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ACWA Power launches largest green hydrogen project in Indonesia, worth over $1bn

ACWA Power launches largest green hydrogen project in Indonesia, worth over $1bn
The development was announced at COP28. @ACWAPower
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Updated 06 December 2023
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ACWA Power launches largest green hydrogen project in Indonesia, worth over $1bn

ACWA Power launches largest green hydrogen project in Indonesia, worth over $1bn
Updated 06 December 2023
ARAB NEWS 
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RIYADH: Indonesia is on course to develop its largest green hydrogen project yet, worth over $1 billion, thanks to Saudi Arabia’s energy firm ACWA Power.  

The development, which was announced at COP28 in collaboration with Indonesian utilities company PT Perusahaan Listrik Negara, known as PLN, and chemicals entity PT Pupuk Indonesia, is projected to produce 150,000 tons of green ammonia annually, according to a statement.  

Also referred to as Garuda Hidrogen Hijau, the project is expected to be powered by 600 megawatts of renewable energy.  

This move is in line with ACWA Power’s global green hydrogen expansion endeavors, reinforcing the company’s commitment to a sustainable future.  

In 2022, ACWA Power announced that it would work with Indonesia’s state-owned electricity provider to develop battery storage for renewable energy facilities and green hydrogen development in the Asian country.  

The firm declared at the time that it had signed a memorandum of understanding with PLN at the B20/G20 Summit in Bali that coincided with the state visit of the Kingdom’s Crown Prince Mohammed Bin Salman to Indonesia.  

According to the terms of that MoU, ACWA Power and PLN would jointly investigate several avenues of partnership, including a project study for pump storage for a 600-800 MW hydroelectricity facility, investigating the possibility of a 4 GW battery energy storage system and the development of a green hydrogen and ammonia facility powered by hydroelectricity.  

Paddy Padmanathan, then-CEO and vice chairman of ACWA Power, said at the time: “As a nation that is fast-tracking economic growth, Indonesia is focused on advancing sustainable development through strategic partnerships.” 

Indonesia’s National General Energy Plan states that 23 percent of the country’s power should be generated via renewable energy sources by 2025.

ACWA Power’s vision is to ensure the ingenuity and entrepreneurship of the private sector and make electricity and desalinated water available reliably and responsibly to support the social development and economic growth of nations.

To achieve this, the firm’s mission is to deliver power and desalinated water at low cost.

Topics: COP28 ACWA Power Green hydrogen Indonesia

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Pakistan central bank cuts key rate by 250 bps to 15%

Pakistan central bank cuts key rate by 250 bps to 15%
Updated 27 sec ago
Reuters
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Pakistan central bank cuts key rate by 250 bps to 15%

Pakistan central bank cuts key rate by 250 bps to 15%
  • Monday’s move follows cuts of 150 bps in June, 100 in July and 200 in September
  • It takes the total policy rate cuts in the country to 700 bps in under five months
Updated 27 sec ago
Reuters

KARACHI: Pakistan’s central bank cut its key policy rate by 250 basis points to 15 percent on Monday, it said in a statement, for a fourth straight reduction since June, as the country keeps up efforts to revive a sluggish economy with inflation easing.
Most respondents in a Reuters poll last week expected a cut of 200 bps after inflation moved down sharply from a multi-decade high of nearly 40 percent in May 2023, saying reductions were needed to bolster growth.
Average consumer price index inflation in the South Asian country is 8.7 percent in the current financial year, which started in July, the statistics bureau says. The International Monetary Fund (IMF) expects inflation to average 9.5 percent for the year ending June.
Monday’s move follows cuts of 150 bps in June, 100 bps in July, and 200 in September that have taken the rate from an all-time high of 22 percent, set in June 2023 and left unchanged for a year. It takes the total cuts to 700 bps in under five months.
October inflation came in at 7.2 percent, slightly above the government’s expectation of 6 percent to 7 percent. The finance ministry expects inflation to slow further to 5.5 percent to 6.5 percent in November.
However, inflation could pick up again in 2025, driven by electricity and gas price increases after a new $7-billion IMF bailout, and the potential impact of taxes on the retail, wholesale and the farm sector announced in the June budget to take effect in January 2025, some analysts say.
 

Topics: Pakistan monetary polcy

Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable

Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable
Updated 04 November 2024
Nadin Hassan
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Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable

Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable
Updated 04 November 2024
Nadin Hassan

RIYADH: Saudi Arabia’s telecommunications company, Mobily, has entered into a cooperation agreement with Telecom Egypt to establish the first Saudi-owned subsea cable connecting the two nations across the Red Sea.

The agreement includes the installation of the subsea cable, which will be fully owned by Mobily, with landing stations in Duba, Saudi Arabia, and Sharm El-Sheikh, Egypt, as stated by Mobily on X.

This cable will serve as a link between Asia and Africa, creating a route to Europe by connecting Saudi Arabia with Egypt.

It will enhance connectivity options for Gulf countries and neighboring regions through Mobily’s digital network, integrating with Egyptian landing stations in the Mediterranean.

