Saudi Arabia affirms its investment prowess as 6th Future Investment Initiative forum closes

Saudi Arabia affirms its investment prowess as 6th Future Investment Initiative forum closes
The three-day event saw numerous discussions and deals (AN)
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Updated 28 October 2022

Saudi Arabia affirms its investment prowess as 6th Future Investment Initiative forum closes

Saudi Arabia affirms its investment prowess as 6th Future Investment Initiative forum closes

RIYADH: With more than 6,000 of the world’s business leaders, policymakers, investors, entrepreneurs and tech experts, the 6th edition of the Future Investment Initiative proclaiming Saudi Arabia’s investment might and transforming business environment concluded in Riyadh on Oct 27. 

During Thursday’s session, delegates explored various issues, including the necessity of transforming investment and banking sectors for a resilient economy, the vitality of venture capitals, and the importance of economic sustainability.

There were also discussions around concerns surrounding environmental, social, and governance, and the role of small and medium enterprises in the economy, both regionally and globally. 

PIF announces of launch of Local Content Growth Program at FII

During the event, Saudi Arabia’s Public Investment Fund announced the launch of a Local Content Growth Program aiming at growing competition and innovation in the private sector. 

According to PIF, the initiative aims to achieve the goal of 60 percent of the Kingdom’s economy being generated through local content by 2025.

Noted agreements signed during the event

Several agreements and deals were signed as a part of the event, with the most noted one being between ACWA Power and European Bank for Reconstruction and Development aimed at developing projects in renewable energy. This includes green hydrogen, green desalination, sustainable energy solutions, along with gender and economic inclusion. 

Another agreement signed during the event was between the Saudi Tourism Development Fund, Dana Bay Co. and IHG hotels and resorts to finance a Dana Bay intercontinental resort in Khobar. 

During the event, Saudi Information Technology Co. and NIL, a part of Conscia Group signed a strategic agreement to establish a systems integration company in Riyadh. 

Highlights from panel discussions

In a panel discussion titled, ‘Transforming Banking and Investment for the Resilient Economy,’ Saad bin Abdulaziz Al-Khalb, CEO of Saudi EXIM Bank Group, said that the bank provided SR20 billion ($5.3 billion) to support the Kingdom’s exports since its establishment in February 2020. 

Al-Khalb also noted that Saudi Arabia’s Export Credit Agency and EXIM Bank are strategic partners for commercial and financial institutions, and support them in their credit offering and mitigating financial risks while carrying out cross-border and long-term transactions. 

In another panel discussion, Khalid Al-Mudaifer, Saudi Vice-Minister for Mining Affairs, said Saudi Arabia is the best place to invest in mining, as the Kingdom has all the welcoming factors which include proper mining law, investment ecosystem, infrastructure and technologies which include 5G connectivity and cybersecurity. 

He also invited mining leaders to attend the Future Mineral Forum which will take place in Riyadh on Jan. 10 to 12, 2023. 

Robert Wilt, CEO of Saudi Arabian Mining Co. — known as Ma’aden — said the firm has been the best-performing mining stock over the last 10 years, in total shareholder return. 

In another panel discussion titled, ‘Future Flash: Future of Venture Capital — Systematic High Returns, Regenerative Impact, and Artificial Intelligence,’ CEO of venture capital firm Goodlight Capital Jacques- Philippe Piverger said 75 percent of venture capitals do not perform well. 

Piverger added that there is a correlation between diversity, equity, inclusion and performance when it comes to venture capital. 

John Quinn, chairman of Quinn Emanuel Urquhart & Sullivan, said ESG has become politicized, and several people think that it is something governments should do, instead of funds or private equity firms.

Quinn also added that it lacks metrics and comparability. 

“One of the problems ESG faces is, fundamentally, it is too vague. If you look at ratings for credit agencies, they correlate 98 to 99 percent. If you analyze ESG ratings, ratings do not correlate. This is a real problem. There should be an agreed matric while evaluating ESG scores,” said Quinn.


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. 


Number of SMEs in Saudi Arabia rises 4.8% in Q1, exceeds 1.2m

Number of SMEs in Saudi Arabia rises 4.8% in Q1, exceeds 1.2m
Updated 31 May 2023

Number of SMEs in Saudi Arabia rises 4.8% in Q1, exceeds 1.2m

Number of SMEs in Saudi Arabia rises 4.8% in Q1, exceeds 1.2m

RIYADH: Saudi Arabia is witnessing increased entrepreneurial activity as the total number of small and medium enterprises exceeded 1.2 million in the first quarter of 2023.

According to a report released by the Small and Medium Enterprises General Authority, also known as Monsha’at, this figure reflects a 4.8 percent surge compared to the final quarter of 2022.

The report further revealed that 88,858 new businesses were launched across the Kingdom in the first quarter of 2023.

“Saudi Arabia’s robust SME ecosystem passes new milestones every quarter,” Mohammed Al-Belwe, Monsha’at vice governor for communications, told Arab News.

“More than 88,000 new SMEs were launched in Q1 alone, bringing consumers a new array of goods and services and spurring growth across key sectors such as tourism, e-commerce, retail, food and beverage, and fintech,” Al-Belwe said.

“Behind these numbers is an exciting new generation of entrepreneurs who are striking out on their own, and as the Kingdom’s non-oil economy surges, the growth of SMEs will continue to kindle unprecedented private sector growth,” he added.

Riyadh was home to 41.4 percent, followed by Makkah at 18.1 percent, the Eastern Province at 11.1 percent and the other cities accounted for 28.6 percent of the total SMEs in the Kingdom.

SME financing reached its highest level in the first quarter of 2023, touching SR1.35 billion ($359 million).

