Saudi Central Bank continues to test its digital currency

Saudi Central Bank continues to test its digital currency
SAMA is currently studying the economic impact, market readiness, and potentially effective and swift applications for payment solutions using digital currency (File)
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Updated 24 January 2023

Saudi Central Bank continues to test its digital currency

Saudi Central Bank continues to test its digital currency

RIYADH: The Saudi Central Bank, also known as SAMA, is carrying out experiments with a central bank digital currency in cooperation with other financial institutions and fintech firms, the Saudi Press Agency reported.

The project is in line with measures taken by central banks around the world to issue widely accessible digital coins to ensure privacy and financial security. 

Central banks started mulling this transition following a rise in the popularity of cryptocurrencies but with a legal cover to curb criminal use of the otherwise unregulated digital currencies.

SAMA is currently studying the economic impact, market readiness, and potentially effective and swift applications for payment solutions using digital currency, the SPA report added.

The central bank is also seeking to explore policy issues as well as legal and regulatory aspects prior to moving to the next stages of the project.

Local banks and payment companies are an indispensable cornerstone of this project and its implementation, according to SAMA Gov. Fahd bin Abdullah Al-Mubarak.

It is crucial to involve banks and local fintech firms in the current phase of the project, he noted.

He said it is also important to ensure the participation of other market players and third-party advisory and technical service providers to better understand the functions of digital currency and test various design options.

The central bank will continue this phase of the project while consulting, at the same time, with relevant international agencies, local government agencies, and the public, the top official added.

SAMA and the Central Bank of the UAE are also working on a project called “Aber,” which seeks to evaluate the feasibility of issuing a digital currency for use between the two central banks.

The aim is to develop a cross-border payment system that will reduce transfer times and costs between banks in the two Gulf states.

The banks plan to develop a technology, such as distributed ledgers, which can be used to manage digital currencies between the two central banks and banks participating in the initiative in Saudi Arabia and the UAE.


Experts to discuss pathways for a clean, sustainable future

Experts to discuss pathways for a clean, sustainable future
Updated 8 sec ago

Experts to discuss pathways for a clean, sustainable future

Experts to discuss pathways for a clean, sustainable future
  • The IAEE conference in Riyadh to serve as a platform to deliberate on pressing challenges, strategies

CAIRO: Saudi Arabia will host the 44th International Association for Energy Economics International Conference from Feb. 4-9 to discuss the path for a sustainable future. 

To be held for the first time in the Middle East and North Africa region, the event is set to take place at the King Abdullah Petroleum Studies and Research Center in Riyadh in cooperation with the Saudi Association for Energy Economics. 

“It will be the first time the IAEE is organizing its annual conference in the MENA region, a region that has produced more than 40 percent of the world’s oil and gas over the past two decades,” Fahad Alajlan, KAPSARC president, said in a statement. 

The event will be addressing critical topics under the theme “Pathways to a clean, stable and sustainable energy future” by facilitating academic evidence-based solutions and providing a platform for productive dialogue and problem-solving capacities 

The conference is set to host over 500 delegates from over 40 nationalities to participate in 10 plenary sessions. 

In-depth topics include carbon capture, circular carbon economy, the role of hydrogen in energy transition, the impact of oil price volatility on supply and investment, and the challenges facing the power sector in the MENA region. 

The conference provides the opportunity for academia, industry, government and scientific experts to assess the evolving energy landscape to explore ideas and strategies to ensure the future of a low-carbon future. 

“Since its inception, KAPSARC has been very active in conducting critical research on energy economics and climate sustainability. The upcoming IAEE conference, hosted for the first time in the Middle East, is a wonderful opportunity to visit KAPSARC and Saudi Arabia’s capital, Riyadh,” Yukari Yamashita, IAEE’s managing director, said in a statement. 

The event will host high-level attendees featuring keynotes sessions, workshops and plenary discussions to shape policies around the climate agenda. 

