Saudi Fund for Development signs $77m loan agreement to set up solar energy plant in Belize

Saudi Fund for Development signs $77m loan agreement to set up solar energy plant in Belize
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Updated 06 August 2023
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Saudi Fund for Development signs $77m loan agreement to set up solar energy plant in Belize

Saudi Fund for Development signs $77m loan agreement to set up solar energy plant in Belize
  • The project is expected to have a significant impact on stimulating social growth and creating direct and indirect job opportunities

RIYADH: CEO of the Saudi Fund for Development Sultan Al-Marshad has signed a development loan agreement with the Prime Minister of Belize John Briceno.

The agreement, worth $77 million, aims to finance the construction of a solar power plant in the Central American nation, the Saudi government authority said.

The signing ceremony was attended by Belizean Minister of Finance, Economic Development and Investment Christopher Coy, along with several officials from both sides.

The agreement reflects the fund’s commitment to supporting sustainable development in developing countries and small island states globally. Since its establishment in 1975, the SFD has successfully implemented more than 700 projects and development programs in 90 countries.

It is the second deal signed between the Kingdom, via SFD, and Belize since the start of its development activities in 2023.

The project’s primary objective is to build a 60-megawatt solar power plant, complete with the supply and equipment of solar panels, to reduce emissions in the energy sector by an estimated 60,000 tons of carbon dioxide annually through system efficiency and consumption.

The project is expected to have a significant impact on stimulating social growth and creating direct and indirect job opportunities.

It will also enhance the quality of electricity and promote environmental sustainability by addressing climate change through the reduction of greenhouse gas emissions, as well as advancing Belize’s efforts toward mitigating climate change and transitioning to clean energy.

Briceno said: “The solar power plant project comes at the right time, as Belize deems it necessary to increase its production of solar energy due to economic inflation, and most importantly, the project is in line with our country’s policy to focus on supporting renewable energy,” the Saudi Press Agency reported.

He added that the project would “bring many benefits to Belize, including cost savings, energy independence, environmental sustainability, job creation, and improved access to electricity for rural communities.”

Al-Marshad said: “The agreement represents an important step toward strengthening the existing development cooperation between the fund and Belize to contribute to the development of the clean energy sector in Belize, and to meet the basic needs of the population in enhancing access to electricity, and limiting the effects of global climate change, as well as promoting Belize’s economic and social growth.”


‘Place the burden’ on wealthy segments of society, IMF tells Pakistan

‘Place the burden’ on wealthy segments of society, IMF tells Pakistan
Updated 14 sec ago
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‘Place the burden’ on wealthy segments of society, IMF tells Pakistan

‘Place the burden’ on wealthy segments of society, IMF tells Pakistan
  • Pakistan and IMF struck $3 billion bailout deal earlier this year
  • Reforms linked to bailout have already fueled annual inflation

KARACHI: Pakistan needs to “place the burden” on wealthy segments of society and ensure that the rich pay taxes and the poor are protected, an IMF spokeswoman said in a press briefing on Thursday.

The International Monetary Fund and Pakistan struck a staff-level agreement for the provision on $3 billion in bailout funds under a stand-by arrangement (SBA) earlier this year, giving the South Asian economy a much-awaited respite as it teetered on the brink of default.

Reforms linked to the bailout, including an easing of import restrictions and a demand that subsidies be removed, have already fueled annual inflation, which rose to a record 38.0 percent in May. Interest rates have also risen, and the rupee hit all-time lows. Last month the currency fell 6.2 percent though it has sharply recovered in September amid a crackdown on illegal foreign exchange trade in grey and black markets by security agencies.

The August data from Pakistan’s statistics bureau showed a slight easing from July’s 28.3 percent inflation rate, but food inflation remained elevated at 38.5 percent.

“Place the burden on the wealthy segments of society. It’s important … that the rich pay their taxes, tax to GDP ratio in Pakistan is very, very low and that the poor are protected in society. The poor and the vulnerable members of society are protected,” IMF spokeswoman Julie Kozack told reporters in Washington, when asked about IMF reforms linked to the bailout.

