ENGIE seeks further UAE expansion after $11.9bn investments in green projects

ENGIE seeks further UAE expansion after $11.9bn investments in green projects
ENGIE is already involved in several projects in the UAE, including funding the development of Al Ajban Solar Photovoltaic plant (Shutterstock)
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Updated 25 May 2023

ENGIE seeks further UAE expansion after $11.9bn investments in green projects

ENGIE seeks further UAE expansion after $11.9bn investments in green projects

RIYADH: French utility company ENGIE is looking to further deepen its roots in the UAE market, with $11.9 billion already invested in different projects in the Gulf country, according to a senior official from the firm.

In a statement to the Emirates News Agency, Frederic Claux, ENGIE’s managing director of thermal and supply for the Asia, Middle East and Africa region, said the company is seeking to expand its reach in the UAE by offering renewable energy solutions for water desalination, battery storage, and green hydrogen projects.

Claux further added that the company’s strategy specifically targets district cooling projects, photovoltaic energy, water desalination plants, and battery storage projects. 

ENGIE is already involved in several projects in the UAE, including funding the development of Al Ajban Solar Photovoltaic plant, which will produce 1.5 gigawatts of power.

The firm will be responsible for the development and operation of the Mirfa 2 Reverse Osmosis Independent Water Project worth $800 million. It has a daily water production capacity of 20 million gallons. 

While operations are planned to commence in 2026, the company plans to complete the project’s financial closure and start construction in the upcoming weeks. 

ENGIE also owns a 40 percent stake in the National Central Cooling Co., known as Tabreed, noted Claux. 

In the UAE, the French company currently operates six power and water plants. 

The company’s total investments in this industry will amount to about $7 billion once the Mirfa 2 project has been added.


ADNOC Drilling on fleet expansion spree as it eyes over $3bn revenue in 2023

ADNOC Drilling on fleet expansion spree as it eyes over $3bn revenue in 2023
Updated 27 May 2023

ADNOC Drilling on fleet expansion spree as it eyes over $3bn revenue in 2023

ADNOC Drilling on fleet expansion spree as it eyes over $3bn revenue in 2023
  • The company grew the fleet by 16 rigs in 2022, bringing the total to 115, CEO tells Arab News

RIYADH: On the back of a strong first-quarter performance, ADNOC Drilling plans to go big on its expansion strategy as it eyes 20 percent year-on-year growth in revenue this year. 

As a sole drilling partner to Abu Dhabi National Oil Co., ADNOC Drilling launched a bold fleet expansion program to enable the energy giant achieve its production targets. 

In an interview with Arab News, the CEO of the Middle East’s largest national drilling company, Abdulrahman Abdulla Al-Seiari, said they grew the fleet by 16 rigs in 2022, bringing the total to 115. 

“We will add a further 27 rigs by 2024, bringing our fleet to 142 rigs, and with these additional rigs will come additional revenue,” he told Arab News. 

Sharing the financial projections for the rest of the year, Al-Seiari said they expect to make a total revenue of between $3 and $3.2 billion in 2023. 

“We guided the market to expect EBITDA in the range of $1.35 to $1.5 billion with a margin of 45 percent to 47 percent. We will see record net income between $850 million and $1 billion,” he said. 

This comes after the drilling firm recorded a 19 percent year-on-year growth in revenue to $716 million in the first quarter.   

Its net income increased by 25 percent year-on-year to $219 million, which Al-Seiari said “clearly demonstrates the success of our strategy to expand both our drilling fleet and our service offering.” 

He attributed this rise in revenue to ADNOC’s accelerated production capacity growth which he said, “directly translates into an acceleration of drilling activity.” 

SPEEDREAD

• ADNOC Drilling said its OFS capabilities offer comprehensive drilling and completion services that span the entire drilling value chain.

• The business division has helped the firm create considerable savings in well time and cost while delivering better well economics, ensuring cost-effective services.

• The drilling firm looks to play a key role in helping ADNOC achieve its target of reducing carbon intensity by 25 percent by 2030.

“To enable this growth, we are growing our drilling fleet to deliver the wells required. When these rigs go onto our long-term contracts, they provide long-term cashflow and earnings visibility to shareholders while providing protection from market volatility,” he explained.   

