Saudi Arabia has a new economy, youth must be prepared: ACWA Power founder/node/2425141/business-economy
Saudi Arabia has a new economy, youth must be prepared: ACWA Power founder
Mohammad Abunayyan, the founder and chairman of ACWA Power, outlined the need for a robust foundation of knowledge and talent to navigate this transition successfully. Photo/Supplied
Saudi Arabia has a new economy, youth must be prepared: ACWA Power founder
Updated 13 December 2023
MANAL AL-BARAKATI
RIYADH: Realizing a significant demand for high-skilled labor in the green energy sector and navigating an imminent economic transition can only be achieved through equipping the youth, as noted by the founder of ACWA Power.
As the Kingdom transitions through Vision 2030, Mohammad Abunayyan said the past economic model becomes less relevant.
Speaking on a panel at the Global Labor Market Conference in Riyadh, the founder and chairman of ACWA Power outlined the need for a robust foundation of knowledge and talent to navigate this transition successfully.
“The old industry and the old economy are not relevant to the new economy. In Saudi Arabia, we have a new economy, thanks to our leader, and we need to be fast to prepare our youth for this economy,” said Abunayyan.
He encouraged all the giga-projects, such as NEOM, The Red Sea Project and Qiddiyah, to have technical institutes to prepare the young talent.
“The great news is that we have young talent who is very serious and committed. They will be the future and deliver our ambitions 100 percent.”
The chairman highlighted that ACWA Power’s technical institute, which admits only 500 seats, received over 150,000 applications, indicating a significant demand and a strong willingness from the nation’s youth to contribute to the energy transition.
“Crown Prince Mohammed bin Salman made it very clear how important this energy transition is. Saudi Arabia is going to lead not only in conventional energy as we are today but also in new energy and green energy. ACWA Power is going to be the new Aramco in renewable energy,” Abunayyan added.
Qiddiyah Investment Co. Managing Director Abdullah Al-Dawood echoed Abunayyan’s sentiments by emphasizing that while the youth is an integral part and stands at the heart of the vision, emphasizing the importance of honing the skillset within the job market and ensuring the adaptability of these skillsets to the changing market.
The future of work is constantly changing, with rapid advancements in technology, Al-Dawood noted, heralding green energy as the sector of the future.
“Therefore, we will need to focus, all of us as an ecosystem, on how to equip the future talent with the right mindset and skillset because a lot of jobs and skills we will be evolving past,” he added while emphasizing the need to focus on upscaling our youth.
Abunayyan also pointed out that infrastructure development in the Kingdom has led to increasing opportunities in the operations and maintenance of the facility management sector. Therefore, he added, there is a need to focus on the development of technical skill or vocational training.
Moody’s upgrades 6 Saudi GRIs to Aa3, citing strong sovereign support
Updated 12 sec ago
Nirmal Narayanan
RIYADH: Moody’s has upgraded the ratings of six major government-related institutions in Saudi Arabia, including the Public Investment Fund, to Aa3 from A1.
The move reflects strong sovereign backing and stable credit linkages to the government.
The agency also assigned the Aa3 rating to Saudi Aramco, Saudi Basic Industries Corp., and Saudi Electricity Co., as well as Saudi Power Procurement Co., and Saudi Telecom Co.
Moody’s assigns an Aa3 rating to companies with high quality, low credit risk, and strong ability to repay short-term debts, providing an assessment of the creditworthiness of borrowers, including governments, corporations, and other entities that issue debt.
“The rating action is a direct consequence of the sovereign rating action and reflects the credit linkages between the Government of Saudi Arabia and each of the six entities,” said Moody’s.
It added: “While several of these corporates benefit to varying degrees from international assets and cash flows, they all have significant credit linkages to the Saudi Arabia sovereign and are exposed to the domestic environment including political, economic, regulatory and social factors.”
The strong ratings received by these firms is an indication of Saudi Arabia’s robust economic stability, following Moody’s upgrade of the Kingdom’s credit rating to Aa3 with a stable outlook in November.
In May, Fitch Ratings upgraded Saudi Arabia’s credit rating to A+ with a stable outlook.
PIF
File/AFP
The upgrade of PIF’s long-term issuer rating to Aa3 from A1 aligns with the Saudi government’s rating action and reflects the strong credit linkage between the sovereign wealth fund and the Kingdom, according to Moody’s.
The report also noted that PIF is expected to receive strong and extraordinary support from the Saudi government whenever needed.
