Saudi Arabia’s Industrial Development Fund injects $3.19bn into the sector, minister confirms

Saudi Arabia’s Industrial Development Fund injects $3.19bn into the sector, minister confirms
The industrial sector has experienced significant momentum. Shutterstock
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Updated 27 November 2024
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Saudi Arabia’s Industrial Development Fund injects $3.19bn into the sector, minister confirms

Saudi Arabia’s Industrial Development Fund injects $3.19bn into the sector, minister confirms

RIYADH: The Industrial Development Fund provided SR12 billion ($3.19 billion) in financing to the Kingdom in 2024, boosting its global competitiveness, according to leading minister.

Speaking during a panel discussion at the Budget Forum 2024, Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef highlighted the vital role of financing in driving industrial development.

“The Industrial Development Fund alone financed projects worth SR12 billion for 2024, but the total value of these projects exceeds SR60 billion,” Alkhorayef said.

He continued: “We have key indicators for the industrial sector: First, there are the licenses, which have seen significant growth. By the end of this year, more than 1,100 opportunities have been issued, and 900 factories have entered production. This is a very important key indicator.”

The minister went on to say: “The second key indicator is financing. Financing is a crucial driver for the industrial sector. The third key indicator is infrastructure. It is unimaginable to have a thriving industrial sector without properly developed industrial lands, primarily provided by the government.”

These key indicators are of great importance because they ensure the continued flow of investments into the sector, he added.

Alkhorayef also pointed to the Kingdom’s focus on promoting exports and supporting new sectors.

“Exports grew from SR458 billion in 2023 to SR528 billion this year, a 15 percent increase. This growth is largely driven by non-traditional sectors, showcasing the diversification of our economy beyond petrochemicals,” he said.

The minister highlighted the broader integration of industries, particularly between the industrial and mining sectors.

He praised Saudi Arabia’s streamlined approach to mining licenses, reducing wait times from eight to 10 years in advanced economies to just six months in the Kingdom, with plans to further reduce this to 90 days.

Alkhorayef emphasized the long-term vision of transforming Saudi Arabia into a hub for mining services and technology companies.

“Our investment in geological surveys has increased the estimated value of the Kingdom’s mineral wealth from $1.3 trillion to $2.5 trillion. This achievement positions the Kingdom as a future leader in mining and industrial innovation,” he added.

The industrial and logistics sectors have experienced significant momentum, with the government’s efforts driving a surge in private and foreign investment.

By aligning with Vision 2030, these initiatives aim to create a thriving, diversified economy that maximizes the nation’s geographic and resource advantages.

Transport sector achieves record growth and job creation

The Minister of Transport and Logistics Services Saleh Al-Jasser underscored the transport industry’s role as a key enabler of economic activity. He revealed that the sector achieved a 17 percent growth rate in just two years.

“International indicators also confirm this progress, such as the Logistics Performance Index, which saw an improvement of 17 ranks, as well as indicators for air connectivity, maritime connectivity, and road service quality,” Al-Jasser said.

He added: “Among other significant indicators is the reduction in fatalities and severe accidents on roads, achieved through an integrated national effort with other government entities. There is no doubt that progress has also been made across different modes of transport.”

The minister also highlighted that Saudi Arabia’s aviation sector is undergoing significant improvements, with a 50 percent increase in the number of international and domestic destinations connected to the Kingdom compared to pre-pandemic levels.

This reflects the sector’s rapid growth and its role in enhancing connectivity and economic activity.

A key goal of Vision 2030 is to create jobs and provide dignified employment opportunities for citizens.

“Saudi Arabia’s transport sector is at the core of our economic diversification efforts, providing critical infrastructure for all other industries,” Al-Jasser said.

He continued: “Investments exceeding SR447 billion have been made in the sector since the launch of the strategy. This includes more than 300 new aircraft ordered by national airlines, the highest in the Kingdom’s history, alongside significant expansions in logistics zones, maritime infrastructure, and other key areas.”

Al-Jasser highlighted the sector’s role in creating jobs, with 122,000 new employment opportunities generated by the third quarter of this year compared to the same period in 2023.

Additionally, women’s participation in transport has risen to 29 percent, a notable increase in a traditionally male-dominated field.