On Feb. 4, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman will inaugurate the event with a keynote speech followed by a conversation with Daniel Yergin, vice chairman at S&P Global. 

Before the energy minister’s key note address, the event will host an invitation-only IAEE Council meeting followed by a Young Professionals and Scholars Day in Hilton Riyadh. 

On the second day of the event, Alajlan will give his opening remarks accompanied with Majid Al-Moneef, chairman of the board at SAEE and Jean-Michel Glachant, IAEE president. 

The first plenary session will be themed “Energy Volatility, Security, and Access.” It will outline modern energy access in rural and developing regions in line with solving the world’s problems in economic growth and prosperity. 

The second day will feature dual-track sessions titled “Energy Investments and Financing’ and ‘Energy and Trade.” 

Day three will include a plenary session titled “Pathways to Energy Transitions” to explore whether climate ambitions and energy security can be harmonized by raising the question: What realistic pathways could best meet global and regional goals and the aspirations of a just energy transition? 

It will be followed by dual sessions as track one will hold the session “Energy, Development, and Climate Change” to explore the link between economic development and environmental conservation by highlighting factors that can simultaneously ensure the pursuit of both. 

HIGHLIGHTS

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman will inaugurate the event with a keynote speech followed by a conversation with Daniel Yergin, vice chairman at S&P Global. 

The event will host an invitation-only IAEE Council meeting followed by a Young Professionals and Scholars Day in Hilton Riyadh. 

Day six will be a technical tour of the Shaybah Oil Production Facility in Rub Al-Khali, the largest extended desert in the world. 

The tour will include visits to Saudi Aramco’s Shaybah facility as well as the 637 sq. km Shaybah Wildlife Sanctuary, an Aramco-sponsored biodiversity protection area that is home to native plant and animal species. 

Track two will lead the examination of problems from technology to geopolitics to gain a more descriptive insight into the underappreciated aspect of the energy transition in a session themed “Energy, Water, Food, and Minerals Interconnections.” 

On Feb. 7, the session “Energy, Mobility, and Technology” will kick off the day to shed light on the technology and regulatory options needed to deliver these services while meeting the multi-dimensional challenges of resource use, emissions, cost and impact on the urban environment. 

The sessions will move on to explore the opportunities and challenges arising in the industry with two sessions “Energy Efficiency and Industrial Competitiveness” and “Challenges and Opportunities for the Power Sector.” 

Day five will begin with renowned economists in the panel titled “Economy and Energy Diversification in MENA.” 

The closing session will be hosted by Al-Moneef, Glachant, Fahad Al-Turki, VP of knowledge and analysis at KAPSARC, Gurkan Kumbaroglu, professor of industrial engineering at Bogazici University, Christophe Bonnery, president at the French Association for Energy Economics, followed by closing remarks from Alajlan. 

Day six will be a technical tour of the Shaybah Oil Production Facility in Rub Al-Khali, the largest extended desert in the world. 

The tour will include visits to Saudi Aramco’s Shaybah facility as well as the 637 sq. km Shaybah Wildlife Sanctuary, an Aramco-sponsored biodiversity protection area that is home to native plant and animal species. 

The event will also discuss COVID-19’s impact on energy and energy poverty and sustainable development goals in addition to shedding light on academic research and case studies. 

The 43rd IAEE Conference was held in mid-2022 in Tokyo, Japan, titled “Mapping the Energy Future — Voyage in Uncharted Territory” which discussed the impact of new geopolitical conditions and technological progress in energy markets. 

Key takeaways from last year’s event were the increase in investments in innovative solutions which was estimated to reach $209 billion by 2030, according to Fumihiko Ito, chief sustainability officer at Sumitomo Mitsui Banking Corp., and the role of global collaboration to ensure a smoother energy transition. 

Other important discussions were around the technologies that tackle carbon emissions as well as risk assessment and intervention planning.


