Saudi government assets to remain strong through 2030: S&P Global 

Saudi government assets to remain strong through 2030: S&P Global 
According to S&P Global, the increasing debt issuance to fund Vision 2030 projects may exert pressure on Saudi Arabia’s net asset position until the end of the decade. Shutterstock
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Updated 12 May 2024
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Saudi government assets to remain strong through 2030: S&P Global 

Saudi government assets to remain strong through 2030: S&P Global 

RIYADH: The Saudi government’s assets are forecasted to remain strong amid steady economic diversification efforts aimed at reducing the Kingdom’s dependence on oil, stated a new report. 

According to S&P Global, the increasing debt issuance to fund Vision 2030 projects may exert pressure on Saudi Arabia’s net asset position until the end of the decade. However, the Kingdom will mitigate this impact through its wise and prudent fiscal policies. 

“S&P Global Ratings expects that growing debt issuance to finance Vision 2030 projects could pressure the sovereign’s fiscal metrics. In our base case, however, we expect the government’s net asset position will deteriorate but remain strong,” stated the credit-rating agency. 

It added: “The ramp-up in fiscal deficits and debt could weaken the government’s balance sheet far sooner than returns on investment will accrue. Much will depend on the roles that foreign investment, the private sector, and capital markets will play in financing Vision 2030.”  

According to the report, Saudi Arabia’s sovereign wealth fund, spearheading the Kingdom’s economic diversification efforts, aims to invest $40 billion annually in the local economy to bolster Vision 2030 goals. 

The US-based firm highlighted that the Saudi government will continue to support the Public Investment Fund in various ways, including funding essential infrastructure for mega and giga project sites. 

Domestic banks to play key role  

Furthermore, S&P Global added that the Saudi government and PIF will try to boost external funding and diversify the investor base to mitigate the impact on domestic banks’ liquidity. 

“We expect domestic banks will still play a key role in funding the public and corporate sectors, given the large size of projects. Domestic banks will likely see a shift from mortgage lending toward corporate lending and Vision 2030 project funding,” noted the credit rating agency. 

However, the report added that the Kingdom’s banking system alone cannot accommodate all the financing needs associated with Vision 2030. 

Banks in Saudi Arabia will use alternative strategies, such as raising additional external funding, to meet the increasing credit demand. 

“In 2023, Saudi banks injected almost $55 billion in the form of investments and financing in the public and corporate sectors, excluding financing to the retail sector. In 2024, we expect banks will grow their lending book by 8 percent to 9 percent,” said S&P Global.  

It added: “Under the assumption that 70 percent of that lending is for corporates, banks can inject $40 billion to $44 billion in financing. A portion of that could be used in Vision 2030.”  

The report projected an approximate 8 percent increase in deposits for 2024, with external debt issuance expected to reach around $10 billion to facilitate anticipated lending growth. 

Earlier this month, another analysis by the agency underscored the robust condition of the Saudi banking sector, highlighting strong asset-quality indicators and overall capitalization. 

S&P Global further noted its expectation for banks’ solid profitability and conservative dividend payouts to sustain their capitalization over the next one-to-two years. 

The report also noted that Saudi banks have already accessed international capital markets, a trend the credit-rating agency expects to persist for the next three to five years. 

Furthermore, the Saudi government and its related entities are anticipated to inject deposits into the banking system, thereby bolstering the credit growth of financial institutions in the Kingdom. 

Public and private investment 

S&P Global also predicted that certain Vision 2030 projects will extend beyond this decade, facilitating a more organic increase in economic activity and foreign investment. 

While PIF and the government will persist in debt-financed investment for Vision 2030, other government-related entities, including portfolio companies of the wealth fund, private-sector participants, and foreign direct investment, will also play crucial roles in implementing economic diversification projects in the Kingdom. 

The report underscored that FDI inflows have averaged around 2 percent of Saudi Arabia’s gross domestic product over the past three years, with the Kingdom aiming to increase this to 5.7 percent by 2030. 