“PIF is closely interlinked with the Kingdom because it is one of the main vehicles of the Kingdom to execute its Vision 2030; PIF continues to receive contributions from the Kingdom via asset transfers; and given the fund’s investment focus and concentration in domestic markets,” added the US-based agency.
According to the analysis, PIF’s rating is in line with that of the Saudi government, meaning the fund’s rating could be downgraded if the sovereign rating declines.
In July, PIF’s consolidated financial statement revealed that the fund generated SR331 billion ($88.3 billion) in revenue in 2023 from its diverse investment portfolio, reflecting over 100 percent growth compared to 2022.
Saudi Aramco
Shutterstock
The report indicated that Aramco’s rating upgrade reflects the high likelihood of extraordinary support from the government if needed.
The US-based agency also noted that the energy company has access to nearly all of Saudi Arabia’s vast hydrocarbon resources and significant petrochemical operations.
Earlier in November, Aramco reported a net profit of SR103.37 billion for the third quarter of 2024, surpassing analyst expectations, which had projected a median net income of SR101.06 billion.
SABIC
File/AFP
According to Moody’s, SABIC’s rating upgrade is due to its strong reliance on the government and the high probability of receiving government support in the event of financial distress.
The report also highlighted the company’s strong global position in the petrochemical and fertilizer markets as another key factor behind the credit rating upgrade.
In the third quarter of this year, SABIC reported a net profit of SR1 billion, a turnaround from the net loss of SR2.87 billion in the same period last year.
SEC
Describing SEC as the “dominant vertically integrated electricity utility in Saudi Arabia,” Moody’s stated that the company served over 11.23 million customers as of Sept. 30, 2024.
“SEC’s rating reflects the significant credit linkages between SEC and its ultimate shareholder, the Government of Saudi Arabia. All of SEC’s assets are in Saudi Arabia and the company benefits from supportive government policies,” said the US-based agency.
In the third quarter of this year, SEC reported a net profit of SR4.7 billion, a 19.8 percent increase compared to the same period last year.
SPPC
Moody’s stated that SPPC has a clear public policy mandate that aligns its interests and objectives with those of the government.
As the sole licensed principal buyer of electricity in Saudi Arabia, the company has significant credit linkages with the government, which played a crucial role in the latest rating action.
Moody’s also noted that the rating reflects SPPC’s low business risk profile, its monopoly position in the Kingdom, and its ability to maintain a strong liquidity profile despite high working capital seasonality.
stc
According to the report, the rating upgrade of stc – the leading integrated telecommunications and ICT operator in Saudi Arabia – reflects the company’s strategic importance to the government, as well as the state’s high level of control through PIF.
Moody’s added that stc generates over 90 percent of its revenue in the Kingdom and plays a key role in supporting the government’s technological and digital ambitions, a crucial goal outlined in Vision 2030.
Affirming stc’s dominance in the Saudi market, the company reported a net profit of SR11.23 billion in the first nine months of this year, a 2 percent increase compared to the same period in 2023.
Eyewa raises $100m in Series C to boost expansion across GCC
Updated 25 min 56 sec ago
Nour El-Shaeri
RIYADH: Eyewa, a Riyadh-based eyewear retailer, secured $100 million in a series C funding round led by General Atlantic, with participation from Badwa Capital and Turmeric Capital.
The funding will fuel eyewa’s ambitions to expand its regional footprint, enhance its supply chain, and drive innovation in the eyewear sector.
The company plans to open at least 100 new stores in 2025, adding to its existing network of over 150 locations across the Gulf Cooperation Council region, including Saudi Arabia, the UAE, Kuwait, Bahrain, and Oman.
“We are proud of and feel even more emboldened by the remarkable trust placed in us by top global and regional investors,” said Anass Boumediene, co-founder and co-CEO of eyewa.
“In a sector that had not seen much disruption in the past decade, our success in this funding round reflects not only the strength of our business model, but also the spirit of innovation across the region’s startups as we continue to dream big and break new ground in our respective industries,” he added.
The capital will also support investments in research and development and talent acquisition as eyewa strengthens its position as a leader in the eyewear market, the company said in a press release.
As part of its growth strategy, eyewa plans to establish a “state-of-the-art” production hub in Riyadh in the first quarter of 2025.
The facility will include a warehouse, a fulfillment center, and a lens manufacturing unit, designed to improve the efficiency and speed of product delivery.