Saudi Arabia spearheading the energy transition in Middle East

Saudi Arabia spearheading the energy transition in Middle East
Updated 4 min 19 sec ago

Saudi Arabia spearheading the energy transition in Middle East

Saudi Arabia spearheading the energy transition in Middle East

RIYADH: The need for energy security has never been more critical in the history of mankind. Amid heightened political tensions, energy diversification programs and sustainability initiatives are a key part of the global agenda today, and countries are working hard to achieve their net-zero targets within the stipulated deadline.

As the world continues its journey to achieve zero emission targets, Saudi Arabia, a country that has been dependent on oil for several decades, is spearheading the energy transition mission in the Middle East region.

Saudi Green Initiative and the wider Middle East Green Initiative are revolutionizing the entire green journey in the region, and they are adequately supported by the Public Investment Fund’s Regional Voluntary Carbon Market Co. which auctioned off 1.4 million tons of carbon credits during the 6th edition of the Future Investment Initiative conference held in Riyadh in October last year.

And now, Riyadh is all set to host the 44th International Association for Energy Economics International Conference on Feb. 4-9 as the entire world is looking forward to the developments the region will witness during the event.

FASTFACTS

Saudi Arabia’s ACWA Power and its partners are working steadily in NEOM to complete the construction of the world’s largest green hydrogen project.

The first phase of its green hydrogen facilities is expected to come online in 2025.

The $500-billion megacity will be powered entirely by clean energy and will cover 10,000 sq. miles, an area 33 times the size of New York.

Paul Sullivan, lecturer at Johns Hopkins University and a senior associate fellow at King Faisal Center for Research and Islamic Studies Energy and Environmental Security, told Arab News that Saudi Arabia is steadily progressing with greater energy efficiency and resilience, in line with the goals outlined in Vision 2030.

“Saudi Arabia is progressing via Vision 2030, the Saudi Green Initiative, leading the Middle East Green Initiative, inter alia. It is making progress with solar energy. It will do a lot more on the many colors of hydrogen. It will likely start to develop a nuclear energy program further,” said Sullivan.

Joe Rahi, partner, McKinsey & Co., told Arab News that Saudi Arabia is playing a key role in ensuring an orderly energy transition.

“Saudi Arabia accounts today for the largest share of global oil exports — and it has the potential to become a significant exporter of clean, reliable and affordable energy in the future,” said Rahi.

He further pointed out that the Kingdom has unique access to competitive natural resources both in the form of natural gas to produce blue hydrogen, as well as solar resources and land to develop green hydrogen.

Meanwhile, Saudi Arabia’s ACWA Power and its partners are working steadily in NEOM to complete the construction of the world’s largest green hydrogen project.

In 2022, NEOM’s CEO Nadhmi Al-Nasr had noted that the first phase of its green hydrogen facilities is expected to come online in 2025. The $500-billion megacity will be powered entirely by clean energy and will cover 10,000 sq. miles, an area 33 times the size of New York.

Sullivan further noted that Saudi Arabia could be the leader of energy transition in the region by developing joint investments, research programs, training and education throughout the Middle East and North Africa region.

“The region and the world really are small. Much more can be learned by working together and not against each other. Just giving money is not enough. The whole region needs to move forward in all aspects of the transition and how the transition affects the energy-water-food-security-economy nexus,” said Sullivan.

Rahi pointed out that Saudi Arabia should create national champions who can develop, produce and scale low-carbon energy to achieve energy transition goals.

According to Rahi, countries in the Middle East could promote investments to scale the supply of carbon capture, utilization and storage technologies along with low-carbon hydrogen and ammonia.

“The region has significant untapped potential here since the geological characteristics of its sedimentary basin could make it a global hub for carbon storage,” he said.

Rahi added: “Stakeholders could boost the development of renewables, including upgrading the supporting infrastructure. Incentives could help accelerate the move to electrification and energy efficiency in buildings, industry and the transportation sector.”