Additionally, it will provide new routes to improve service reliability and meet customer needs within the Kingdom and beyond.

“The new cable represents a significant milestone in strengthening Saudi Arabia's position as a leading international hub for telecommunications services and data traffic, in alignment with the goals of Saudi Vision 2030,” said Salman bin Abdulaziz Al-Badran, CEO of Mobily.

He added: “The signing of the agreement underscores our commitment to expanding our infrastructure and enhancing our capabilities both regionally and internationally, as Mobily’s new cable will connect Saudi Arabia to Egypt and improve communication flexibility between the Middle East and Europe.”

This agreement aligns with Mobily’s strategy to bolster its infrastructure and network capabilities. Building on its previous investments in subsea cables that connect global regions, the new cable will expand Mobily’s international reach and capacity.

“Complementing the newly established landing station in Sharm El-Sheikh, we are developing new crossing routes to connect Sharm El-Sheikh to the Mediterranean Sea,” stated Mohamed Nasr, managing director and CEO of Telecom Egypt.

He further said: “We are confident that this commercial agreement will be a valuable addition to our ongoing efforts to support this critical sector and cater to the rising demand for capacity and connectivity.”

By increasing capacity and expanding its global reach through new collaborations, Mobily is dedicated to enhancing its subsea network infrastructure both domestically and internationally.

“I am pleased with our cooperation with Telecom Egypt, which will enable us to offer the best services to all our customers around the world,” Al-Badran noted.

“Telecom Egypt is dedicated to advancing the international telecommunications infrastructure by enhancing the geographical diversity of the global subsea cable networks,” Nasr added.

This commitment aims to provide cutting-edge digital solutions to customers and support the sustainable growth of the Kingdom’s ICT sector through advanced infrastructure.

Topics: Mobily Egypt

Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 

Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 
Updated 57 min 48 sec ago
REEM WALID 
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Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 

Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 
Updated 57 min 48 sec ago
REEM WALID 

RIYADH: Saudi Arabia and Turkiye deepened commercial ties by signing 10 cooperation agreements at an event in Istanbul, advancing strategic initiatives across diverse sectors.   

The Saudi-Turkish Business Forum spotlighted opportunities for joint ventures in agriculture, food, and tourism, along with potential collaborations in advanced manufacturing, construction, and infrastructure. Other key areas included technology, innovation, and logistics, the Saudi Press Agency reported.   

Organized by the Federation of Saudi Chambers and the Foreign Economic Relations Board of Turkiye, the event attracted over 450 companies and several government agencies from both nations.   

This comes as the trade volume between Riyadh and Ankara reached SR25.4 billion ($6.76 billion) in 2023, marking a 15.5 percent growth. Saudi exports to Turkiye represented SR15.6 billion, while Turkish imports to the Kingdom accounted for SR9.8 billion.    

Turkish Minister of Trade Omer Bolat said: “Turkiye aims to raise the volume of its bilateral trade with the Kingdom to $30 billion in the medium and long term, and diversify its fields, especially tourism, health, infrastructure, information technology, and the defense industry.”    

The minister praised the strong bilateral relationship, the quality of Turkish products, and the success of the country’s services sector, encouraging mutual benefit from these strengths. He also highlighted the Kingdom’s transformations across sectors such as mining, health, technology, and communications.   

“Today in Istanbul, I met with my brother, His Excellency the Turkish Minister of Trade Omer Bolat, and we discussed strengthening relations and expanding trade partnerships for the good and interest of the two brotherly countries,” Saudi Minister of Commerce Majid Al-Qasabi said in a post on X.     

Fayez Al-Shaili, vice president of the Federation of Saudi Chambers, noted a qualitative shift in Saudi-Turkish relations. He stated that the establishment of the business council has played a critical role in enhancing economic relations, positioning the Kingdom among Turkiye’s eight largest trading partners. 

The number of Saudi companies operating in Turkiye has surged from 11 in 2011 to over 1,400 in 2023, with total investments reaching SR18 billion, according to Al-Shaili. 

Sami Al-Osaimi, chairman of the Saudi-Turkish Business Council, highlighted that around 390 Turkish companies are now investing in the Saudi market, with the council targeting a trade exchange volume of $10 billion in the short term. 

The forum showcased investment prospects for Turkish investors within the framework of Saudi Vision 2030, particularly in tourism infrastructure, industrial zones, healthcare, digital services, and energy. 

Additionally, the business council met on the sidelines of the forum to discuss plans, initiatives, and the government support needed to address challenges faced by investors from both countries.

Topics: Federation of Saudi Chambers Saudi-Turkish Business Forum

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SABIC sees turnaround as it reports $266.2bn Q3 profit

SABIC sees turnaround as it reports $266.2bn Q3 profit
Updated 04 November 2024
Nadin Hassan
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SABIC sees turnaround as it reports $266.2bn Q3 profit

SABIC sees turnaround as it reports $266.2bn Q3 profit
Updated 04 November 2024
Nadin Hassan

RIYADH: Petrochemical firm Saudi Basic Industries Corp. reported a net profit of SR1 billion ($266.27 million) for the third quarter of 2024, a marked improvement from a loss of SR2.87 billion in the same period last year.