Owned and operated by eyewa, the center will provide a supply chain advantage that aligns with the company’s goal of delivering affordable and accessible eyewear to customers across the region.
Co-founder and co-CEO Mehdi Oudghiri emphasized the company’s customer-centric approach: “This accomplishment is a testament to the hard work of our team, our strong track record as an omnichannel retailer, and our commitment to challenging convention.”
“The additional capital will allow us to pursue the development of innovative products tailored to our customers, and continue pushing the boundaries of customer experience in our region,” Oudghiri added.
Based in both Riyadh and Dubai, eyewa was founded in 2017 and has grown into a prominent omnichannel retailer, combining e-commerce with physical stores to cater to rising consumer demand. The company also runs The Optical Club, a brand focused on providing accessible and affordable eyewear options.
“As part of our mission to make eyewear accessible to everyone, everywhere, we will leverage the support of our new partners and continue our retail expansion to all corners of the GCC,” said Abdullah Al-Rugaib, co-founder and managing director of eyewa.
He added that their extensive network and premier app, along with a tech-enabled supply chain, make eyewa the preferred retail platform for customers across the region.
Ziyad Baeshen, vice president at General Atlantic and a board member at eyewa, said: “The company’s impressive growth trajectory thus far is a testament to the vision of the leadership team and consumer appetite for authentic, direct-to-consumer brands in the Middle East.”
Additional investor support came from Badwa Capital and Turmeric Capital, both of whom lauded eyewa’s leadership and vision.
“Since first investing in eyewa, we have been impressed by the team’s clear vision and strong execution capabilities,” said Abdulaziz Al-Falih, partner at Badwa and board member at eyewa.
Fabio Andreottola, partner at Turmeric Capital, added: “eyewa represents the very essence of innovation and ambition in the Middle East’s retail landscape. As a business that has continually pushed boundaries in eyewear, we are proud to support eyewa’s team in this pivotal growth phase.”
Saudi Arabia, Djibouti ink deal to protect mutual investments
Updated 21 min 29 sec ago
REEM WALID
RIYADH: Investments between Saudi Arabia and Djibouti will see new protection measures thanks to an agreement between the two countries.
The deal, which was inked on the sidelines of the second day of the 28th World Investment Conference taking place in Riyadh from Nov. 25 — 27, aims to provide many advantages to investors.
These include investment protection, national treatment, and fair and equitable treatment, as well as transparency, and the right to resolve disputes through national courts or international arbitration, according to the Saudi Press Agency.
The agreement aims to provide a safe business environment that increases the volume of mutual investments in all sectors. It also seeks to further encourage bilateral relations and economic partnerships between the two sides.
This falls in line with the significant progress in bilateral trade, which reached approximately SR7 billion ($1.86 billion) in 2023, marking an important step toward sustainable growth and stronger economic ties between the Kingdom and Djibouti.
The deal was signed by the Kingdom’s Minister of Investment, Khalid Al-Falih, and by the Minister of State for Investments and Private Sector Development in Djibouti, Safia Ali Jadila.
The two sides stressed the importance of the deal’s role in supporting and motivating both countries’ private and government sectors to invest and achieve the ambitious investment programs witnessed by the two nations.
Earlier this month, logistical, trade, and investment ties between the two countries were further strengthened during the sixth session of their joint committee, held in Riyadh on Nov. 18. The meeting was chaired by Saudi Minister of Transport and Logistic Services Saleh Al-Jasser and Djibouti’s Minister for Foreign Affairs Mahamoud Ali Youssouf.
In his opening remarks during the event, Al-Jasser highlighted the deep-rooted ties between the two nations, noting that the discussions were just the beginning of efforts to enhance trade and investment, particularly in logistics.
In August, the two nations launched a maritime initiative to strengthen trade ties, including the establishment of new shipping lines to boost connectivity with East African markets, which serve a consumer base of around 500 million people.
These ongoing efforts between Saudi Arabia and Djibouti are set to significantly enhance bilateral trade, investment, and regional connectivity, marking a promising new chapter in their economic partnership.
Saudi Arabia and Tajikistan ink deal to boost non-oil trade
Updated 27 November 2024
Nirmal Narayanan
RIYADH: Saudi Arabia and Tajikistan have signed a memorandum of understanding to accelerate non-oil exports and knowledge sharing.