She said the objectives of the program were to “provide a policy anchor” to Pakistan to address domestic and external imbalances and a framework for financial support from other donors, multilateral and bilateral partners, including fresh financing and rollovers of debt coming due.

“Policy efforts center on the implementation of the fiscal year 2024 budget, appropriate monetary policy aimed at bringing inflation down, and continued reforms to improve the viability of the energy sector,” Kozack said.

“All of these reforms are ultimately aimed at paving the way for higher, more inclusive and more resilient growth. To support social development and climate resilience, the program envisages plans to strengthen public financial management, tax administration efforts, and to better prioritize public investment. And all of this is being done with support from partners including not only the IMF but also the World Bank and the Asian Development Bank.”


FX clampdown boosts Pakistani rupee 6.1 percent to become September’s top currency

FX clampdown boosts Pakistani rupee 6.1 percent to become September’s top currency
Updated 6 min 50 sec ago
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FX clampdown boosts Pakistani rupee 6.1 percent to become September’s top currency

FX clampdown boosts Pakistani rupee 6.1 percent to become September’s top currency
  • September’s gains have almost made up for all of the rupee’s losses in August
  • Gains technically make rupee the best-performing currency in the world this month

KARACHI: Pakistan’s rupee has gained 6.1 percent against the dollar so far in September, following an official clampdown on illegal foreign exchange trade in grey and black markets by security agencies.

September’s gains have almost made up for all of the rupee’s losses in August and technically make it the best-performing currency in the world this month. The rupee hit a record low of 307.1 against the dollar on Sept. 5 but has made a sharp recovery since the country’s financial regulator and security agencies began taking action the next day to curb black market operations.

The Pakistani rupee closed 0.3 percent up in the interbank market at 287.8 per dollar on Thursday.

The crackdown on black market operators against the informal market resulted in tens of millions of dollars pouring back into Pakistan’s interbank and open markets, dealers said.

“The government’s stern administrative action against the unlawful foreign exchange dealers and hoarders in commodity markets is stabilizing the exchange rate, providing a respite to the imported inflation and easing out commodity prices,” the Finance Ministry said in its monthly report.

“The rupee has indeed performed well but this data does not reflect the sharp depreciation preceding this performance. Pakistan’s currency has been one of the worst-performing in recent years,” said Fahad Rauf, Head of Research at Ismail Iqbal Securities.

A market-determined exchange rate is a key condition for Pakistan receiving a $3 billion bailout loan from the International Monetary Fund (IMF) that was agreed in July to help avert a sovereign default.

Rauf added that the recent performance of the rupee is more of a recovery than an actual out-performance. He said the reserves situation is still far from comfortable.

On Thursday, Pakistan’s reserves clocked in at $7.637 billion, enough for less than two months’ worth of imports.

The report added that inflation is anticipated to remain high in the coming month, hovering around 29-31 percent due to an upward adjustment in energy tariffs and a major increase in fuel prices.


Lucid marks green milestone as it opens first global facility in Jeddah

Lucid marks green milestone as it opens first global facility in Jeddah
Updated 28 September 2023
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Lucid marks green milestone as it opens first global facility in Jeddah

Lucid marks green milestone as it opens first global facility in Jeddah

JEDDAH: Lucid Group celebrated the official opening of its first international car manufacturing facility in Saudi Arabia on Wednesday. Situated in King Abdullah Economic City, the new facility is not only poised to serve the local market but also has its sights set on future exports. 

In an interview with Arab News, Faisal Sultan, vice president and managing director for Middle East at Lucid Group, noted that the facility’s opening marks the start of their production operations and positions them to fulfill their recently signed agreement with the Saudi government.

The agreement involves purchasing up to 100,000 vehicles over a decade, with an initial commitment of 50,000 vehicles and an option for an additional 50,000 over the same period. 

Speaking about why Lucid ventured into electric car manufacturing in a country with a strong oil-based economy, Sultan said that Saudi Arabia was chosen for its strategic location and the ongoing transformative changes taking place within the country. 