ADNOC Drilling’s oilfield services business has also significantly grown in recent years and in the first quarter of 2022, the company achieved record OFS revenue of $123 million. 

Continuing that rapid expansion, the CEO said the segment grew by a massive 43 percent in the first quarter of 2023 to $126 million. The company attributed the growth to increased activity volume across the entire portfolio. 

ADNOC Drilling said its OFS capabilities offer comprehensive drilling and completion services that span the entire drilling value chain. 

The business division has helped the firm create considerable savings in well time and cost while delivering better well economics, ensuring cost-effective services. 

Talking about the growth prospect of the drilling industry, Al-Seiari said: “It is in very good shape in the UAE.” 

While ADNOC’s production capacity growth will deliver big gains for ADNOC Drilling in the short term, he said it plans to unlock Abu Dhabi’s “unconventional” oil and gas reserves and deliver gas self-sufficiency for the UAE that will “cement long-term earnings potential.” 

“We are the key enabler of gas self-sufficiency and will drill the thousands of wells needed to access the trillions of standard cubic feet of recoverable unconventional gas resources.”

Strong order book 

Since its initial public offering in October 2021, the company has secured more than $12 billion in contract backlog. In April 2023, it won another contract for integrated drilling services worth $412 million — the first of a number of anticipated significant awards in 2023.   

Talking about their future plans, Al-Seiari said they are “hugely ambitious” and are constantly evaluating opportunities for growth. 

“The pipeline of opportunities in Abu Dhabi is vast and remains our number one priority; however, the expansion of operations beyond our borders is a component of our mid-to-long-term strategy.” 

Decarbonization plan 

The drilling firm, which claims to have the world’s longest well with a total length of 50,000 feet, looks to play a key role in helping ADNOC achieve its target of reducing carbon intensity by 25 percent by 2030. 

“We are 100 percent committed to the delivery of maximum energy with minimum emissions,” said the CEO.    Explaining the company’s decarbonization plan, Al-Seiari said it rests on three broad streams of complementary activity which include continually driving greater efficiencies, minimizing the emissions of the drilling fleet, and addressing emissions associated with the global supply chain.   

“We are adding batteries to our fleet so providing hybrid power. These hybrid-powered drilling rigs can reduce emissions by up to 15 percent. Additionally, we are connecting our rigs to the grid where infrastructure allows,” he said. 

ADNOC Drilling is also supporting local manufacturing and procuring equipment and services from within the UAE — a move that helps the firm decarbonize its supply chain.


Developing aviation infrastructure key to achieving Vision 2030 goals: report

Developing aviation infrastructure key to achieving Vision 2030 goals: report
Updated 27 May 2023

Developing aviation infrastructure key to achieving Vision 2030 goals: report

Developing aviation infrastructure key to achieving Vision 2030 goals: report
  • Kingdom has the potential to become a gateway connecting Asia Pacific to Europe and America, says expert

RIYADH: The launch of the Kingdom’s strategic plans to become a global tourism and logistics hub has added a new impetus to its fast-evolving aviation industry, which can be further bolstered by investing in innovative technologies to further improve infrastructure and increase connectivity, suggested a report issued by the King Abdullah Petroleum Studies and Research Center.

Speaking to Arab News, Abdulrahman Alwosheel, a research associate at the Riyadh-based center and co-author of the report, said due to its strategic geopolitical location, the Kingdom has all the potential to become a gateway connecting Asia Pacific to Europe and America, which will also help it achieve its tourism goals as envisaged in Vision 2030.

“There are several areas where Saudi Arabia can focus to enhance its aviation industry by improving infrastructure, increasing connectivity, investing in innovation and technology, developing a skilled workforce, and promoting tourism,” said Alwosheel. 

The researcher said following the decision to allow tourist visas the Kingdom has made incredible progress in the tourism sector. 

The KAPSARC report said advancement in the Kingdom’s aviation sector is key to achieving the goals outlines in Vision 2030. Saudi Arabia’s National Tourism Strategy aims to attract 100 million visitors by 2030 and increase the tourism sector’s contribution to the gross domestic product to more than 10 percent. 