According to S&P Global, the opening of free economic zones and the regional headquarters program could expedite the growth of FDI inflows in the coming years. 

“Future FDI inflows could offer upside on the back of growing investment opportunities and government efforts to improve regulatory and business conditions. These efforts include the opening of free economic zones and a 30-year tax break for multinational companies opening regional headquarters in the country,” added the agency.  

It underscored the role of the Saudi capital market in catalyzing the Kingdom’s economic diversification efforts.  

The report highlighted that the Saudi exchange is collaborating closely with the Capital Markets Authority to streamline processes and attract both local and international issuers by enhancing market functionality and efficiency. 

These initiatives by Tadawul will ultimately enhance the appeal of debt and equity transactions on capital markets and facilitate a more diversified funding base for Vision 2030 projects. 

It also noted that the Saudi government possesses additional assets it could leverage to support Vision 2030 and prevent an expanding debt bubble. This includes an 82 percent stake in Saudi Aramco, which boasts a market capitalization exceeding $7 trillion. 

“The government has thus far transferred a total 16 percent stake in Saudi Aramco to the PIF and its subsidiaries, which has substantially added to the PIF’s asset base, leading to dividend returns that it can deploy toward Vision 2030 projects. The government could choose to sell further stakes in Aramco through an IPO (initial public offering) to raise additional financing,” added the agency.  


Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment

Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment
Updated 47 min 25 sec ago
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Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment

Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment

JEDDAH: Saudi Arabia is boosting its energy security with an SR13.4 billion ($3.57 billion) investment to expand the Qurayyah power plant, adding 3.01 gigawatts to meet growing demand and support economic growth.

Saudi Electricity Co. and ACWA Power have signed a power purchase agreement with Saudi Power Procurement Co., the Kingdom’s sole licensed electricity buyer, to expand Qurayyah Independent Power Plant. This facility is the largest combined-cycle gas-fired independent energy station in the world.

The initiative supports the Kingdom’s Vision 2030 by improving electricity generation efficiency, reducing costs, and diversifying energy sources to replace liquid fuels in the power sector. It aims to enhance reliability and sustainability through advanced combined-cycle gas turbine technology while reducing carbon emissions and promoting environmental conservation.

The project, overseen by the Ministry of Energy, aims to increase Saudi Arabia’s electricity capacity and efficiency by adding combined-cycle power plant units designed for future carbon capture. According to the principal buyer, the deal was signed with a consortium led by ACWA Power, SEC, and Hajji Abdullah Alireza & Co. Ltd., with SEC and ACWA Power each holding a 40 percent stake.

As one of the Kingdom’s largest power generation projects, it includes the financing, construction, ownership, and operation of a combined-cycle gas power plant, along with the development and transfer of a 380-kilovolt electrical substation, according to the Saudi Press Agency.

SEC is the largest electricity producer, transmitter, and distributor in the Middle East and North Africa, serving over 11 million customers.

ACWA Power — the world’s largest private desalination company — announced that on Feb. 19 it received a notice from the Al-Shuaiba 2 Solar PV Independent Power Plant project company, confirming that it has been granted the commercial operation certificate by the SPPC for the first, second and third groups, with a total capacity of 2,060 MW.

In a statement on Tadawul, the firm added that the initiative is now fully operational, noting that it owns a net stake of 35.01 percent share in the project company.

The body expects the financial impact to be reflected in the current year’s second quarter.


Saudi investment ministry inks deal with Sana to boost entrepreneurial ecosystem in Al-Ahsa

Saudi investment ministry inks deal with Sana to boost entrepreneurial ecosystem in Al-Ahsa
Updated 20 February 2025
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Saudi investment ministry inks deal with Sana to boost entrepreneurial ecosystem in Al-Ahsa

Saudi investment ministry inks deal with Sana to boost entrepreneurial ecosystem in Al-Ahsa

RIYADH: A new cooperation agreement between the Ministry of Investment and Prince Ahmed bin Fahd bin Salman Center will see Saudi Arabia enhance its entrepreneurial ecosystem in the Al-Ahsa region.

