Egypt unveils infrastructure projects to boost private sector investments

Egypt unveils infrastructure projects to boost private sector investments
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Egypt’s Minister of Investment and Foreign Trade Hassan Al-Khatib was speaking at a conference organized by the Center for International Private Enterprise. Facebook/Egyptian Cabinet
Egypt unveils infrastructure projects to boost private sector investments
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Egypt’s Minister of Investment and Foreign Trade Hassan Al-Khatib was speaking at a conference organized by the Center for International Private Enterprise. Facebook/Egyptian Cabinet
Egypt unveils infrastructure projects to boost private sector investments
3 / 3
Egypt’s Minister of Investment and Foreign Trade Hassan Al-Khatib was speaking at a conference organized by the Center for International Private Enterprise. Facebook/Egyptian Cabinet
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Updated 07 October 2024
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Egypt unveils infrastructure projects to boost private sector investments

Egypt unveils infrastructure projects to boost private sector investments
  • Egypt’s private sector engagement is crucial for development cooperation, enhancing livelihoods, and advancing the 2030 agenda
  • Government is offering nine infrastructure projects through its partnership unit

RIYADH: Egypt is rolling out a series of infrastructure projects to boost private sector engagement, according to the minister of investment and foreign trade. 

During a conference organized by the Center for International Private Enterprise, Minister Hassan Al-Khatib outlined the government’s commitment to empowering the private sector as a catalyst for economic growth. 

Egypt’s private sector engagement is crucial for development cooperation, enhancing livelihoods, and advancing the 2030 agenda.

The government is currently offering nine infrastructure projects through its partnership unit, with Al-Khatib saying: “The government is committed to attracting more investments and enhancing the role of the private sector as a key engine of economic growth and innovation.” 

Al-Khatib added that public-private partnerships will be crucial in driving sustainable growth, creating jobs, and improving the investment climate through regulatory reforms. The government has prioritized investments in sectors such as industry, health care, agriculture, tourism, and energy. 

The minister also said that renewable energy, particularly in hydrogen production and energy storage, is a key focus area in line with Egypt’s energy goals. 

“The government is encouraging investments in solar energy technology, semiconductor production, data centers, and outsourcing services,” the Egyptian Cabinet said in an official statement. 

Diversifying export markets is another strategic priority for Egypt, and Al-Khatib said the government aims to expand export markets across Africa, Europe, Asia, and North America, targeting $145 billion in annual exports. 

“Efforts are underway to strengthen global trade relations and bolster the African Continental Free Trade Area agreement, alongside partnerships with the European Union and other global partners,” the minister said. 

The government is also working to reduce trade barriers, simplify customs procedures, and improve logistics infrastructure to connect Egypt with international markets. 

On the green hydrogen front, Egypt is positioning itself as a global leader in the production and export of green hydrogen. 

Al-Khatib discussed Egypt’s national low-carbon hydrogen strategy, which is a core part of its renewable energy transition to leverage the country’s rich solar and wind resources, making Egypt a hub for hydrogen exports to European and Asian markets. 

On the legislative front is Law No. 2 of 2024, which came into effect in January and established a comprehensive legal framework for green hydrogen projects, offering financial incentives and streamlined processes for investors. 

“The law grants the ‘golden license,’ a single license covering all stages of project execution and operation,” the minister said. 

Al-Khatib also touched on recent reforms to Egypt’s investment law, which introduced new incentives to attract local and foreign investments. 

The reforms include the launch of digital platforms by the General Authority for Investment to streamline company registration, licensing, and name reservation processes, as well as reducing paperwork requirements. 

Efforts to simplify land allocation and fast-track licensing for industrial projects were also highlighted, including expanding free zones for industries like petroleum refining, fertilizer manufacturing, and gas liquefaction. 

“The government is working to attract more industrial projects under this free zone model and has simplified the establishment criteria for these zones,” the Cabinet statement said. 

In support of entrepreneurship and startups, Al-Khatib referenced a decision by the prime minister to establish a permanent unit within the Cabinet. This unit, led by the CEO of GAFI, is tasked with developing policies and regulations to foster the growth of startups in Egypt. 

“It will also serve as a liaison between the government and entrepreneurs to address challenges and gather input for policy-making,” the minister said. 


