Lack of freshwater, sanitation hindering human capital development, Saudi minister warns
Saudi Arabia has demonstrated a strong commitment to addressing global water issues and advancing sustainable solutions
Updated 23 July 2024
Arab News
RIYADH: Inadequate freshwater and sanitation services are hindering human capital development, warned the Saudi Minister of Economy and Planning at the G20 Development Ministerial Meeting.
Faisal Al-Ibrahim made the comments during the “Ensuring Access to Water and Sanitation” session on the sidelines of the event, which is being held from July 22 to 24 in Rio de Janeiro, Brazil.
“Water inaccessibility places significant constraints on agriculture, impacting global food security and leading to increased human conflict due to scarcity in resources,” Al-Ibrahim said.
Saudi Arabia has demonstrated a strong commitment to addressing global water issues and advancing sustainable solutions. In September 2023, Crown Prince Mohammed bin Salman announced the establishment of the Riyadh-based Global Water Organization to bolster efforts in tackling water challenges.
Highlights from Minister of Economy and Planning’s speech during the ‘Ensuring Access to Water and Sanitation’ session at the #G20 Development Ministerial Meeting in Rio de Janeiro, Brazil. pic.twitter.com/CkuAHuQXNy
Al-Ibrahim said the freshwater shortage is not merely a policy concern, adding: “It is a basic human right that reflects the importance of the Sustainable Development Goals. Our current efforts to address water accessibility are impeded by fragmented and isolated initiatives.”
The minister noted that the implementation of best practices varies significantly across countries, partnerships to foster innovation through research and development are limited, and more funding is needed to support the necessary project pipeline.
Highlighting the Saudi initiative to establish the Global Water Organization, Al-Ibrahim said the body will serve as the much-needed platform for international collaboration, leveraging the country’s collective strengths to better support one another.
Minister of Economy and Planning and Mathias Cormann, Secretary-General of the OECD, discuss the latest global and regional economic developments and further enhancing collaboration between Saudi Arabia and the @OECD, on the sidelines of the G20 Development Ministerial Meeting in… pic.twitter.com/N50tRJ3AOX
“It will facilitate knowledge exchange and technical assistance so that best practices are not confined to specific regions but can promptly be disseminated to those who need it most,” he said.
The minister concluded: “Collectively, we need to elevate water issues within the G20 framework, continue the annual Water Dialogue started by the Saudi Presidency in 2020, and leverage the GWO as a platform to put us on track to ensure universal access to water and sanitation.”
On the first day of the ministerial meeting, Al-Ibrahim met with high-level officials from G20 countries and international organizations. He also participated in the session of the Development Working Group, which is the primary coordinator for all G20 actions aimed at achieving the 2030 Agenda for Sustainable Development.
Minister of Economy and Planning and Mauro Vieira, Brazil’s Minister of Foreign Affairs, discuss the Brazilian #G20 Presidency and its agenda, bilateral relations and opportunities to strengthen collaboration between the Kingdom and Brazil in various sectors including… pic.twitter.com/JhLb9VvLWZ
The minister also held talks with Mathias Cormann, secretary-general of the Organization for Economic Cooperation and Development.
The two sides discussed the latest global and regional economic developments and ways to further enhance collaboration between Saudi Arabia and the international organization. This association works closely with policymakers, stakeholders, and citizens to establish evidence-based international standards and find solutions to social, economic, and environmental challenges.
Minister of Economy and Planning meets with Dr. Mohamad Maliki Osman, Minister in the Prime Minister’s Office, Second Minister for Education, and Second Minister for Foreign Affairs of Singapore, to discuss strengthening bilateral relations and explore potential areas of… pic.twitter.com/05TV7LsTeM
He also met with Mohamad Maliki bin Osman, a minister in Singapore’s prime minister’s office and second minister for both education and foreign affairs. They discussed strengthening bilateral relations and explored potential areas of collaboration between the two countries in industry, education, investment, and finance.
On July 23, Al-Ibrahim held talks with Mauro Vieira, Brazil’s minister of foreign affairs. The discussion covered the Brazilian G20 presidency and its agenda, as well as opportunities to enhance collaboration between the Kingdom and Brazil in sectors such as infrastructure, agribusiness, renewable energy, and other areas of mutual interest.
Saudi banks shift focus to debt markets during sukuk surge
Updated 21 March 2025
Reem Walid
RIYADH: As Saudi Arabia’s financial system turns increasingly to debt markets for funding, it will face new opportunities and increased risk in relation to its stability and resilience, experts told Arab News.