The deal signed with the center, also known as Sana, focuses on attracting pioneering companies and innovators while fostering a business-friendly environment.

The Kingdom is increasingly being recognized for its growing enteprise-friendly landscape, securing third position in the 2023-2024 Global Entrepreneurship Monitor report.

The latest initiative, inked at the Al-Ahsa Forum 2025 in Al-Ahsa, also seeks to foster greater engagement with creative thinkers and business leaders through investment meetings and events, and will support the issuance of entrepreneurial licenses and provide access to essential services.

Moreover, the Sana agreement seeks to explore investment opportunities, encourage strategic partnerships, and promote investment alliances that enhance the competitiveness of the entrepreneurship sector in Saudi Arabia.

The new deal comes against a backdrop of venture capital pouring into the Kingdom, with the country retaining its position as the leading destination for such funds in the MENA region in 2024, raising $750 million, according to a report from regional venture platform MAGNiTT.

This marked the second consecutive year the Kingdom has led regional VC rankings. Saudi Arabia accounted for 40 percent of the total amount deployed in MENA, closing 178 deals, the most of any nation in the region.

Speaking to Arab News at at the LEAP 2025 Tech Conference held in February, Mohammed Al-Zubi —founder of Saudi venture capital firm Nama Ventures — explained that the nation is rapidly becoming a key player in the regional technology ecosystem and is emerging as the “center of gravity” for Middle East startups.

Al-Zubi believes Saudi Arabia’s support for the startup ecosystem is unmatched globally. Having spent time in Silicon Valley, London, and the Middle East, he argued that the Kingdom’s government-led initiatives are unparalleled.

According to the international policy advisory and research organization Startup Genome, Riyadh ranked among the top five startup ecosystems in the Middle East and North Africa in June, in collaboration with the Global Entrepreneurship Network.


King Salman approves Saudi riyal symbol

King Salman approves Saudi riyal symbol
Updated 20 February 2025
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King Salman approves Saudi riyal symbol

King Salman approves Saudi riyal symbol

RIYADH: King Salman on Thursday approved the official symbol for the Saudi riyal, marking the beginning of a new chapter in the Kingdom’s financial journey, as reported by the Saudi Press Agency.

Saudi Central Bank Gov. Ayman Al-Sayari expressed his gratitude to the nation’s leadership for launching the symbol, which he believes “reinforces Saudi Arabia’s financial identity both locally and globally.”

Al-Sayari further noted that this initiative underscores the growing international influence of the Saudi riyal, while also fostering a sense of national pride and cultural unity. He added that the newly designed symbol represents the Kingdom’s rich cultural heritage.

The symbol, which blends Arabic calligraphy with the name of the national currency, “riyal,” will be utilized in financial and commercial transactions both within the Kingdom and internationally.

The central bank governor also commended the collaborative efforts of all parties involved in the project, including the Ministry of Culture, the Ministry of Information, and the Saudi Standards, Metrology, and Quality Organization.


Saudi Wafi Energy Pakistan reports $11.8 million profit for 2024

Saudi Wafi Energy Pakistan reports $11.8 million profit for 2024
Updated 20 February 2025
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Saudi Wafi Energy Pakistan reports $11.8 million profit for 2024

Saudi Wafi Energy Pakistan reports $11.8 million profit for 2024
  • The company became the majority shareholder of Shell Pakistan Limited in November 2024
  • It has formed a partnership in Thar Coal Project following a win in Saindak mining project

