SDF finances 19 projects worth SR2.4bn in 2015

Updated 05 July 2016

SDF finances 19 projects worth SR2.4bn in 2015

RIYADH: The Saudi Development Fund (SDF) financed 19 development projects worth SR2.45 billion in 2015. Ten of these are in Asia and nine in Africa.
With this, the fund’s total loans and contributions reached SR47 billion to finance 578 development projects and programs since it was formed last year.
Finance Minister Ibrahim Al-Assaf assured that the fund is continuing its activities in 82 countries and especially in Africa and Asia.
He said it financed 19 programs and projects in 2015, which were related to social infrastructure, transport, telecommunications, energy, agriculture and other sectors.
It funded SR2.45 billion taking the total of loans and contributions to SR47 billion to finance 578 development projects and programs since it was formed last year.
He added that the report discovered that in 2015 the export program approved 16 export operations of national commodities at a gross value of SR8.1 billion, and approved, issued and renewed 15 documents as national export guarantees at SR2.6 billion. Since its launch in 2001 and till 2015, it conducted 287 financial operations and guarantees valued at SR48.5 billion.
The report stated that the SDF continues to support development in a number of countries.
The fund signed 19 agreements in the 2015-2016 fiscal with 15 developing countries at SR2.45 billion. Nine of these are in Africa totally valued at SR1.18 billion and 10 projects in Asia at SR1.27 billion.

On the sectoral distribution of temporary loans from the fund, the report showed it contributed to 19 projects and development programs worth SR2.45 billion in 2015. The energy sector got the biggest share with three projects at SR758.75 million at 30.92 percent followed by the transport and telecommunication sector of seven projects at SR647.25 million, or 26.37 percent. This is followed by the other sectors at SR611.25 million, or 24.91 percent.
The social infrastructure sector has five projects, two of them in health, one in education, and two in housing and urbanization at SR343.12 million, or 13.98 percent, amounting to 3.82 percent of the gross contributions of the fund.
Joint financing of loans in 2015 was done in 10 projects across 10 developing countries totaling SR1.48 billion, according to Al-Hayat.


Tankers defer retrofits to cash in on freight rates

Updated 53 min 52 sec ago

Tankers defer retrofits to cash in on freight rates

  • The rates for chartering a supertanker from the US Gulf Coast to Singapore hit record highs of more than $17 million and a record $22 million to China earlier this week

SINGAPORE: Tankers that had been scheduled to install emissions-cutting equipment ahead of stricter pollution standards starting in 2020 have deferred their visits to the dry docks to capitalize on an unexpected surge in freight rates, three trade sources said.

US sanctions on subsidiaries of vast Chinese shipping fleet Cosco in September sparked a surge in global oil shipping rates as traders scrambled to find non-blacklisted vessels to get their oil to market.

The rates for chartering a supertanker from the US Gulf Coast to Singapore hit record highs of more than $17 million and a record $22 million to China earlier this week.

By comparison, prior to the sanctions, shipping crude from the US Gulf to China cost around $6 million-$8 million.

The extraordinary spike in freight rates proved too good to miss for some shipowners who were due to send vessels to the dry docks for lengthy retrofitting and maintenance work.

“We can confirm several owners have postponed dry docking earlier scheduled for the months of October and November to take advantage of the skyrocketing freight rates,” said Rahul Kapoor, head of maritime and trade research at IHS Markit in Singapore.

The shortage of ships to move crude oil was so acute that some shipowners also switched from carrying so-called “clean” or refined fuels like gasoline to “dirty” cargoes that include crude oil, despite the costs of having to clean them later.

“Current rate levels are a no-brainer for pushing back scrubber retrofitting,” said Kapoor.

Starting Jan. 1, 2020, the International Maritime Organization (IMO) requires the use of marine fuel with a sulfur limit of 0.5 percent, down from 3.5 percent currently, significantly inflating shippers’ fuel bills.

Only ships fitted with expensive exhaust cleaning systems, known as scrubbers, which can remove sulfur from emissions, will be allowed to continue burning cheaper high-sulfur fuels.

Ships must be sidelined for up to 60 days for fitting these, according to IHS Markit and DNV GL.

While freight rates have abruptly come off their recent highs, shipowners can still profit from the higher charges.

“One cargo loading at current elevated rate levels can not only finance the scrubber capex, but also account for extra costs incurred to install the scrubber at a later date,” said Kapoor, referring to the capital expenditure of fitting the scrubber.

Freight rates are expected to hold firm for the rest of the year.

“With seasonal demand support and tanker supply deficit still pronounced, we expect (fourth-quarter) tanker freight rates to stay elevated and end the year on a high note,” Kapoor said.