He further noted that the energy transition in the region is creating an opportunity to innovate, which includes creating a startup ecosystem for clean technologies.

Reiterating the views of top industry experts, Sullivan noted that energy transition in a sustainable manner will not happen quickly, and it demands time to materialize the green goals.

“All major transitions take time. The energy transition is no different. It has to be timed and developed for every place in a way that allows peace, prosperity, energy security and climate security,” said Sullivan.

He added: “If it is pressed on too quickly, severe energy, economic insecurity and instability could result. If it is allowed to be delayed too long, then the world and regional climates and environments could be significantly damaged. Extremism is the enemy of energy transitions, much like it is the enemy of society in general.”

Rahi opined that affordable conventional energy is still required to ensure socioeconomic growth, especially for developing countries, and added that low carbon and renewable energy such as hydrogen and solar will continue to play an increasingly important role in the growing energy system.

“To move to large-scale deployment of renewables, countries would also need to invest in grid stabilization and storage to ensure the reliability of supply and integrate renewables into existing systems,” he added.

As Saudi Arabia continues its sustainability journey, events like IAEE International Conference could catalyze the speed of the energy transition, which will ultimately make the world green and beautiful for humankind.


Closing bell: Saudi bourse slips nine points to 10,784 

Closing bell: Saudi bourse slips nine points to 10,784 
Updated 16 min 26 sec ago

Closing bell: Saudi bourse slips nine points to 10,784 

Closing bell: Saudi bourse slips nine points to 10,784 

RIYADH: Saudi Arabia’s Tadawul All Share Index fell 9.12 points — or 0.08 percent — on Wednesday to close at 10,783.73. 

MSCI Tadawul 30 Index and the parallel market Nomu closed flat at 1,489.74 and 19,147.98, respectively. 

TASI’s total trading turnover of the benchmark index on Wednesday was SR3.67 billion ($1.22 billion), with 97 stocks of the listed 224 advancing and 114 retreating. 

Salama Cooperative Insurance Co. was the topmost gainer of the day, rising 8.77 percent to SR12.40. 

The other top gainers were Abdulmohsen Alhokair Group for Tourism and Development, Arabian Pipes Co., Alinma Tokio Marine Co. and Saudi Chemical Co.. 

The worst performer was Saudi Industrial Investment Group, which fell 4.6 percent to SR23.66.  

SIIG reported a net profit after zakat and tax of SR277 million for 2022, down 76 percent from SR1.13 billion in 2021. 

The company said the decline was fueled by its share of profit in jointly managed projects decreasing in 2022 due to lower margins led by higher feedstock costs and weaker selling prices.  

It also turned to a net loss after zakat and tax of SR296 million in the fourth quarter of 2022, from a profit of SR121.65 million in the same period a year earlier.  

The other stocks that performed poorly included Taleem REIT Fund, United International Transportation Co., Advanced Petrochemical Co. and Wataniya Insurance Co. 

Among sectoral indices, 12 of the 21 listed on the stock exchange advanced, while the rest declined. 

On the announcements front, Alwasail Industrial Co. informed the stock exchange that it signed a contract with Saudi Basic Industries Corp. on Jan. 31 to finance raw materials for manufacturing activities and products, including polyethylene pipes and its derivatives, at its factories at an estimated value of SR300 million. 

The contract’s term is one year, starting from Jan. 1, 2023, the company said in a statement on Tadawul. 

The agreement includes financing raw materials equivalent to about 60,000 metric tons for manufacturing and products at the company’s factories, including polyethylene pipes and their derivatives. The materials are used in more than 90 percent of its products. Alwasail Industrial’s share price soared 15.37 percent to SR21.62. 

Meanwhile, Allianz Saudi Fransi Cooperative Insurance Co. informed Tadawul that it obtained on Jan. 31 the final approval of the Saudi Central Bank on the comprehensive motor product provided to the individual as well as the group categories, in line with the comprehensive motor insurance rules issued by the central bank on Nov. 8, 2022. The company’s share price picked up 0.68 percent to SR14.90. 