According to the Kingdom’s press agency, the MoU was signed by the Saudi Export Development Authority and the Export Agency of Tajikistan on the sidelines of an event which agreed to establish a bilateral business council between the countries.
That agreement was reached by the Federation of Saudi Chambers and the Chamber of Commerce and Industry in Tajikistan, and will see the promotion of trade and investment relations.
Bolstering non-oil exports and promoting trade between nations is a crucial goal outlined in Saudi Arabia’s Vision 2030 agenda, as the Kingdom is on an economic diversification journey by reducing its dependence on crude revenues.
The Saudi-Tajik Business Council is expected to serve as a platform for private sector communities in the Kingdom and Tajikistan to network, showcase their activities, and foster commercial partnerships.
The council will also work to open new areas for economic collaboration, facilitate continuous interaction between the private sectors of both countries, and exchange information on market opportunities.
During the ongoing 28th edition of the World Investment Conference in Riyadh, Bandar Alkhorayef, Saudi Arabia’s minister of industry and mineral resources, held a bilateral meeting with the First Deputy Prime Minister of Tajikistan, Hakim Khalikzoda, and discussed ways to enhance cooperation in the mining and industrial sectors.
Alkhorayef also met with the Tunisian Minister of Economy and Planning, Samir Abdel Hafeez, and discussed ways to develop bilateral relations in the industrial sector between both nations.
Earlier this month, the Kingdom and Tunisia signed an MoU to strengthen bilateral cooperation and promote direct investments between the two nations.
The deal, which was inked by Saudi Arabia’s Minister of Investment Khalid Al-Falih and Tunisia’s Minister of Economy and Planning, focuses on sharing regulations and laws to enhance the investment environment in both countries.
The agreement between Tunisia and Saudi Arabia is seen as a crucial step in deepening the economic and industrial ties between both nations as they seek to diversify their economies and create new growth opportunities through strategic partnerships.
A report released by Saudi Arabia’s General Authority for Statistics in November revealed that the country’s non-oil exports reached SR79.48 billion ($21.16 billion) in the third quarter of this year, representing a rise of 16.76 percent compared to the same period in 2023.
Saudi education POS defies trend, surges 178%: SAMA data
Updated 27 November 2024
MIGUEL HADCHITY
RIYADH: Education spending in Saudi Arabia soared 178.6 percent to SR249.5 million ($66.4 million) during the week of Nov. 17–23, bucking the broader decline across other sectors.
According to the Saudi Central Bank’s weekly point-of-sale transactions bulletin, education was the sole sector to record growth. Transactions in the category climbed 62.3 percent to 164,000.
By contrast, other consumer spending categories experienced sharp declines. Clothing and footwear posted the steepest drop, falling 25.1 percent to SR694 million. Hotel expenditures followed, dipping 23.5 percent to SR305.6 million.
Spending in restaurants and cafes, which accounted for the second-largest share of total POS value, decreased 19.6 percent to SR1.66 billion.
Overall, Saudi Arabia’s POS transactions shrank 13.1 percent week on week, with total expenditures declining to SR11.5 billion from SR13.2 billion in the prior week.
The central bank’s figures showed that the electronics sector saw a 9.3 percent slide to SR179.6 million, while telecommunications expenditures dropped 11.2 percent to SR104 million.
The food and beverages category — the largest contributor to POS transactions — saw a 9.8 percent dip to SR1.7 billion. Miscellaneous goods and services, which ranked third, fell 10.6 percent to SR1.3 billion. Together, the top three categories accounted for 41.3 percent, or SR4.7 billion, of the week’s total transaction value.
At 3 percent, the smallest decrease occurred in spending on construction and building materials, leading total payments to SR340.5 million. Expenditures in the health sector dipped by 7.3 percent to SR710 million.
Regional insights
Geographically, Riyadh dominated POS transactions, representing 35.9 percent of the total, with expenses in the capital reaching SR4.1 billion — an 8.2 percent decrease from the previous week.
Jeddah followed with a 14.2 percent dip to SR1.5 billion, and Dammam came in third at SR590.5 million, down 7.9 percent.
Hail experienced the most significant dip in spending, decreasing 20 percent to SR177.4 million. Tabouk and Abha recorded declines by 11.4 percent and 9.8 percent reaching SR209 million and SR134.9 million, respectively.
Makkah and Madinah saw the largest transaction decreases, falling 15.2 percent and 14.9 percent, respectively, to 7.6 million and 7.8 million transactions.