The growth of sukuk issuance and other debt market activities are essential to the Kingdom’s economic diversification targets and objectives set out in the Vision 2030 initiative.
Saudi Arabia raised SR2.64 billion ($704 million) through sukuk issuances in March, following the SR3.07 billion secured in February and SR3.72 billion in January.
A report by Fitch Ratings in February showed that the Kingdom holds the largest share of the Gulf Cooperation Council’s debt capital market — which itself surpassed the $1 trillion milestone at the end of January.
This represented a 10 percent year-on-year growth across all currencies.
Another report by Fitch earlier this year showed that Saudi Arabia became the largest dollar-denominated debt issuer in emerging markets — outside China — and the world’s largest sukuk issuer in 2024.
The Kingdom’s debt capital market grew by 20 percent year on year in 2024, reaching $432.5 billion in outstanding debt.
Funding uses
Saudi Arabia uses sukuk issuance as a mechanism to finance giga-projects such as NEOM, the Red Sea, and Qiddiya, which collectively require hundreds of billions of dollars in funding.
Ian Khan, a technology futurist and author, said this highlights the Kingdom’s commitment to Islamic finance as a driver of sustainable development.
“Sukuk aligns with Vision 2030 by attracting both domestic and international ethical investors, particularly from markets in Southeast Asia, the Middle East, and North Africa. Additionally, sukuk’s structure, which ties returns to tangible assets, ensures that funds are channeled into real economic activities such as renewable energy, infrastructure, and technology, all of which are cornerstones of Saudi Arabia’s diversification agenda,” Khan said.
Ian Khan, a technology futurist and author. Supplied
“Furthermore, by developing its domestic sukuk market, the Kingdom reduces its dependence on oil revenues, which currently account for over 50 percent of GDP,” he said.
Khan emphasized that sukuk also supports green finance initiatives, with Saudi entities already issuing green sukuk to fund renewable projects such as the 300 MW Sakaka Solar Project.
Risks and rewards
According to Mohammad Nikkar, principal at Arthur D. Little Middle East, reports published by the Kingdom’s central bank highlight the capitalization strength of the Saudi banking system.
“However, an overreliance on external funding such as debt markets could potentially weaken the credit quality of the banking system, highlighting the need for more prudent risk management,” he said.
There is no doubt that as the focus shifts toward debt markets, new dynamics and opportunities emerge.
“As the sector progresses toward 2030 and beyond, the increasing reliance on debt markets necessitates continued regulatory vigilance and the implementation of robust risk management practices to maintain overall stability and resilience,” Nikkar said.
Mohammad Nikkar, principal at Arthur D. Little Middle East. Supplied
Khan said that the Kingdom’s sovereign bond issuances have been met with strong global demand, with oversubscriptions often exceeding several billion dollars, reflecting investor confidence in the country’s economic reforms.
“However, the increasing exposure to external debt introduces risks, particularly if global interest rates rise or oil revenues fluctuate significantly,” he said.
The author went on to emphasize that to address these challenges, the Saudi Central Bank is likely to strengthen regulatory frameworks and risk buffers, ensuring that banks maintain adequate capital and manage foreign currency risks effectively.
According to Edmond Christou and Basel Al-Waqayan, analysts at Bloomberg Intelligence, the increasing reliance on debt markets will improve the resilience of Saudi Arabia’s banking sector by diversifying funding sources and providing more stable capital to support long-term project financing.
“With banks managing significant duration and liquidity risks, stable funding is critical for driving growth in key sectors aligned with Vision 2030. Senior unsecured paper, for instance, are issued at an average spread of 90 basis points above benchmark treasuries, while subordinated AT1 bonds range between 150–200 basis points,” the analysts told Arab News in a joint statement.
“In 2024, Saudi banks raised approximately $11.5 billion in debt markets, and they are on track to exceed that figure as they continue to finance major projects,” they added.
Martin Blechta, partner at Boston Consulting Group, explained that some of the largest and most recent issuances were done by AlRajhi Bank, Riyad Bank, and Banque Saudi Fransi, as well as Arab National Bank, Saudi Investment Bank, and Gulf International Bank, among others. For some, this was a first-time issuance.
“The increasing reliance on the debt market is an expected progression of the banking sector overall and very much on the strategic agenda of the Saudi Capital Market Authority aiming to expand the debt instrument market,” Blechta said.
“Additional Tier 1 capital plays an important role in the capital structure of leading international banks and the recent developments in the Saudi banking sector are very much in line with that.”
Vision 2030 alignment
From ADL’s point of view, Nikkar explained that by fostering a robust debt capital market, the Kingdom enables growth of alternative sources of funding — a pillar of its National Investment Strategy and aligned with Pillar 1 of the Financial Services Development Program.