On the other hand, Saudi Arabia’s National Logistics Strategy, launched by Crown Prince Mohammed bin Salman in 2021, aims to position the Kingdom as a global logistics hub connecting three continents and improve transportation services. The strategy also seeks to improve the capabilities of the Kingdom’s air cargo sector by doubling its capacity to more than 4.5 million tons by 2030. 

Alwosheel said further improvement in domestic transport could also play a crucial role in elevating the tourism sector in Saudi Arabia, which is already progressing steadily compared to its regional counterparts. 

 “Unlike the neighboring countries, such as Qatar, Bahrain, and the UAE, in which domestic transport needs are more limited, in Saudi Arabia, domestic transport can play a vital role in supporting growth by promoting and developing domestic tourism, including the development of aviation infrastructure and services,” he added. 

The researcher pointed out that strategic alliances and joint ventures involving air carriers, manufacturers, airports, and government agencies could enable the aviation industry to leverage individual assets and skills to achieve the Kingdom’s goals.

Sustainability and challenges

The report emphasized the importance of sustainability in the overall development process of the aviation sector in the Kingdom. The think tank said unexpected circumstances caused by the COVID-19 pandemic such as a drop in demand, disruption of the airline industry, and the resultant financial losses served as a wake-up call to promote sustainable pathways.

Alwosheel noted that the cost factor is one of the major challenges the aviation industry should address while propagating the use of sustainable aviation fuel. 

“SAF is more expensive than traditional fossil-based fuels, which can create a financial burden for airlines. However, with increasing demand and production, technological maturity, feedstock availability, and diversity, the cost of SAF is expected to decrease,” said Alwosheel. 

According to the International Air Transport Association, the production of sustainable aviation fuel is estimated to meet just 2 percent of the sector’s needs by 2025. 

SAF is produced in tiny quantities from feedstocks such as cooking oils and animal waste and costs two to five times more than traditional jet fuels.

Alwosheel added that SAF will become more cost competitive if governments, along with customers and suppliers of SAF and airports work together and devise ways to promote technological advancements in the fuel’s production. He also pointed out that integrating SAF production plants with existing oil and gas industries could help reduce capital costs. 

“SAF production must be aligned with the region’s conditions since the production of biofuels could be limited. However, integrating it with the existing industries (petrochemical) can help reduce capital costs in developing facilities dedicated to producing SAF by considering co-processing pathways,” the researcher said. 

He said another challenge for SAF uptake is the strict certification standards to ensure that it is sustainable and does not harm the environment. 

With continued investment in research and development, increasing facilities for production and availability, and developing a robust certification system, the aviation industry can successfully embrace SAF.

Abdulrahman Alwosheel, Research associate at King Abdullah Petroleum Studies and Research Center

“The development of a certification system that is universally recognized can be challenging. Consequently, with continued investment in research and development, increasing facilities for production and availability, and developing a robust certification system, the aviation industry can successfully embrace SAF,” said Alwosheel. 

The ‘Passenger Load Factor’

Passenger Load Factor is “the percentage of available seating capacity filled with passengers, regardless of the seating capacity designation made by the airline or the cabin layout.” 

According to the KAPSARC report, PLF is instrumental in assessing the profitability of airlines since it indicates that an airline has sold most of its available seats, which allows it to divide its costs among the total passengers carried. 

Andres Guzman, a fellow researcher at KAPSARC, said that Saudi Arabia’s PLF has significantly improved, highlighting the Kingdom’s growth in the aviation sector.

“In fact, the lower PLF dilutes the benefits that aircraft manufacturers have made in the last years in improving fuel efficiency by considering new technology engines when the performance of the aviation sector is expressed in terms of the number of passengers instead of (the number of ) seats available,” said Guzman. 

According to the researcher, making the aviation sector sustainable requires concerted efforts from all stakeholders including airline carriers, aircraft manufacturers, consumers, airports, and governments. 

Guzman said despite financial challenges, aircraft fleet renewal has considerably improved the performance of the aviation sector, as newer aircraft are more fuel efficient, and they offer improved safety and reduced maintenance costs. 

“As sustainability has become a global concern, governments and financiers could foster a smoother transition of fleet renewal programs by offering financial incentives in compliance with legislation on emissions reduction,” he said.