“The focus on developing local content has been equally impactful,” he emphasized. “The transport system has increased local content from 39 percent to 50 percent, putting us on track to achieve our Vision 2030 target of 60 percent.”

During the same session, the Minister of Communications and Information Technology Abdullah Al-Swaha highlighted Saudi Arabia’s rapid progress in the technology sector, attributing this success to investments in artificial intelligence-native companies and digital transformation.

“Today, companies like Mozn and Amplify are leading the charge in AI and innovative solutions. The Kingdom is positioning itself as a global powerhouse for tech-driven growth,” Al-Swaha said.

He continued: “The next phase will focus on technology manufacturing and exports. With the support of His Royal Highness the Crown Prince, we will further strengthen our National Program for Technology Development to ensure Saudi Arabia’s technological sovereignty and prosperity.”

Al-Swaha emphasized the Kingdom’s commitment to leveraging resources and infrastructure to build a globally competitive tech economy.

“This is a clear message to all tech professionals: we are ready to lead,” he concluded.


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

PIF,  Bpifrance sign $10bn MoU to boost Saudi-French financial ties
Updated 35 sec ago
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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.


PIF prepares for Third Private Sector Forum in February 2025

PIF prepares for Third Private Sector Forum in February 2025
Updated 14 min 55 sec ago
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PIF prepares for Third Private Sector Forum in February 2025

PIF prepares for Third Private Sector Forum in February 2025

JEDDAH: Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, is set to host the third edition of its highly anticipated Private Sector Forum, a crucial platform for fostering corporate sector engagement with the Kingdom’s economic transformation.

The two-day event, scheduled for Feb. 12-13 at the King Abdul Aziz International Conference Center, will offer a series of specialized workshops led by experts from PIF and its portfolio companies.

These workshops aim to provide the private sector with valuable insights into localization investments and supply chain opportunities, while also highlighting the expected demand for key products and services. The goal is to equip businesses with the information needed to make informed investment decisions.

PIF noted that the forum will play a central role in advancing Saudi Arabia’s Vision 2030, which underscores the importance of partnerships between the public, private, and nonprofit sectors, as well as with international collaborators, in driving the Kingdom’s long-term aspirations.

As part of its efforts to build a more diversified and resilient economy, Saudi Arabia is focusing on increasing local production, supporting innovation, and creating a business-friendly environment that encourages both domestic and foreign investment.

A series of economic reforms have been implemented to improve the quality, efficiency, and digitalization of services, all aimed at supporting the private sector.

In addition, various programs, initiatives, funds, incubators, and accelerators have been launched to help the private sector overcome challenges, positioning it as the primary engine of the Kingdom’s economic growth.

During the forum, PIF will announce several key initiatives and programs that reflect the fund’s commitment to deepening its collaboration with the private sector.

These announcements will include major partnerships with PIF portfolio companies, showcasing the tangible progress of the Kingdom’s efforts to drive economic development through corporate collaboration.

The forum will also serve as a platform for thought leaders from key government agencies, PIF, and its portfolio companies to discuss the critical role of the private sector in Saudi Arabia's ongoing development. Success stories of corporate collaborations with PIF will be shared, highlighting new opportunities for the private sector in emerging industries and megaprojects.

Representatives from more than 90 PIF portfolio companies will have dedicated booths at the event, where they will present new projects and partnership opportunities for private sector stakeholders.

On its official website, PIF highlights numerous success stories of its strategic partnerships with both local and global companies, spanning sectors from manufacturing and energy to sustainable development.

 


Saudi Arabia, Pakistan sign deal to strengthen customs cooperation

Saudi Arabia, Pakistan sign deal to strengthen customs cooperation
Updated 25 min 37 sec ago
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Saudi Arabia, Pakistan sign deal to strengthen customs cooperation

Saudi Arabia, Pakistan sign deal to strengthen customs cooperation

RIYADH: Saudi Arabia and Pakistan have taken a significant step toward enhancing bilateral relations with the signing of a landmark agreement aimed at boosting cooperation in customs matters.

The deal is designed to streamline trade processes and promote the exchange of expertise and best practices in customs operations between the two nations.