“With Vision 2030, Saudi Arabia is transforming from only oil dependency and going into industries, tourism, healthcare, IT, and AI. So, those things all resonate with our policy. We are also in the business of transforming the mode of transportation, the luxury aspects, and trying to get customers to contribute to our sustainability,” he said.   

Sultan added that sustainability is the core policy of Vision 2030. “That was the main reason, but the other reason is the strategic location of KAEC, being on the Red Sea, giving us the opportunity to manufacture cars here, not just for local markets, but in the future to export them out through the Red Sea,” he explained.   

Held at KAEC, the inauguration event had some high-profile participants including Minister of Investment Khalid Al-Falih, Minister of Industry and Mineral Resources Bandar Alkhorayef, and Governor of the Kingdom’s Public Investment Fund Yasir Al-Rumayyan, along with the US Ambassador to the Kingdom, Michael Alan Ratney, and Lucid Group leadership. 

Aligning with green initiative 

Al-Falih highlighted that Lucid Motors’ establishment aligns with Saudi Arabia’s Vision 2030, the Saudi Green Initiative, and the country’s commitment to sustainability and net-zero emissions.  

He noted the global shift towards electric vehicles, emphasizing the importance of preserving the environment. 

“Off all cars sold globally last year, EVs saw a 65 percent increase year on year, compared to a 7 percent decline for internal combustion engine cars. This rapid growth in EV sales is a testament to humanity’s dedication to preserving our planet and ensuring a safer, healthier future for generations to come,” Al-Falih said.   

Furthermore, he added, through the inauguration of this facility, Saudi Arabia sends a message to the world, affirming its commitment to fostering innovation, investing in groundbreaking technologies, and spearheading environmentally sustainable advancements. 

This commitment extends beyond KAEC to NEOM, home to the world’s largest green hydrogen project, and Red Sea Global, where the first off-grid, all-renewable energy system will power operations. 

“We are laying the foundation for a future that prioritizes environmental consciousness right here in our own land,” the minister further added.   

Meanwhile, Sultan recalled Saudi Arabia’s announcement of the SGI, aimed at ensuring that 30 percent of cars sold in the country are EVs, underlining the nation’s belief in the global necessity for such a shift. 

He observed that there is a significant global shift as consumers increasingly embrace electric vehicles.  

“I think for Saudi Arabia to take that bold step and to also start putting the infrastructure and the companies like Lucid being present within the country producing cars will definitely help achieve those goals for the country and also help us create the demand that is really needed to get the electric vehicles on the road,” he said.  

Sultan added that a greater presence of electric vehicles on the road would unquestionably lead to reduced emissions, cleaner air, and a healthier environment for future generations. 

Manufacturing hub 

Al-Falih affirmed that this step would position the Kingdom as a regional manufacturing hub for the broader green economy. He added that Lucid’s presence would serve as a nucleus, unlocking the value chain of the EV industry and giving rise to spin-off effects and additional investment opportunities.   

Lucid’s presence in Saudi Arabia is expected to generate over 4,000 direct jobs, potential exports exceeding $117 billion, and a gross domestic product impact of nearly $50 billion.  

The facility aims to promote homegrown Saudi talent and provide expert skill development training. The company also highlighted that, through an agreement with the Human Resources Development Fund, it anticipates employing hundreds of Saudi nationals in the initial years and ultimately expanding the workforce into the thousands. 

For his part, Alkhorayef said in his speech: “We are quite determined to a complete cluster that will help different downstream and upstream industries, downstream chemical, and metals. We are also resolved to allow Saudi Arabia to become a global player in EVs, batteries, and so on.”   

He added that they are working very closely with Lucid, Ceer, and PIF to ensure Saudi Arabia becomes a hub of innovation.   

The industry minister also underscored that the occasion signifies not only the establishment of the facility but also a demonstration of the genuinely favorable investment environment in Saudi Arabia. 