Saudi Arabia’s healthcare sector bets big on digital transformation

Saudi Arabia’s healthcare sector bets big on digital transformation
Updated 27 May 2023

Saudi Arabia’s healthcare sector bets big on digital transformation

Saudi Arabia’s healthcare sector bets big on digital transformation
  • KSA to restructure the sector by enhancing its capabilities as a value-based ecosystem

CAIRO: Saudi Arabia is leading the digitalization wave in the wellness space by improving quality care, patient experience, and sustainable health development on par with the best in the world.

The Kingdom aims to restructure the health sector by enhancing its capabilities as an effective, integrated, value-based ecosystem focused on the patient’s health.

It is committed to investing heavily in the health technology sector to meet these ambitious goals. The 2023 budget allocated over SR180 billion ($50.3 billion) to healthcare and social development, reflecting the government’s commitment to this initiative. 

Much of this budget is directed toward digital health initiatives to enhance accessibility, efficiency, and transparency within the healthcare system.

Among these initiatives was creating a unified national electronic health record system, which acts as a comprehensive database to ensure patient data is accessible to medical professionals nationwide, enabling seamless cooperation and swift decision-making.

Investment in telemedicine platforms is also prioritized, ensuring healthcare access even in remote areas.

Under Vision 2030, the government has also been working toward privatizing the healthcare industry, focusing on 290 government hospitals and 2,300 primary health centers in the Kingdom.

Changing landscape

In an interview with Arab News, Jalil Abbadi, CEO of Altibbi, an Amman-based digital health platform, explained that the government’s decentralization initiatives would significantly enhance the sector and escalate healthcare technology.

“Hospitals and large corporations are working on their health tech solutions, and smaller companies are focusing on the consumer side,” Abbadi explained.

He added that as hospitals and clinical centers decentralize, they will focus on driving profits, increasing the incentive to adopt healthcare technology to automate and digitalize their work for more efficient operations. 

FASTFACTS

• The 2023 budget allocated over SR180 billion to healthcare and social development, reflecting the government’s commitment to this initiative.

• Much of this budget is directed toward digital health initiatives to enhance accessibility, efficiency, and transparency within the healthcare system.

• Among these initiatives was creating a unified national electronic health record system, which acts as a comprehensive database to ensure patient data is accessible to medical professionals nationwide.

Altibbi is one of the largest digital health platforms in the Middle East, raising more than $52.4 million in funding since its inception.

With the Kingdom reducing its dependency on hospital care and moving toward preventive health services, it aims to digitalize 70 percent of patient activities by 2030.

Abbadi explained that digital health consultations and activities are still low compared to Vision 2030’s targets, but “growth is happening very fast.”

“The government is pushing for digital health very fast, especially with policies that mandate the adoption of health tech and the legalization of many aspects around digital healthcare. So I think that 70 percent is very achievable soon,” Abbadi stated.

Startups are fueling the health tech sector with digital tools such as artificial intelligence, the Internet of Things, and big data analytics being integrated into healthcare services to predict, prevent and manage diseases more effectively.

Saudi Arabia’s health tech sector presents a roadmap for a future where digital health solutions are central to holistic and patient-centric care. This pioneering transformation is not only an investment in the health of its people but also a catalyst for economic diversification and sustainable development.

Digital health priorities

According to a report by the Saudi government, the proportion of people in Saudi Arabia aged 60 or more is predicted to be 25 percent of the total population of 40 million by the end of 2050, which calls for an urgent need to revolutionize healthcare delivery.

Chronic diseases such as cardiovascular conditions and obesity are prevalent in this demographic, which has led to a surge in digital solutions to address these challenges.

Sacha Haider, partner at the UAE-based venture capital firm Global Ventures, explained that the next generation of health tech in the Kingdom lies in preventative healthcare and longevity.

Speaking with Arab News, Haider said that 50 percent of the Saudi population is overweight, over 20 percent suffer from obesity and 7 million Saudis have Type 2 diabetes.

She further explained that consultations and check-ins would significantly activate health tech and digital health in the Kingdom.

“Chronic patients who have illnesses such as diabetes or thyroid will have their check-ins done over video conferencing. As the provider pushes that down and says this is more effective and cost-efficient, we’ll see higher adoption,” she added. 