ISLAMABAD: Saudi company Wafi Energy Pakistan Limited has announced its financial results for 2024, reporting a profit of Rs3.3 billion ($11.8 million), according to a statement from the group on Thursday.
Wafi Energy, an affiliate of the Asyad Group, became the majority shareholder of Shell Pakistan Limited (SPL) in November last year and now holds approximately 87.78% of the total issued share capital of SPL. However, the Shell brand will remain in Pakistan through retail and brand licensing agreements, with SPL as the exclusive brand licensee.
The financials of the company for the year ending December 2024 were announced by its board of directors.
“The company reported a profit after tax of Rs3.3 billion for 2024 compared to a profit of Rs5.8 billion [$20.7 million] in 2023,” the company said. “It is important to note that the 2023 results included a one-time income of PKR10.7 billion [$38.3 million] related to the waiver of Shell Group liabilities.”
The company highlighted that it increased its market share with Helix and Advance Lubricants and formed a partnership in the Thar Coal Project following a win in the Saindak Gold and Copper mining project.
“The mobility business also made significant strides, expanding its network by introducing 16 new sites and rebuilding nine existing ones,” the statement added. “The convenience retail business demonstrated strong growth, with a 28% year-on-year increase.”
SPL is one of the oldest multinationals in Pakistan, with a network of over 600 sites, countrywide storage facilities and a broad portfolio of global lubricant brands.
Shell has supported Pakistan’s development by providing energy for major projects like Mangla Dam and Kotri Barrage, powering Pakistan International Airlines’ first flights, expanding road infrastructure and fostering innovation among local entrepreneurs.


Oman, Saudi Arabia ink 3 agreements to strengthen trade ties 

Oman, Saudi Arabia ink 3 agreements to strengthen trade ties 
Updated 20 February 2025
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Oman, Saudi Arabia ink 3 agreements to strengthen trade ties 

Oman, Saudi Arabia ink 3 agreements to strengthen trade ties 

RIYADH: Oman and Saudi Arabia signed three agreements on trade, legal services, and manufacturing to strengthen economic cooperation and private sector collaboration. 

The deals, announced at the Omani-Saudi Business Forum in Muscat, include plans for a cloud-based warehouse and inventory management system, specialized legal consultations for the Omani market, and a gold and jewelry manufacturing facility in the country. 

This comes as economic ties between the two nations continue to grow, with bilateral trade reaching 2.18 billion Omani rials ($5.65 billion) by December and 1,496 Saudi-partnered companies operating in Oman. 

Omani Minister of Industry and Investment Promotion Qais bin Mohammed Al-Yousef highlighted this growth during the forum, emphasizing its role in enhancing bilateral cooperation. 

The event featured working papers from both sides, with Oman showcasing strategic projects and investment opportunities, while Saudi Arabia outlined its investment framework and industries that are driving economic diversification. 

Key sectors highlighted during the forum included real estate development, mining, and industry. Oil and gas, logistics, and health were also major focus areas. Additionally, information technology, finance, insurance, retail, and food security were emphasized. 

Faisal Abdullah Al-Rowas, chairman of the Oman Chamber of Commerce and Industry, underscored the forum’s role in unlocking new trade and investment opportunities. He noted that the Rub Al-Khali border checkpoint has significantly facilitated cross-border trade and investment flows. 

Discussions also focused on expanding export and import operations through the Rub Al-Khali port, as well as enhancing trade exchange and private sector cooperation, particularly in existing projects. 

Sheikh Ali bin Hamad Al-Kalbani, head of the Omani side of the business council, stressed that the body aims to strengthen communication between the private sector and government agencies in both countries. He highlighted its efforts to support mutual investments, address challenges faced by investors, and explore new opportunities. 

On the Saudi side, Nasser bin Saeed Al-Hajjri emphasized that cooperation between the two nations supports sustainable development and enhances investment opportunities across various sectors in line with Saudi Vision 2030 and Oman Vision 2040. 

During the forum, Oman presented several working papers and presentations on key goods, partnerships, and strategic projects between the two countries. Saudi Arabia, in turn, outlined its investment system and the vital sectors driving economic diversification.

On the sidelines of the event, business-to-business meetings were held to explore opportunities for joint investments and trade partnerships, as well as ways to enhance bilateral trade exchange.