In his speech, Ratney stated: “This partnership will deliver the world’s most advanced electric vehicles to a global market. It will inspire increased adoption of electric vehicle technologies globally and contribute to the development of the Kingdom’s own human capital.” 

He also emphasized that the timing is perfect for such a partnership, noting, “In fact, Lucid estimates that the first manufacturing plant in Saudi Arabia could generate $3.4 billion in value over the next 15 years, aligning Saudi investment and talent with US engineering, R&D, and manufacturing.” 

Charging stations  

Saudi Arabia is also investing in building a robust charging infrastructure for electric vehicles, with Lucid providing technical knowledge and support for smart charging infrastructure. 

Sultan said that Lucid itself provides its customers with a charger for their home that can actually charge the vehicle within a few hours.   

“But it is only when you are traveling from one city, like Riyadh to Jeddah, you will need to have the public infrastructure charging. So, we want to make sure that our customers have that through the discussions that we have with the government entities and the private sector,” he explained.   

The Lucid executive revealed that they have plans to export outside Saudi Arabia once their facility is fully operational.   

He stated that their strategy had been to export vehicles from Saudi Arabia upon reaching full capacity at manufacturing plant AMP-2, aiming to assemble 150,000 mid-sized platform vehicles.

Sultan mentioned technological partnerships, such as the one with Aston Martin, as part of Lucid’s long-term vision for electric mobility in Saudi Arabia.   

“We will continue to look for deals like that. I think Lucid technology is something that is very far advanced than some of our competitors. And we want to make sure that this technology is used for the greater humankind’s betterment,” he said.  

Sultan added that their goal is to increase the production of EVs and contribute wherever possible, be it through their own vehicles or technology partnerships, to get more electric cars on the road. 

He concluded by stating that they have already assembled about 51 cars in the new facility and are “ready" for further production. Sultan noted that their current annual production capacity at the assembly plant is 5,000 vehicles, but this capacity will significantly increase once the full complex in Jeddah is completed, reaching a total of 155,000 vehicles. 


Economic durability key to environmental sustainability, Saudi minister tells UN World Tourism Day gathering

Economic durability key to environmental sustainability, Saudi minister tells UN World Tourism Day gathering
Updated 28 September 2023
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Economic durability key to environmental sustainability, Saudi minister tells UN World Tourism Day gathering

Economic durability key to environmental sustainability, Saudi minister tells UN World Tourism Day gathering

RIYADH: Environmental sustainability can only be delivered if a country has a strong and stable economy, stated the Saudi minister of investment during a panel discussion at the UN World Tourism Day 2023 event in Riyadh. 

Khalid Al-Falih stressed that his role as minister entails ensuring financial agreements are closely connected to environmentally friendly practices. 

This means investments made “in the fuel of the future” in smart cities and mobility are sustainable, he said, adding that they should “give the tourists a sense of comfort that they are undertaking a journey, a vacation, a holiday and along the way they are benefiting the environment and not harming it.”

He stated that the tourism sector is undergoing a significant definition and development process in the Kingdom, emphasizing that this is relevant to the region and the broader Middle East. 

“With the leadership of (UN World Tourism Organization) Secretary General Zurab (Pololikashvili), Saudi Arabia is helping define the future of tourism in a sustainable way,” Al-Falih noted. 

He added: “It is important that tourism becomes counter and actually helps through the connectivity that we create between institutions, technologies and people.”

These connections are expected to be crucial in promoting eco-friendly practices and outcomes. 

During a roundtable, Pololikashvili discussed the dynamic changes in the Kingdom’s investments, infrastructures, and regulations, opening new opportunities, especially in hosting international events. 

“The country was totally closed to international travelers, and now here you see people coming from Argentina, Chile, Japan, and from all over the world. Almost 20 African ministers are here,” Pololikashvili said. 

He continued: “Nobody could imagine (this) five years ago. So, these are the steps. There’s a longer vision. It’s not only the year 2030. Many more things will happen here.” 

Pololikashvili emphasized that the government and the minister of tourism are striving to increase the number of international visitors, making it their top priority.