The agreement was signed during the Zakat, Tax, and Customs Conference in Riyadh, with key figures in attendance, including Abdullah Al-Funtukh, deputy governor for strategy and trade facilitation at the Zakat, Tax, and Customs Authority, and Ahmad Farooq, Pakistan’s ambassador to Saudi Arabia.

Under the terms of the agreement, both governments will work closely to adopt advanced customs technologies, enhance administrative assistance, and improve trade facilitation.

This collaboration is expected to not only strengthen trade ties but also promote innovation and efficiency in customs operations, further cementing the economic relationship between the two countries.

The signing reflects the commitment of both governments to deepen their economic partnership and foster smoother trade exchanges. It also represents a broader effort to leverage innovation and strengthen cooperation in customs operations to support mutual growth.

Earlier in December, Pakistan’s Prime Minister Shehbaz Sharif met with Saudi Arabia’s Crown Prince Mohammed bin Salman during the One Water Summit in Riyadh.

According to Sharif’s office, the two leaders agreed to further enhance bilateral trade and investment ties. This marked the fifth meeting between Sharif and the Saudi crown prince in the past six months, reflecting a growing engagement between the two nations.

During their previous meeting in late October at the Future Investment Initiative in Riyadh, Sharif and the crown prince discussed agreements worth $2.8 billion across sectors such as agriculture, semiconductor manufacturing, and energy.

Sharif’s office stated that both leaders agreed on the need for a “qualitative change” in their economic, trade, and investment relationship. The crown prince emphasized the importance of advancing meaningful cooperation to promote economic growth and prosperity in Pakistan.

In addition to these high-level meetings, Pakistani and Saudi businesses have signed several key agreements. On Oct. 10, during a visit by Saudi Arabia’s investment minister to Islamabad, 27 memorandums of understanding were signed, valued at $2.2 billion.

Following Sharif’s visit to Riyadh on Oct. 30, the number of MoUs increased to 34, with a total value of $2.8 billion. As of Dec. 2, seven of these MoUs have been converted into formal agreements worth $560 million.

The recent deal on customs cooperation marks another important step in strengthening trade and investment ties between Saudi Arabia and Pakistan, signaling a commitment to ongoing collaboration and mutual growth.


Oman and Belgium strengthen green hydrogen ties with new MoU

Oman and Belgium strengthen green hydrogen ties with new MoU
Updated 50 min 47 sec ago
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Oman and Belgium strengthen green hydrogen ties with new MoU

Oman and Belgium strengthen green hydrogen ties with new MoU

RIYADH: Oman and Belgium have expanded their green hydrogen collaboration with the signing of a memorandum of understanding aimed at advancing the global clean energy economy.

The agreement, inked between Hydrom Oman and the Belgian Hydrogen Council, was a key milestone during Oman’s Sultan Haitham bin Tariq Al-Said’s official visit to Belgium, the Oman News Agency reported.

This agreement aligns with Oman’s goal to produce 1 million tonnes of green hydrogen annually by 2030, according to the International Energy Agency’s Renewables 2024 report. The country is one of the few in the Middle East advancing beyond its national targets for low-carbon hydrogen production.

Oman has set its sights on attracting $40 billion in green hydrogen investments by 2030, with that figure expected to rise to $140 billion by 2050. The MoU further supports these aspirations, creating a platform for exchange and collaboration between industrial entities, universities, research institutes, and policymakers in both countries.

The cooperation will focus on analyzing the value chains for importing green hydrogen, developing shipping infrastructure in Oman, and overcoming legislative challenges. Additionally, the deal will promote joint research initiatives and support technical training programs and awareness campaigns to foster green hydrogen adoption.

The MoU was signed by Salim bin Nasir bin Said Al-Aufi, Oman’s minister of Energy and Minerals and chairman of Hydrom Oman, and Tom Hautekiet, chairman of the Belgian Hydrogen Council. 

The signing was witnessed by high-level officials, including Belgian Prime Minister Alexander De Croo, who met with Sultan Haitham bin Tariq earlier this week. During the two-day state visit, both parties discussed enhancing bilateral cooperation in key areas such as energy, security, and infrastructure.

The agreement also follows Oman’s commitment to leveraging its low-cost land for hydrogen production projects aimed at both local industrial needs and export, particularly for ammonia. 