On the dividends front, Saudi Top for Trading Co.’s shareholders approved the board’s recommendation to pay a cash dividend of 120 percent, or SR12 per share, for 2022. These dividends are payable to public shareholders, excluding Abdullah AlAjmi, who waived his profit for 2022. Yet, Saudi Top’s share price plunged 9.46 percent to SR101.40.


SFD signs $320m agreement to finance infrastructure project in Oman

SFD signs $320m agreement to finance infrastructure project in Oman
Updated 28 min 10 sec ago

SFD signs $320m agreement to finance infrastructure project in Oman

SFD signs $320m agreement to finance infrastructure project in Oman

RIYADH: Saudi Fund for Development has signed a memorandum of understanding with Oman’s Ministry of Finance worth SR1.2 billion ($320 million) to finance the infrastructure development project of the Special Economic Zone in Ad Dhahirah, Oman.   

The MoU aims to open new horizons of cooperation between the two countries through the establishment of the economic zone which is set to promote economic growth, increase trade, and encourage partnerships, according to a press release.  

The deal was signed by SFD CEO Sultan Al-Murshid, and the Omani Ministry of Finance represented by Zahri Al-Abri, during the Saudi-Omani Investment Forum being held in Riyadh.  

Highlighting the importance of collaboration to both nations, Al-Marshad said: "This MoU reflects the long-established historical relations and close partnership between the Kingdom of Saudi Arabia and the Sultanate of Oman. This project will help achieve the two countries' ambitious visions, economic growth, and social prosperity.” he said. 

Al-Abri praised the Kingdom’s efforts in supporting the development projects and programs in the infrastructure sector through the SDF.  

The SDF has been working closely with Oman to finance and support various projects including infrastructure, higher education, vocational training, water, and energy. 


Saudi-based Diriyah signs telecom services deals with Salam and Tawal

Saudi-based Diriyah signs telecom services deals with Salam and Tawal
Updated 01 February 2023

Saudi-based Diriyah signs telecom services deals with Salam and Tawal

Saudi-based Diriyah signs telecom services deals with Salam and Tawal

RIYADH: Saudi Arabia’s Diriyah project is set to benefit from a wireless telecom networking deal between the Diriyah Gate Development Authority and Integrated Telecom Co. and Telecommunications Towers Co..

The 15-year contract, which includes designing, building, and operating procedures, is projected to cover open-access services to all Diriyah stakeholders including visitors, tenants, and residents, according to a statement.

The agreement is also expected to provide fiber-optic connectivity for 2,000 plots in addition to key services in the Wadi Hanifah and Wadi Safar areas.

“Diriyah prioritizes telecommunications and network access across all of its projects, adhering to the highest global standards,” according to CEO of Diriyah Gate Development Authority Jerry Inzerillo.

The Diriyah project practices several sustainability measures, the most prominent of which is the shared use of each tower among all three primary mobile operators in the Kingdom: STC, Mobily, and Zain.

The shared use of the towers between the operators helps to minimize the number of towers required for coverage and their respective impact on the urban landscape of the country.

“This project will see us develop a state-of-the-art IT and telecom infrastructure that will be shared between service providers, enabling them to host the latest technologies in Diriyah," said Ahmed Al Anqari, CEO of the Integrated Telecom Co., also known as Salam.

Under the terms of the new deal, as many as 80 telecommunication towers are expected to be constructed over the next three years.

"The telecom towers will blend seamlessly into their surroundings. In addition, the project will offer users indoor connectivity solutions, further establishing Diriyah as a modern and sustainable destination," said Mohammed Alhakbani, CEO of Telecommunications Towers Co., also referred to as Tawal.

The new towers are meant to cut costs for service providers and guarantee connectivity by providing consistent telecom services across the Diriyah Development.