Citing data from the International Air Transport Association, Gloria Guevara Manzo, chief special adviser at the Saudi Ministry of Tourism, stated that the Kingdom had 4.5 billion passengers before the pandemic.

“This year, we are going to achieve 94 percent of that, and the reality is going to double,” Manzo continued. 

However, she added: “For that, you need to have the technology, and for that you need to have the cooperation of the government and of course the private sector.” 

Furthermore, in alignment with Vision 2030 objectives, the nation is undergoing a remarkable transformation towards openness, diversity, and sustainability, stated Basmah Al-Mayman,  Middle East regional director at the UNWTO, in an interview with Arab News on the sidelines of the event. 

Al-Mayman noted that this goal serves as a model of inspiration to the world. 

However, she told Arab News: “One main challenge that was facing the tourism sector in the Kingdom was the women working in the sector in our conservative society.” 

Al-Mayman added: “Nowadays, the situation has changed a lot as women have become more visible in the workforce and community, contributing more to the economy and development of the Kingdom. This is creating an outstanding shift in attitudes and behavior that will appeal on an international stage.” 

Moreover, the UN official underscored the importance of establishing a robust institutional framework for the tourism sector through a close collaboration between the public and private sectors. 

This involves creating regulations that define the roles and responsibilities of the private sector within the tourism industry and fostering an environment that encourages investment in travel. 

“In fact, the future of tourism is dependent on building strong partnerships with the private sector. It is now more important than ever to enable and empower the private sector,” she explained. 

Al-Mayman went on to say: “This new framework for collaboration with the private sector and relevant government entities will improve the quality of services in the tourism sector and promote Saudi Arabia as one of the top five global destinations.” 

The two-day event concluded Thursday as CEOs and leaders delivered keynote comments, while panel discussions focused on three UNWTO essential themes: people, planet, and prosperity. 

Saudi Arabia will hand over the chair to Georgia, who will host the event next year.


UAE, Egypt central banks enter into currency swap 

UAE, Egypt central banks enter into currency swap 
Updated 28 September 2023
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UAE, Egypt central banks enter into currency swap 

UAE, Egypt central banks enter into currency swap 

RIYADH: Financial trade between the UAE and Egypt is expected to surge after the monetary authorities of the two nations signed a currency swap agreement. 

The countries’ respective central banks formalized an arrangement between the UAE dirham and the Egyptian pound, according to a press statement. 

The deal, signed by Central Bank of the UAE Gov. Khaled Mohamed Balama and his Egyptian counterpart Gov. Hassan Abdullah, allows for the exchange of local currencies between the two institutions with a nominal size of up to 5 billion dirhams ($1.36 billion) and 42 billion Egyptian pounds. 

A currency swap agreement is a legally binding contract between two parties that outlines the terms and conditions under which they will exchange currencies and make periodic interest payments.  

Commenting on the agreement, Balama expressed that it reflects the strong relationship between the countries and provides an opportunity to promote cooperation while developing their respective economic and financial markets. 

“In line with the efforts of the UAE and Egypt’s leadership to collaborate more broadly across multiple areas, the CBUAE is keen to deepen its cooperation with the CBE (Central Bank of Egypt) to achieve common interests, positively impact the trade, investment, and financial sectors, and enhance financial stability,” Balama added. 

Furthermore, Abdullah noted that the move was in support of the “continued robust relations” between the UAE and Egypt.

He added he was confident the move will “bolster cooperation between both financial sectors in their respective currencies.” 

A day before signing the deal, Abdullah met with his Chinese counterpart Pan Gongsheng in Beijing, where the two heads discussed various topics intending to enhance economic and financial cooperation between the countries. 

A currency swap agreement was among the most prominent subjects examined, intending to improve the partnership between nations.

The discussions also included the Egyptian government’s plan to issue panda bonds denominated in Chinese yuan.

Additionally, the officials encouraged Chinese and Egyptian banks to establish a presence in each other’s county to enhance financial integration between economies.