Saudi Arabia’s non-oil sector posts 4.8% growth in Q3: GASTAT 

Saudi Arabia’s non-oil sector posts 4.8% growth in Q3: GASTAT 
Updated 08 December 2024
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Saudi Arabia’s non-oil sector posts 4.8% growth in Q3: GASTAT 

Saudi Arabia’s non-oil sector posts 4.8% growth in Q3: GASTAT 
  • Saudi Arabia’s real gross domestic product grew by 2.8 percent year on year in the third quarter
  • At current prices, the Kingdom’s GDP reached SR1.00 trillion ($270 billion) in Q3

RIYADH: Saudi Arabia’s non-oil activities expanded by 4.8 percent year on year in the third quarter of 2024, fueled by growth in the wholesale and retail trade, and restaurant and hotel sectors, official data showed. 

According to the General Authority for Statistics, wholesale and retail trade, along with restaurant and hotel activities, grew by 5.8 percent in the third quarter compared to the same period in 2023. 

Additionally, activities in the financial, insurance, and business services sectors recorded a 5.7 percent increase year on year during the same period. 

Bolstering the non-oil sector is essential for Saudi Arabia as it pursues economic diversification in line with the objectives of Vision 2030. 

Last month, speaking at the World Investment Conference, Saudi Arabia’s Minister of Economy and Planning Faisal Al-Ibrahim noted that non-oil activities now contribute 52 percent to the Kingdom’s gross domestic product. 

The latest GASTAT report also highlighted that construction activities rose by 4.6 percent in the third quarter, while the transport, storage, and communication sector expanded by 4.5 percent during the same period. 

In quarter-on-quarter terms, non-oil activities grew by 0.7 percent in the third quarter. 

The report added that Saudi Arabia’s real gross domestic product grew by 2.8 percent year on year in the third quarter. Quarter-on-quarter, the GDP rose by 0.7 percent. 

At current prices, the Kingdom’s GDP reached SR1.00 trillion ($270 billion) during the period, according to GASTAT. 

“Crude oil and natural gas activities achieved the highest contribution to the GDP at 22.8 percent, followed by government activities at 16.1 percent, and wholesale and retail trade, restaurants, and hotels activities with a contribution of 10.1 percent,” said GASTAT.  

Government activities saw a 3.1 percent year-on-year growth in the third quarter, though they contracted by 0.3 percent compared to the previous quarter. 

Saudi Arabia’s oil activities grew modestly, rising 0.5 percent year-on-year in the third quarter and 1.2 percent compared to the previous quarter. 

Meanwhile, government final consumption expenditure increased by 6.2 percent year on year but declined by 1.8 percent quarter-on-quarter. 

Gross fixed capital formation — a measure of investment in the economy — rose by 3.2 percent year on year in the third quarter and 0.9 percent compared to the previous quarter. 

Saudi Arabia’s economic diversification initiatives under Vision 2030 are increasingly reflected in the robust performance of non-oil sectors, positioning the Kingdom for sustainable long-term growth. 


Saudi Arabia’s real estate loans hit $226bn, fueled by retail and corporate demand 

Saudi Arabia’s real estate loans hit $226bn, fueled by retail and corporate demand 
Updated 06 December 2024
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Saudi Arabia’s real estate loans hit $226bn, fueled by retail and corporate demand 

Saudi Arabia’s real estate loans hit $226bn, fueled by retail and corporate demand 

RIYADH: Saudi banks’ real estate loans surged to a record SR846.48 billion ($225.73 billion) in the third quarter of 2024, marking a 13.29 percent annual increase, official data showed. 

Data from the Saudi Central Bank, also known as SAMA, indicated that this growth was driven by both retail and corporate lending, with corporate loans experiencing a 22 percent increase to reach SR189.6 billion.  

Lending to individuals made up the lion’s share, accounting for 78 percent of the total at SR656.88 billion, reflecting an annual growth rate of 11.02 percent. 

Real estate loans now comprise 29.67 percent of Saudi banks’ total loan portfolio, which stood at SR2.85 trillion by the end of the third quarter.  

The sector’s unprecedented expansion is underpinned by government-backed initiatives under Vision 2030, which aim to diversify the economy and address the Kingdom’s growing housing demand.  

A pivotal regulatory milestone came in 2018, when the Saudi Central Bank increased the maximum loan-to-value ratio for first-time homebuyers from 85 percent to 90 percent. 

This strategic move was designed to stimulate mortgage lending, making homeownership more accessible to Saudi citizens while aligning with the Kingdom’s broader economic reform plans.  

By enabling more citizens to secure financing for their first homes, the initiative directly supported the national housing strategy, which aims to boost homeownership rates and expand housing options across the country. 