In the wake of the COVID-19 pandemic, the industry has adopted digital technologies to enhance patient experiences and improve the quality of care. Saudi-based platforms like Nala and Cura are prime examples of successful digital health services companies, offering everything from instant consultations to tailored digital care programs.

Moreover, Saudi Arabia’s Ministry of Health has launched apps like Mawid, Tabaud, and Seha, which provide virtual consultations, thus eliminating the need for physical hospital visits.

Haider and Abbadi acknowledged the Kingdom’s efforts in introducing high-value digital health solutions.

The concept of express clinics within pharmacies has also gained momentum, providing instant primary care services. These clinics offer services ranging from consultation, measuring blood glucose and blood pressure, skincare analysis, weight management, and vaccination.

The digital health market in Saudi Arabia is projected to grow by 9.06 percent from 2023 to 2027, resulting in a market volume of $1.16 billion, according to global data firm Statista.


Egypt’s Intella relocates headquarters to Saudi Arabia after KSA’s AI boom 

Egypt’s Intella relocates headquarters to Saudi Arabia after KSA’s AI boom 
Updated 26 May 2023

Egypt’s Intella relocates headquarters to Saudi Arabia after KSA’s AI boom 

Egypt’s Intella relocates headquarters to Saudi Arabia after KSA’s AI boom 
  • Kingdom is becoming a hub for tech companies, says Intella CEO and founder Nour Taher
  • Saudi Arabia’s artificial intelligence sector is increasingly attracting regional and international players as demand continues to escalate, with Egypt-based Intella the latest to join the field.

CAIRO: Speaking exclusively with Arab News, Nour Taher, CEO and founder of the company, said Intella has begun relocating its headquarters to the Kingdom after gaining massive traction in the country. 

The move is evidence of how Saudi Arabia is making strides in the field of artificial intelligence and positioning itself at the forefront of the AI revolution in the Middle East. 

“Saudi is becoming a hub for tech companies, and we plan on playing a core role in the Saudi tech ecosystem,” Taher said. 

Nour Taher

“Saudi Arabia is currently our largest market with 70 percent of our business coming from there. We have just taken the decision to relocate our HQ there to better serve our existing clients and further expand our business. We are also inspired and aligned with Saudi Arabia’s Vision 2030,” she added. 

Intella is one of the region’s leading deep tech companies that aspires to create Arabic-language AI technology that caters to a vast range of dialects.  

“Our mission is to capture voice data and convert it into text, which we then analyze and mine for valuable information,” Taher explained. 

AI-Powered products 

The company offers a wide range of products in the areas of voice transcribing, data mining, and AI-powered insight capturing. 

“Our unique advantage lies in our ability to amass vast datasets, which we continue to expand with every conversation captured. By harnessing the power of technology, we are able to reveal insights and patterns that might have been impossible to detect through traditional means,” she explained. 

Intella offers Intella Contact Center Intelligence, a transcribing then analyzing tool for call centers; Intella Surveys, a real-time insight-capturing tool for businesses; and Intella Voice, a multi-dialect Arabic voice transcriber which averages a 95.7 percent accuracy rate covering 25 dialects. 

“We transcribe different Saudi dialects such as Najdi, Hejazi, Gulf and Faifi with an accuracy exceeding 95 percent, even when multiple dialects are intertwined within the same conversation,” Taher explained. 

Opportunities Ahead 

Intella has already cemented its position in the Kingdom with a majority of its client base coming from Saudi Arabia as well as landing multiple partnerships. 

Taher explained that the company’s AI products are suited for contact centers, government bodies, businesses, media agencies, and educational institutions. 

FASTFACTS

Intella won the Startup World Cup regional competition last February and will be heading to Silicon Valley to compete in the grand finale for a $1 million prize.

Saudi Arabia has positioned itself as a cornerstone for AI development in the region, with multi-billion dollar investments and initiatives set to reshape the sector.

The Kingdom established the Saudi Data and Artificial Intelligence Authority back in 2019 to drive national data and AI to transform the country as a leading data-driven economy.

Saudi Arabia has also set its sights on being ranked among the top 15 nations in AI by 2030.

“We have hundreds of active partnerships, in Saudi Arabia we are working very closely with governmental entities, consulting firms, tech companies, and contact centers. We have also secured global and regional partnerships with big tech companies like Huawei and Microsoft,” Taher stated. 