The e-commerce and retail sectors emerged as the most active sectors in terms of financing during the first quarter of 2023, the report revealed.

It also highlighted the initiatives of the Small and Medium Enterprises Bank, which provided six financing products, including credit cards for enterprises and e-commerce financing.

The products also include financing working capital, microfinance, financing with a revolving credit line, and term financing.

Also noteworthy were the achievements of the Biban 2023 Forum, an event held in Riyadh in March and attended by an estimated 145,000 visitors from all over the world.

The event generated over $13.8 billion in agreements and announcements for SMEs in the Kingdom.

Under the Vision 2030 goals, the SME sector aims to contribute 35 percent of the gross domestic product by 2030.

Moreover, SMEs are set to play a significant role in achieving the Kingdom’s objectives of lowering the unemployment rate from 11.6 percent to 7 percent and increasing women’s participation in the workforce from 22 percent to 30 percent.


Amazon doubles storage capacity in Saudi Arabia with new facility in Riyadh

Amazon doubles storage capacity in Saudi Arabia with new facility in Riyadh
Updated 31 May 2023

Amazon doubles storage capacity in Saudi Arabia with new facility in Riyadh

Amazon doubles storage capacity in Saudi Arabia with new facility in Riyadh
  • E-commerce giant eyes 40,000 online sellers in Saudi Arabia by 2025

RIYADH: Amazon has launched a new fulfillment center in Riyadh doubling its total storage capacity in Saudi Arabia and increasing selling opportunities for small and medium-sized businesses.

The facility, which spans 390,000 sq. feet across five floors, with 2.7 million cubic feet capacity can store more than 9 million products, according to a statement .

The opening of the fulfillment center in the Saudi capital will provide SMBs a platform to showcase their products and expand their reach, a top official of the e-commerce giant said.

In an interview with Arab News, Prashant Saran, director of operations for Amazon in the Middle East and North Africa region, said that the new facility will provide sellers with more storage options and help them expand their online businesses to new markets.

“Whenever a new fulfillment center opens, it has a transformative impact on the economy of the host city by contributing to expanding product selection and availability, growth of e-commerce sales, talent development, and the acceleration of entrepreneurship,” said Saran.

He added: “The majority of products sold on Amazon.sa come from small and medium-sized businesses. In fact, many SMBs venture into e-commerce for the first time using our simple and convenient services.”

Saran noted that Amazon has been working closely with Saudi Arabia’s General Authority for Small and Medium-Sized Enterprises, also known as Monsha’at, to host 40,000 sellers on Amazon.sa by 2025.

Amazon’s fulfillment centers are hubs that enable the e-commerce firm to store millions of units of inventory, and serve as distribution centers where associates store, pick, pack, and ship orders.

The new center was opened in Riyadh on Tuesday in the presence of Suliman Al-Mazroua, CEO of the National Industrial Development and Logistics Program, and officials of the Ministry of Transport and Logistics Services, the Transport General Authority; and Monsha’at.

“Amazon’s expansion supports Saudi Arabia’s logistics sector — one of NIDLP’s four key sectors — bringing the latest innovations and technologies in e-commerce operations to the country. The new fulfillment center in Riyadh will further unlock the value of the Kingdom’s resources by empowering local startups and entrepreneurs with improved global connectivity and access to new markets,” said Al-Mazroua, according to the statement.

“Led by a diverse cohort of talented Saudi nationals in managerial positions, we expect this fulfillment center to support the Kingdom’s digital economy goals,” said Abdo Chlala, country manager of Amazon in Saudi Arabia.

According to the press release, the facility is powered 100 percent by electricity, including its heating and hot water systems, avoiding the use of fossil fuel combustibles and with energy efficiency as a top priority, in line with the company’s goal to turn net-zero by 2040.

Saran added that Amazon has been always cooperating with the Kingdom to support its localization efforts, and with Amazon Academy announced earlier this year, the e-commerce giant is providing training to 30,000 Saudi citizens in cloud technology, retail, and logistics.

“We have been making steady progress and today, Saudi women at the new fulfillment center occupy a variety of leadership positions within operations, human resources, learning and development, IT, among other departments,” he said.


Saudi banking sector growth driven by mortgages: report

Saudi banking sector growth driven by mortgages: report
Updated 31 May 2023

Saudi banking sector growth driven by mortgages: report

Saudi banking sector growth driven by mortgages: report

RIYADH: Saudi Arabia’s banking sector has experienced rapid growth over the past few years, primarily driven by mortgages and thanks to continued government support, according to a new report from S&P Global Ratings.

The US-based agency pointed out that the Saudi government “has created the infrastructure for banks to divest their mortgage portfolios and improve the structure of their balance sheets” to boost home ownership to 70 percent, a key Vision 2030 objective.

Private sector deposit growth averaged about 5 percent over the past five years, compared with 14 percent growth in deposits from the government and its related entities. 

The rating agency noted that the government still held significant deposits with the Saudi Central Bank, also known as SAMA, amounting to SR637.5 billion ($170 billion) at the end of 2022.

“This means that it can theoretically ease liquidity constraints by placing more deposits with the banking system. In 2022, SAMA reacted to liquidity stress by intervening and injecting SR50 billion, and we expect it to continue providing banking system liquidity when required,” it added.

Dr. Mohamed Damak, senior director and head of Islamic Finance at S&P Global Ratings, said: “We expect the Saudi banking system will continue to play a key role in financing Vision 2030 projects, with high single-digit percentage loan growth in the next couple of years.”

He added: “Banks can achieve this by mobilizing additional resources in the form of deposits or local and international issuances.”