions, she added.

Al-Arifi said it helps trainees to become familiar with certain aspects of management and public policy.

According to the statement, the first batch of the academy consisted of 36 graduates.


UAE’s Mirfa 2 RO plant achieves financial closure, raises $620m  

UAE’s Mirfa 2 RO plant achieves financial closure, raises $620m  
Updated 31 May 2023

UAE’s Mirfa 2 RO plant achieves financial closure, raises $620m  

UAE’s Mirfa 2 RO plant achieves financial closure, raises $620m  

RIYADH: Abu-Dhabi-based Mirfa 2 water desalination project has secured funding of 2.3 billion dirhams ($620 million), achieving financial closure of what will become the UAE’s third-largest reverse osmosis plant. 

Abu Dhabi National Energy Co., or TAQA, announced the financial closure alongside French low-carbon services company ENGIE and Emirates Water and Electricity Co. in a bourse filing. 

According to the filing, 78 percent of the project is primarily funded through debt financing from local and international banks, including Abu Dhabi Islamic Bank, BNP Paribas Fortis, Sumitomo Mitsui Banking Corp., The Norinchukin Bank, BNP Paribas and KfW IPEX-Bank. 

The Mirfa 2 RO plant will produce roughly 550,000 cubic meters of potable water daily and will be operational by the fourth quarter of 2025. 

While TAQA would own 60 percent of the project and ENGIE the rest, both companies will take on the operations and maintenance of the plant. 

The release further stated that EWEC would procure the water supplied from the plant for 30 years.  

“TAQA is proud to invest in the development, ownership, and operation of this critical water project in Abu Dhabi, which will contribute to the UAE’s decarbonization efforts as well as TAQA’s emissions reduction targets,” said Farid Al-Awlaqi, executive director of generation, TAQA in the statement.  

He added: “Mirfa 2 RO also enables us to accelerate how we decouple power and water operations across our assets to further reduce our carbon impact.” 

The Mirfa 2 RO plant is EWEC’s fifth low-carbon intensive RO desalination project in a pipeline of initiatives to decouple water and power generation toward realizing the Abu Dhabi Department of Energy’s Clean Energy Strategic Targets 2035 to reduce carbon emissions by 75 percent. 

“Through our initiatives, we forecast that over 90 percent of our water production will be from RO technology by 2030, resulting in an 88 percent reduction in carbon emissions associated with water production,” said Othman Al-Ali, CEO of EWEC.  

The plant will leverage efficient RO desalination, up to six times more efficient than traditional thermal desalination. The technology would also enable plant operators to reduce carbon emissions by decoupling water and power generation processes, thus supporting the broader efforts of the energy sector to cut costs and achieve sustainability targets.  

“We are delighted to have achieved financial close and look forward to commencing build and ultimately operations,” said Frederic Claux, managing director of the flexible generation and retail division of ENGIE in Asia, the Middle East and Africa. 


Closing bell: Oil prices weigh down Saudi stocks

Closing bell: Oil prices weigh down Saudi stocks
Updated 31 May 2023

Closing bell: Oil prices weigh down Saudi stocks

Closing bell: Oil prices weigh down Saudi stocks

RIYADH: Saudi Arabia’s Tadawul All Share Index dropped by 125.85 points or 1.13 percent to close at 11,014.13, driven by a fall in oil prices that affected investors’ morale. 

While parallel market Nomu lost 335.24 points to 21,278.26, the MSCI Tadawul Index fell 1.31 percent to 1,464.41. 

The total trading turnover of the benchmark index was SR11.79 billion ($3.14 billion) as 58 stocks advanced, while 155 retreated. 

Brent crude futures for August delivery were down $1.69, or 2.30 percent, to $71.85 a barrel at 3:15 p.m. Saudi time, while US West Texas Intermediate crude fell $1.99, or 2.87 percent, to $67.47. 

The top stock of the day was Jarir Marketing Co., as its share price advanced 6.02 percent to SR17.60. 

Jarir Marketing Co., on Wednesday, said that its shareholders had approved the board’s proposal for reducing the stock’s par value from SR10 to SR1 during the extraordinary general meeting conducted on May 30. 

Jadwa REIT Saudi Fund and Saudi Fisheries Co. were other top gainers of the day, whose share prices rose by 3.76 percent and 3.06 percent, respectively. 

Saudi Pharmaceutical Industries and Medical Appliances Corp. was the worst performer as its share price dropped 4.76 percent to close at SR38.05. 

Meanwhile, the board of directors of Al-Baha Investment and Development Co. recommended splitting the stocks par value from SR10 to SR0.1 while keeping the company’s capital intact. 

In a bourse filing, the company said that the number of its shares following the split would be 2.97 billion. 

On Wednesday, Filing and Packing Materials Manufacturing Co. announced that its board of directors approved to transform the legal entity of its subsidiary FPC Industrial Co. from a limited liability company to a joint stock company. 

“This transformation will support FPC’s objectives aiming for future expansions. Also, it will maintain its stability and sustainability and will support the company’s financial position, which supports increasing export sales and improves the credit relationship with some large foreign clients to increase the company’s export share and in line with the needs of global markets,” said FIPCO in a statement to Tadawul. 

The statement added that FIPCO’s board of directors also decided to set an authorized capital of SR100 million and raise the paid-up capital from SR18 million to SR70 million. 

According to the statement, the capital hike will be financed using some current account balances between partners. The company’s share price dropped by 1.57 percent to SR43.90.