The ADL partner added: “This expansion not only opens the country to more investments from international investors but also provides new opportunities for domestic investors to participate in the investment drive fueled by the country’s unprecedented infrastructure and flagship projects within Vision 2030.”
Christou and Al-Waqayan from Bloomberg Intelligence argued that growing focus on sukuk issuance and debt market activities is pivotal to support Saudi Vision 2030’s objectives of economic diversification and sustainable growth.
“A deeper and more developed local capital market attracts foreign investment flows, which are critical to supporting the Kingdom’s expanding economy. Initiatives such as last year’s Saudi ETF listing in Hong Kong and China, as well as the Lenovo deal are key to attract international capital,” the analysts said.
Blechta from BCG noted that banks are diversifying funding sources to match the changing nature of government and large corporate financing needs.
“The majority of large-scale projects are in need of very long-term debt that is typically USD-denominated, to increase international investor demand. Banks are accordingly matching this demand on their funding side. Interestingly, most recent Saudi bank debt issuances were heavily oversubscribed, which shows strong investor confidence in the Saudi banking sector overall,” the partner said.
“However, most demand for the SAR denomination was still domestic, while the USD titles have seen more international investor uptake,” he added.
Martin Blechta, partner at Boston Consulting Group. Supplied
Transformative effects on the Kingdom’s financial landscape
The accelerating trend of Saudi banks looking toward debt markets is set to transform the Kingdom’s financial landscape,
From ADL’s perspective, Nikkar believes that this shift is likely to deepen the capital markets, enhance liquidity, and introduce a wider array of financial instruments to market participants, thereby attracting a more diverse group of investors.
“The Saudi debt capital market is poised to exceed SR2 trillion outstanding over the next few years, driven by government projects under Vision 2030, deficit funding, diversification efforts, and ongoing reforms,” he said.
“This substantial growth indicates a maturing financial market capable of supporting large-scale economic initiatives. Collectively these developments will foster a more dynamic and diversified financial services ecosystem in Saudi Arabia,” the ADL representative added.
Additionally, the accelerated shift of Saudi banks toward debt markets will fundamentally transform the Kingdom’s financial landscape by enabling greater sophistication, resilience, and competitiveness.
From Khan’s point of view, Saudi banks hold an average capital adequacy ratio that provides a strong foundation for leveraging debt markets without compromising financial stability.
The shift coincides with the Kingdom’s efforts to develop the domestic capital markets, as evidenced by initiatives such as the Saudi Stock Exchange reforms and the Financial Sector Development Program.
Khan believes this trend is likely to have a transformative effect on the expansion of debt market instruments.
“Saudi banks are increasingly involved in issuing corporate bonds, sukuk, and hybrid instruments to diversify their funding sources. This diversification reduces reliance on short-term deposits, thereby enhancing long-term stability,” Khan said.
The trend will also lead to greater integration with global markets, technology and innovation in finance, and enhanced environmental, social and governance alignment.
On integration with global markets, Khan said: “Participation in international debt markets has already attracted significant foreign investments. For instance, Saudi Arabia’s $10 billion green bond issued in 2023 was oversubscribed threefold, reflecting investor confidence. This global integration will help Saudi banks build stronger partnerships and access lower-cost capital.”
With regards to technology and innovation in finance, he believes the way debt instruments are issued and traded will be transformed, saying: “The Kingdom is embracing fintech to streamline debt market activities. For example, digital sukuk issuance platforms and blockchain-based systems are being explored to enhance transparency and efficiency.”
Khan added: “The rise of ESG-focused investments, particularly green bonds and sukuk, will push Saudi banks to prioritize sustainable finance. This aligns with Vision 2030 goals of achieving net-zero emissions by 2060 and attracting investors who prioritize sustainability.”
Bhavya Kumar, managing director and partner at BCG, believes that an increasing reliance on debt markets presents opportunities and risks for the Kingdom’s banking sector.
“While it supports Saudi’s broader economic goals under Vision 2030 by diversifying funding sources — reducing dependency on deposits, improving risk management practices required to meet international investor expectations, and fostering financial market development — it also introduces vulnerabilities related to market volatility, leverage, and systemic risks,” Kumar said.
Gold retreats on firm US dollar, en route third weekly gain
Gold hit record high of $3,057.21 per ounce on Thursday
Silver, platinum, palladium poised for weekly declines
Updated 21 March 2025
Reuters
BENGALURU: Gold prices retreated on Friday as the dollar firmed and investors booked profits after bullion hit three successive all-time peaks this week, buoyed by safe-haven demand amid trade war concerns and hopes of a rate cut by the Federal Reserve later this year.