The IEA’s report highlights how hydrogen use in industry and hydrogen-based fuels are significantly contributing to the growth of renewable energy capacity in both Oman and the broader Middle East region.

Through this MoU, Oman and Belgium are further solidifying their positions as global leaders in green hydrogen, setting the stage for a robust partnership in clean energy innovation.


ACWA Power’s ESG focus aligns with global sustainability efforts, says official 

ACWA Power’s ESG focus aligns with global sustainability efforts, says official 
Updated 05 December 2024
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ACWA Power’s ESG focus aligns with global sustainability efforts, says official 

ACWA Power’s ESG focus aligns with global sustainability efforts, says official 

RIYADH: Saudi utility giant ACWA Power is leading efforts in the global energy and water sectors by significantly reducing the power consumption of desalination processes, a key official said.

In an interview on the sidelines of the COP16, Abdurahman Al-Sum, executive director of environmental, social, and governance at ACWA Power, highlighted the company’s achievements in cutting desalination energy use by more than 87 percent over the last decade. These efficiency milestones reflect the firm’s ongoing commitment to sustainability.

“We are also the first mover in the green hydrogen sector. We provide water to communities at a very low rate, and we also provide decarbonized energy to these communities, as well. This, in turn, indirectly helps tackle water scarcity,” Al-Sum explained.

ACWA Power, one of the largest private sector players in water desalination and renewable energy, is prioritizing environmental protection through initiatives in biodiversity, particularly in its water, sea, and land operations. 

Al-Sum explained that biodiversity protection is integrated at every stage of its operations, from design to execution. “We start with the design phase, and we do all the studies needed for biodiversity while we are doing environmental and social impact assessments,” he said.

The company has also committed to planting one million trees by 2030 as part of the Saudi Green Initiative, further underlining its dedication to sustainability. “We have a nursery in Shuaibah for whoever wants to contribute or participate. They can get the plants and start planting it,” Al-Sum added.

Highlighting ACWA Power’s emphasis on collaboration, Al-Sum discussed how the company relies on joint ventures and partnerships to fulfill its mission. “We always work with partners. We always work in joint ventures with others,” he said, referencing the company’s projects in the Red Sea region, which are vital to providing fresh water to local communities.

In terms of innovation, Al-Sum noted that research and development has been a central pillar of the company’s operations since its inception. ACWA Power’s focus on R&D has enabled significant reductions in desalination energy use. “Ten years ago, one cubic meter needed around more than 20 kilowatt-hours. Today, we are producing the same with less than three. It is 2 point something kWh per cubic meter,” he said.

Al-Sum also highlighted the company’s global efforts to support coral reef research in collaboration with the Coral Research and Development Accelerator Platform, a G20 initiative focused on protecting the world’s coral reefs. “Our coral research is freely available for global benefit,” he said.

The company’s contributions to Saudi Arabia’s broader sustainability goals were also discussed, with Al-Sum emphasizing the firm’s work in clean water, renewable energy, and climate action. “SDG number six, for instance, is about clean water, which is central to our business. We also focus on SDG seven, which promotes affordable and clean energy. Climate action is another major focus for us,” he explained.

Additionally, the Energy and Water Academy, a nonprofit that trains students in renewable energy and desalination, has trained over 15,000 students, many of whom are now working in Saudi Arabia’s energy and water sectors. “The academy is a nonprofit organization where even our competitors send their students and employees for training,” Al-Sum said, adding that the institution also ensures opportunities for women in these specialized fields.

Looking ahead, Al-Sum discussed the company’s role in Saudi Arabia’s transition to renewable energy, working with the government to integrate clean energy into the country’s grid. He emphasized the importance of a gradual transition to avoid disruption to daily life.

In closing, Al-Sum talked about a recent partnership with the Sekaya Charitable Foundation to build a micro water grid in one of ACWA Power’s operating communities. “We are partnering with Sekaya Charitable Foundation to build a micro water grid in one of the communities where we operate,” he said. 

This partnership, alongside others in the public and private sectors, is seen as a key part of ACWA Power’s role in contributing to Saudi Arabia’s economic and sustainability goals.