SABIC attributed its positive results to various factors, including higher income from operations by SR797 million, bolstered by a heightened gross profit margin offset by raised operating costs.

The company’s revenue rose 3 percent year on year to SR36.88 billion, primarily driven by increased average selling prices despite a slight decrease in sales volume.

The firm also benefited from gains related to divesting its Functional Forms business and favorable currency exchange fluctuations.

According to the London Stock Exchange Group, the third quarter profit missed analyst forecasts of SR1.6 billion, as reported by Reuters.

A notable factor was SABIC’s reduced losses from discontinued operations, amounting to SR3.3 billion, mainly stemming from a fair value reassessment of the Saudi Iron and Steel Co., known as Hadeed.

The reclassification of Hadeed as a discontinued operation will continue until the completion of its sale, which was previously announced by the company.

When compared with the second quarter of 2024, however, net profit fell from SR2.18 billion due to a lower gross profit of SR194 million, attributed to softer selling prices and higher feedstock costs.

The quarter also saw a rise in operating expenses by SR223 million and a decline in profits from associates and joint ventures by SR313 million, following a fair value assessment related to the firm’s agreement to sell its shares in Alba, announced in September.

Despite these challenges, SABIC’s total revenue for the first nine months of 2024 reached SR105.28 billion, with a net profit of SR3.43 billion, a sharp turnaround from the SR1.04 billion loss in the same period last year.

This was aided by reduced discontinued operation losses and lower Zakat expenses by SR1.05 billion, stemming from regulatory-driven provision adjustments in June.

In September, Saudi Arabia’s Mining Co. completed the acquisition of SABIC’s 20.62 percent shareholding in Aluminium Bahrain, also known as Alba, marking a significant milestone in its strategy for regional growth.

According to a press statement, the transaction valued between SR3.62 billion ($960 million) and SR3.97 billion.

Topics: SABIC Saudi Basic Industries Corp. (SABIC)

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Saudi Vision 2030 to catalyze banking sector growth: Moody’s

Saudi Vision 2030 to catalyze banking sector growth: Moody’s
Updated 04 November 2024
Nirmal Narayanan
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Saudi Vision 2030 to catalyze banking sector growth: Moody’s

Saudi Vision 2030 to catalyze banking sector growth: Moody’s
  • Rating agency said development of planned mega projects in Saudi Arabia will play important role in generating huge business and lending opportunities for banks
  • Kingdom’s housing program has been a driver of credit growth for the banks over the last five years
Updated 04 November 2024
Nirmal Narayanan

RIYADH: Saudi Arabia’s Vision 2030 program to diversify the economy could accelerate the country’s banking sector development in the coming years, according to an analysis by Moody’s. 

In its latest report, the US-based credit rating agency said the development of planned mega projects in Saudi Arabia will play an important role in generating huge business and lending opportunities for banks. The infrastructure required to host major events like the Asia Cup in 2027, the Asian Winter Games in 2029, Expo 2030, and the FIFA World Cup in 2034 is expected to support this growth further.

Vision 2030 aims to reduce the Kingdom’s decades-long dependence on crude revenues and steadily bolster its presence in other sectors like tourism, technology, and real estate. 

“Planned mega projects to diversify the economy include the tourism, real estate, and infrastructure sectors, and the government provides the country’s banks the opportunity to help fund them,” said Abdulla Al-Hammadi, assistant vice president and analyst at Moody’s Ratings. “One part of Saudi Vision 2030 is a plan to raise home ownership to 70 percent by 2030 from 47 percent in 2016.”

The report said the Kingdom’s housing program has been a driver of credit growth for the banks over the last five years, with household mortgages reaching SR607 billion ($161.67 billion) at the end of 2023, up from SR110 billion in 2016. They now comprise around 24 percent of total banking sector loans.

“Given these mortgages were secured at a fixed rate during a time of low interest rates and that tenures are often for 25 to 30 years, this could place some pressure on margins in the sector. We believe that larger banks will be hit hardest due to their dominant position in the Saudi mortgage market,” said Al-Hammadi. 

If deposit development continues to lag loan growth, banks could also face growing funding shortages. Given the nature of mortgage fixed-rate loans, it may be challenging for financial institutions to offload them in the still-developing secondary markets.

The agency said Saudi banks could also face challenges in this run, which include insufficient deposit growth to meet the growing credit demand associated with Vision 2030 infrastructure and development projects. 

“A challenge is that availability of deposit growth is lagging behind accelerated credit growth at Saudi banks, while the home-ownership push has packed the banks with long-term, fixed-rate mortgages that tie up funds. 

“The banks will need to tap more confidence-sensitive market funding. This could entail foreign deposits, interbank syndications, and debt issuance, particularly Islamic bonds or sukuk,” said Al-Hammadi.

According to the report, reliance on short-term foreign funding will be riskier than long-term, such as senior unsecured debt and additional tier one, since long-term allocations will better match these banks’ long-term loans.

Topics: Saudi Arabia Vision 2030 Moody’s Saudi banking

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