Spot gold was down 0.4 percent to $3,033.36 an ounce as of 11:48 a.m. Saudi time. US gold futures eased 0.1 percent to $3,039.60.
Bullion was on track for a third straight weekly gain, having added 1.6 percent so far this week. It hit an all-time high of $3,057.21 per ounce on Thursday.
“Spot gold is seeing a healthy pullback after surging to fresh record highs above $3k, with the dollar’s recent resilience also prompting gold to ease lower,” said Han Tan, Exinity Group’s chief market analyst.
The US dollar was up 0.2 percent on Friday making greenback priced bullion more expensive for overseas buyers.
“Gold’s uptrend is set to remain intact as long as risk-on sentiment fails to find its grip, especially as the April 2 deadline draws near for the next wave of US tariffs,” Tan said.
US President Donald Trump still intends for new reciprocal tariff rates to take effect on that date.
A whirlwind of factors, including geopolitical tensions and economic uncertainty, have propelled gold to 16 record highs, with four above the crucial $3,000 mark.
“ETP (Exchange Traded Products) demand could continue to lead gold prices higher, even in the face of weakening physical demand across India and China,” said Standard Chartered analyst Suki Cooper in a note dated Thursday.
Gold, traditionally viewed as a safe-haven investment during times of inflation or economic volatility, tends to do well in a low-interest rate environment.
The Fed held its benchmark rate steady as expected on Wednesday. Policymakers see the central bank delivering two quarter-percentage-point cuts by year-end.
Spot silver slid 1.5 percent to $33.04 an ounce, platinum lost 0.4 percent to $981.05, and palladium shed 0.4 percent to $948.43. All three were poised for weekly losses.
Oil Updates — crude heads toward 2nd consecutive weekly gain on supply concerns
Updated 21 March 2025
Reuters
LONDON: Oil prices rose on Friday and were heading for a second consecutive weekly gain as fresh US sanctions on Iran and the latest output plan from the OPEC+ producer group raised expectations of tighter supply.
Brent crude futures were up 12 cents, or 0.2 percent, at $72.12 a barrel by 11:50 a.m. Saudi time. US West Texas Intermediate crude futures rose 15 cents, also 0.2 percent, to $68.22.
On a weekly basis, both Brent and WTI were on track for gains of more than 1 percent, their biggest since the first week of the year.
The US Treasury on Thursday announced new Iran-related sanctions, which for the first time targeted an independent Chinese refiner among other entities and vessels involved in supplying Iranian crude oil to China.
New US sanctions against Iran’s oil exports triggered Thursday’s rally in oil prices along with the OPEC+ pledge to compensate for overproduction, said PVM analyst Tamas Varga.
Thursday’s announcement marked Washington’s fourth round of sanctions against Iran since US President Donald Trump in February promised “maximum pressure” on Tehran and pledged to drive the country’s oil exports to zero.
Analysts at ANZ Bank said they expect a 1 million barrels per day (bpd) reduction in Iranian crude oil exports because of tighter sanctions. Vessel tracking service Kpler estimated Iranian crude oil exports above 1.8 million bpd in February.
Oil prices were also supported by the new OPEC+ plan for seven members to cut output further to compensate for producing more than agreed levels. The plan would represent monthly cuts of between 189,000 bpd and 435,000 bpd until June 2026.
OPEC+ this month confirmed that eight of its members would proceed with a monthly increase of 138,000 bpd from April, reversing some of the 5.85 million bpd of output cuts agreed in a series of steps since 2022 to support the market.
“While the group shares a plan for compensation cuts, it certainly doesn’t mean members will follow it. A handful of members have consistently produced above their target production levels,” ING analysts said in a note on Friday.
Closing Bell: Saudi main index closes in green at 11,760
Updated 20 March 2025
Miguel Hadchity
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 50.89 points, or 0.43 percent, to close at 11,760.32.
The total trading turnover of the benchmark index was SR5.89 billion ($1.57 billion), as 123 of the listed stocks advanced, while 109 retreated.
The MSCI Tadawul Index increased by 6.13 points, or 0.41 percent, to close at 1,490.20.
The Kingdom’s parallel market Nomu dipped, losing 162.11 points, or 0.53 percent, to close at 30,521.53. This comes as 43 of the listed stocks advanced while 31 retreated.
The best-performing stock was Rabigh Refining and Petrochemical Co., with its share price surging by 9.87 percent to SR7.68.