SAMA emphasized maintaining financial stability, ensuring that this policy shift would not compromise the resilience of the banking sector or lead to unsustainable lending practices. 

Another factor supporting the real estate sector’s growth is recent monetary easing. After two years of aggressive rate hikes to curb inflation, SAMA lowered interest rates by 50 basis points in September and another 25 basis points in November, mirroring the US Federal Reserve’s monetary policy. 

These cuts have made borrowing cheaper, spurring demand for real estate loans.  

However, this surge in demand has a dual effect. While it boosts credit uptake, it also exerts upward pressure on housing prices, contributing to inflation. 

Saudi Arabia’s annual inflation rate reached 1.9 percent in October, driven primarily by higher housing costs, according to the General Authority for Statistics. 

Despite this rise, the Kingdom’s inflation remains among the lowest in the Middle East, underscoring the efficacy of its economic stabilization strategies and its resilience against global inflationary pressures. 

New retail mortgages highest in 21 months  

Saudi banks issued SR8.14 billion in new residential mortgages in October, marking the highest monthly figure in 21 months and a 20.33 percent increase from October last year. 

The capital, Riyadh, has emerged as a focal point of this surge, fueled by robust population and employment growth that has intensified demand for housing, with new properties struggling to keep pace.  

Of the total residential loans in October, SR4.83 billion, or 59.3 percent, was directed toward purchasing houses, while 35 percent was allocated to apartments and 5.6 percent to land.  

Apartment financing saw the most significant annual growth, surging 47 percent year on year to SR2.86 billion, followed by land financing at 24.8 percent and house loans at 8.37 percent.  

For the third quarter of 2024, the value of new residential mortgages reached SR20.49 billion, reflecting an 11.34 percent increase compared to the same period last year. This growth was largely driven by demand for apartments, with lending in this segment soaring 58.76 percent year-on-year to SR7.25 billion.  

While lending for land rose 19.16 percent to SR1.19 billion during the quarter, loans for houses declined 6.13 percent to SR12.06 billion. 

The increasing prominence of apartment financing highlights a shift in Saudi Arabia’s housing market, reflecting evolving demographics and lifestyle preferences. Apartments appeal to expatriates and smaller families while also addressing affordability concerns.  

According to S&P Global, population growth, averaging 3.3 percent annually through 2027, and a surge in expatriate inflows are fueling demand, particularly in Riyadh. 

This factor, coupled with job opportunities, is outpacing the delivery of new housing units.

According to JLL’s KSA market dynamics report for the first half of 2024, 16,200 units were added in Riyadh and 11,300 in Jeddah during this period, with another 16,000 units expected in both cities by the end of the year. 

However, despite this growth, supply constraints continue to push prices higher. High construction costs and competition with Vision 2030 projects are limiting housing affordability.

Additionally, Saudi Arabia’s real estate market is navigating regulatory changes to attract foreign direct investment. While FDI inflows currently average 2 percent of GDP, they are expected to grow as reforms unfold, including new residency visa options tied to real estate investments, according to S&P Global. 

As mortgage infrastructure matures, spearheaded by entities like the Saudi Real Estate Refinance Co., the market is poised for increased liquidity and growth.

Secondary mortgage market

Saudi Arabia is embarking on a transformative journey to establish a secondary mortgage market, a move set to redefine the Kingdom’s housing and financial sectors.

With two major agreements in place, the country is strategically aligning global expertise with local execution to ensure liquidity in housing finance, boost homeownership, and foster economic diversification in line with Vision 2030.

In a landmark development, the Saudi Real Estate Refinance Co., a subsidiary of the Public Investment Fund, signed a memorandum of understanding with BlackRock, the world’s largest asset manager.

The agreement, finalized during a high-profile visit by Majid Al-Hogail, minister of municipal and rural affairs and housing, to the US, underscores the Kingdom’s commitment to leveraging global expertise to develop its mortgage finance ecosystem.

The partnership with BlackRock is expected to play a pivotal role in creating a functional secondary mortgage market by laying the groundwork for mortgage-backed securities.

BlackRock’s extensive knowledge of global financial markets will be instrumental in structuring these securities, designed to improve market liquidity by enabling banks to sell bundled mortgage loans to investors.

This influx of liquidity is anticipated to reduce borrowing costs for Saudi families, making homeownership more affordable.

Robert Kapito, BlackRock’s president, described the collaboration as a key step in aligning Saudi Arabia’s real estate finance market with international capital markets. He emphasized the potential for this initiative to not only support local housing goals but also attract global investment.