Taher believes that the Kingdom holds a massive opportunity for AI adoption. She stated that the company’s products were built for businesses and institutions to capture solutions and expand on them. 

“The most exciting part at Intella is that we’re not trying to build solutions alone. The first thing we’ve done when we built our model was avail it through API integration for other parties to integrate with and build on top of,” she said. 

“Saudi Arabia is becoming a tech hub and is attracting a lot of regional and global tech players, hence empowering everyone with accurate multi-dialect transcription could mean that every single conversation turns into meaningful insights,” she added. 

With Saudi Arabia opening to the world, Arabic speaking individuals are heading to the Kingdom to take hold of the opportunities presented by the trillion-dollar economy. “What’s interesting about the Saudi market for us is that Arabic is the main spoken language and even the expats in Saudi are predominantly Arab, so we believe the country is in line with our vision of bridging the gap between global AI advancements and the Arab-speaking world,” Taher emphasized. 

“We’ve also seen an increasing demand from Saudi media and podcast companies who are using our self-service platform to obtain transcripts for their voice content to boost their search engine optimization,” she added. 

Taher aims to position Intella as a market leader in the Saudi space as she stated that the company is actively hiring in Riyadh across a wide range of roles. 

“We are currently 29 and we’re expecting to double this year with the majority of the new hiring happening in our Saudi office,” she added. 

Operating a Software-as-a-Service business model, Intella has been profitable since its inception in 2021 but has been heavily investing in research and development, Taher claims. 

“We have already quadrupled last year’s revenue in the first 5 months of this year,” she said. 

In terms of funding, the company secured a $1 million investment last year through a funding round led by Hala Ventures, in addition to “wrapping up a larger round which will be announced soon,” Taher said. 

Furthermore, Intella won the Startup World Cup regional competition last February and will be heading to Silicon Valley to compete in the grand finale for a $1 million prize. 

Saudi Arabia has positioned itself as a cornerstone for AI development in the region, with multi-billion dollar investments and initiatives set to reshape the sector. 

The Kingdom established the Saudi Data and Artificial Intelligence Authority back in 2019 to drive national data and AI to transform the country as a leading data-driven economy.  

This includes the development of Saudi Arabia’s National Strategy for Data and AI, which was launched in 2020 with the aim of attracting $20 billion in investments for AI initiatives, training 20,000 data and AI specialists, and certifying 100,000 Saudi citizens in the sector by 2030. 

Moreover, Saudi Arabia has set its sights on being ranked among the top 15 nations in AI by 2030.  

Another major attraction is the Kingdom’s giga-project NEOM, intended to be a smart city powered by AI, machine learning, and other variations of advanced technology.


US money market funds see big inflows amid debt ceiling caution

US money market funds see big inflows amid debt ceiling caution
Updated 26 May 2023

US money market funds see big inflows amid debt ceiling caution

US money market funds see big inflows amid debt ceiling caution

BENGALURU: US money market funds saw big inflows in the week to May 24 as investors favored safer bets ahead of a deadline for politicians to agree an increase in the country’s debt ceiling, according to Reuters.

According to Refinitiv Lipper data, US money market funds received a net $39.9 billion of inflows, the biggest week of net buying in four weeks.

US President Joe Biden and top congressional Republican Kevin McCarthy are closing in on a deal to raise the government’s $31.4 trillion debt ceiling for two years, a US official told Reuters, but time is running short.

The US Treasury estimates it will run out of funds within a week, and legislating any deal will take that down to the wire.

Meanwhile, riskier equity funds saw outflows for a ninth straight week, worth $1.79 billion.

Investors sold $1.06 billion from US equity value funds and $703 million from growth funds, respectively.

Meanwhile, sectoral equity funds remained in demand as they drew a net $335 million worth of inflows. Tech and consumer discretionary sectors received a net $420 million and $289 million, respectively.

On the other hand, US bond funds attracted a fourth week of inflows, worth about $4.22 billion.

Government bond funds received $2.43 billion in a fifth straight week of net buying.

US corporate and high yield funds also drew $1.72 billion and $677 million of inflows, respectively, but inflation protected funds suffered a sixth weekly outflow of $565 million.