Meanwhile, SRC has also signed a separate agreement with Al-Ahli Bank and the Real Estate Development Fund to operationalize the secondary mortgage market at a local level.

This tripartite partnership focuses on creating and refinancing mortgage portfolios, ensuring the housing finance market has continuous access to funding.

The initiative is also set to fast-track the issuance of mortgage-backed securities in the domestic market, laying a solid foundation for sustainable growth in the sector.

As mortgage origination grows, so does the need for a secondary market to manage liquidity effectively.

SRC CEO Majeed Al-Abduljabbar described the partnership with Al-Ahli Bank as a critical step in addressing these challenges. By enabling banks to securitize mortgages and sell them as MBS, the initiative will enhance liquidity, reduce financing costs, and expand housing options for citizens.

These partnerships come at a pivotal time for the Kingdom, where the housing sector is central to Vision 2030’s objectives of raising homeownership rates to 70 percent and reducing economic reliance on oil revenues.

By integrating the real estate finance sector into global capital markets, Saudi Arabia is not only ensuring affordable housing but also positioning itself as a regional leader in innovative financial solutions.


Saudi Arabia launches 1st Japanese equity fund in partnership with SBI, Albilad Capital

Saudi Arabia launches 1st Japanese equity fund in partnership with SBI, Albilad Capital
Updated 05 December 2024
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Saudi Arabia launches 1st Japanese equity fund in partnership with SBI, Albilad Capital

Saudi Arabia launches 1st Japanese equity fund in partnership with SBI, Albilad Capital

DUBAI: Saudi Arabia has launched its first Japanese equity mutual fund, marking a significant step in a new partnership between Albilad Capital, the Kingdom’s largest exchange-traded fund manager, and Japan’s SBI Holdings, a leading financial group.

In a statement released on Thursday, SBI Holdings announced that the collaboration would provide Saudi investors with access to Japanese equities for the first time. At the same time, Japanese investors will be able to explore Saudi Arabia’s innovative financial offerings, including Shariah-compliant ETFs.

This partnership builds on a milestone achievement earlier this year, when SBI Asset Management— a subsidiary of SBI Global Asset Management— launched Japan’s first Saudi stock index-linked ETF, the SBI Saudi Arabia Equity Exchange Traded Fund, on the Tokyo Stock Exchange.

This new agreement further solidifies the investment ties between Saudi Arabia and Japan, contributing to the Kingdom’s Vision 2030, which focuses on attracting foreign investment, diversifying the economy, and expanding key sectors such as tourism, entertainment, and non-oil industries.

Recent developments supporting this vision include the creation of one of the world’s largest theme parks based on popular Japanese intellectual properties like Dragon Ball, as well as significant investments in major Japanese gaming companies.

Albilad Capital, the investment arm of Bank Albilad, is a key player in Saudi Arabia’s financial market and manages a significant portion of the country’s ETFs.

Meanwhile, SBI Group, which established its Middle East regional hub in Riyadh earlier this year, has reinforced its commitment to the region. The group has also teamed up with local firms to launch a regional investment fund aimed at fostering growth and innovation.

This collaboration highlights the deepening financial and economic ties between Saudi Arabia and Japan, positioning both nations for a future of shared investment opportunities.


PIF, Bpifrance sign $10bn MoU to boost Saudi-French financial ties

PIF,  Bpifrance sign $10bn MoU to boost Saudi-French financial ties
Updated 05 December 2024
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PIF, Bpifrance sign $10bn MoU to boost Saudi-French financial ties

PIF,  Bpifrance sign $10bn MoU to boost Saudi-French financial ties

RIYADH: Saudi Arabia’s Public Investment Fund and Bpifrance Assurance Export have signed a memorandum of understanding valued at $10 billion to enhance financial cooperation between the two nations.

The agreement, announced in a press release, will provide financing support to PIF and its portfolio companies over the next five years.

This collaboration is aimed at advancing sectors central to Saudi Arabia’s Vision 2030, which seeks to diversify the Kingdom’s economy and reduce reliance on oil. The deal also underscores PIF’s ongoing efforts to strengthen its international financial partnerships and expand its investment footprint globally.

“As a key driver of Vision 2030 and a leading global investor, PIF is mandated to transform and diversify the Saudi economy,” the press release noted.

Rasees Al-Saud, head of Financial Institutions and Investor Relations at PIF, called the MoU a crucial step in fostering international financial collaboration.

“This MoU marks another significant milestone in PIF’s strategy to deepen its relationships with leading global financial institutions and export credit agencies. It will open new doors for French and Saudi companies to collaborate, exchange expertise, and achieve mutually beneficial outcomes.”

Denis Le Fers, director general of Bpifrance Assurance Export, shared a similar sentiment, emphasizing the potential benefits for both countries.

“This agreement will strengthen Franco-Saudi commercial ties, increase trade flows, and create opportunities for French companies to form new partnerships. It will also contribute to the realization of Saudi Vision 2030.”

The deal highlights PIF’s growing role as a global investment catalyst and aligns with its objective to stimulate economic growth and job creation. Since its establishment in 2017, PIF has launched 99 companies, continuing to drive the Kingdom’s economic transformation through strategic partnerships.

This MoU comes on the heels of a state visit by French President Emmanuel Macron to Saudi Arabia in early December. Macron’s visit, which followed an invitation from Crown Prince Mohammed bin Salman, underscored the deepening bilateral ties and mutual commitment to enhancing cooperation across sectors, in line with both Saudi Vision 2030 and France 2030.

The number of French companies operating in Saudi Arabia has risen by more than 43% since 2020. Major French investors in the Kingdom include Air Liquide, Airbus, L'Oréal, and Total, spanning industries from energy to cosmetics.

During his visit, Macron also signed executive programs with French cultural institutions in Saudi Arabia to foster collaborations in areas such as heritage preservation, museums, libraries, and film. These initiatives will include artist training, archaeological surveys, educational workshops, and other cultural activities.

This growing partnership between France and Saudi Arabia signals a shared ambition to foster economic growth and cultural exchange in the years ahead.


Saudi Arabia signs key tax, customs pacts to boost global trade and investment

Saudi Arabia signs key tax, customs pacts to boost global trade and investment
Updated 04 December 2024
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Saudi Arabia signs key tax, customs pacts to boost global trade and investment

Saudi Arabia signs key tax, customs pacts to boost global trade and investment

JEDDAH: Saudi Arabia has signed a series of tax and customs agreements with multiple countries, further reinforcing the Kingdom’s commitment to global economic integration and enhancing its role in international trade.

The agreements were signed by Minister of Finance Mohammed Al-Jadaan, who also serves as chairman of the Zakat, Tax, and Customs Authority, during the 3rd Zakat, Tax, and Customs Conference held in Riyadh on Wednesday.

The two-day conference, inaugurated by Al-Jadaan, aims to strengthen Saudi Arabia’s international standing and promote deeper cooperation in the fields of tax, zakat, and customs.

The event focuses on digitization, artificial intelligence, and sustainability, addressing key challenges and supporting economic development in line with the goals of Saudi Vision 2030.

Al-Jadaan signed a double taxation avoidance agreement with Croatian Deputy Prime Minister Marko Primorac. This agreement aims to foster trade and investment between Saudi Arabia and Croatia while addressing tax-related challenges.

In addition, Al-Jadaan signed a customs cooperation agreement with Kosovo’s Minister of Finance, Labor, and Transfers, Hekuran Murati. This agreement focuses on enhancing trade facilitation through administrative collaboration and the use of advanced customs technologies.

He also signed a double taxation avoidance agreement with Kuwait’s Minister of Finance Noora Al-Fassam. This pact seeks to boost investment, address tax challenges, and strengthen bilateral economic relations between the two nations.

The conference brings together over 70 workshops, 90 local and international entities, and numerous panel discussions to share knowledge, address challenges, and develop strategies for supporting sustainable economic growth.

In his opening remarks, Al-Jadaan emphasized the conference’s role in fostering international collaboration and contributing to global economic recovery. He also highlighted Saudi Arabia’s progress in advancing Saudi Vision 2030, particularly through digital transformation.

Under ZATCA’s leadership, Saudi Arabia has become a global leader in e-government, achieving a 99.35 percent score on the UN E-Government Development Index.

This accomplishment reflects the Kingdom’s commitment to improving business processes and leveraging technology to streamline operations.

Al-Jadaan commended ZATCA for its continued excellence in achieving its objectives, contributing to Saudi Arabia's broader economic reforms, and advancing the Kingdom’s vision for a diversified and sustainable economy.

The 3rd Zakat, Tax, and Customs Conference underscores Saudi Arabia’s growing influence in global economic affairs and its proactive approach to fostering international partnerships.

By embracing innovation and working collaboratively with global partners, Saudi Arabia is positioning itself as a key player in the future of global trade and economic development.