Other top performers included Retal Urban Development Co., which saw its share price rise by 4.96 percent to SR16.50, and Ades Holding Co., which saw a 4.38 percent increase to SR16.70.
The worst performer of the day was Sinad Holding Co., whose share price fell by 6.91 percent to SR12.40.
Gulf General Cooperative Insurance Co. and SICO Saudi REIT Fund also saw declines, with their shares dropping by 6.19 percent and 5.18 percent to SR9.55 and SR3.66, respectively.
On the announcements front, Amwaj International Co. announced its financial results for 2024, with net profits reaching SR6.3 million, down by 60.1 percent compared to the previous year.
In a statement on Tadawul, the company attributed the decrease to restructuring inventory and marketing mix to accommodate new technology, which has a higher demand level and profit margin than before.
“The addition of new products will positively impact sales and results for 2025 and will boost cash flow,” the statement said.
In another announcement, Gulf General Cooperative Insurance Co. revealed its annual financial results for 2024.
The company’s insurance revenues in 2024 reached SR414.3 million, up from SR315.6 million in the previous year, marking a 31.2 percent surge.
This was principally driven by business growth and an increase in the motor line of business, according to a statement by the firm.
In today’s trading session, the group’s shares traded 6.19 percent lower on the main market to close at SR9.55.
Saudi Printing and Packaging Co. also announced its annual financial results for last year.
The company’s net loss surged to SR219.4 million from SR132.3 million in the previous year due to establishing a provision for credit losses in trade receivables and recording impairment in fixed assets, inventory, and goodwill.
In Thursday’s session, the firm’s shares traded 2.43 percent lower on the main market to close at SR10.42.
On another note, Saudi Industrial Investment Group has announced that its board of directors has recommended a share buyback of up to 11 million ordinary shares, subject to approval by the Extraordinary General Assembly.
In a statement on Tadawul, the group said that the buyback aims to hold 10 million shares as treasury while allocating 1 million shares to the company’s long-term employee incentives program.
The repurchase will be financed through internal resources, and the acquired shares will not carry voting rights in General Assembly meetings.
SIIG will comply with regulatory solvency requirements, with a solvency report from external auditors to be included in the EGA approval process.
In today’s trading session, SIIG’s shares traded 1.72 percent higher on the main market to close at SR15.36.
Saudi Aramco unveils direct air capture tech to reduce emissions
Updated 20 March 2025
MOHAMMED AL-KINANI
JEDDAH: Saudi Aramco has unveiled the Kingdom’s first direct air capture test unit, marking a significant milestone in its mission to reduce emissions and advance carbon capture technology for a sustainable future.
The unit is capable of removing 12 tonnes of carbon dioxide from the atmosphere each year, according to an official statement from Aramco.
As the world’s leading integrated energy and chemicals company, Aramco emphasized that the pilot plant, developed in partnership with Siemens Energy, represents a crucial step in enhancing DAC capabilities.
Ali A. Al-Meshari, Aramco’s senior vice president of technology oversight and coordination, highlighted that direct carbon dioxide capture technologies will play a pivotal role in mitigating greenhouse gas emissions, particularly in industries that are difficult to decarbonize.
“The test facility launched by Aramco is a key step in our efforts to scale up viable DAC systems, for deployment in the Kingdom of Saudi Arabia and beyond. In addition to helping address emissions, the CO2 extracted through this process can in turn be used to produce more sustainable chemicals and fuels.” Al-Meshari said.
The development is in line with Saudi Arabia’s commitment to achieving net-zero emissions by 2060, following a circular carbon economy approach that emphasizes reducing, reusing, recycling, and removing carbon.
This initiative also supports the Saudi Green Initiative, which aims to reduce carbon emissions by 278 million tonnes annually by 2030 and transition 50 percent of the country’s energy sources to renewables.
The project reflects Aramco’s strong commitment to carbon capture, a critical component of its goal to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned and operated assets by 2050.
Aramco plans to use the new facility as a testing ground for next-generation CO2 capture materials specifically designed for Saudi Arabia’s unique climate. Additionally, the company aims to drive down costs, promoting the quicker adoption of DAC technologies in the region.
As part of its circular carbon economy strategy, Aramco is exploring methods for capturing CO2 both at emission sources and directly from the atmosphere, incorporating cutting-edge technological solutions, as stated in the company’s announcement.
In partnership with Siemens Energy, Aramco intends to scale up the technology and lay the groundwork for large-scale DAC facilities in the future.
Furthermore, the DAC test facility launch comes shortly after Aramco, along with its partners Linde and SLB, signed a shareholders’ agreement to develop a carbon capture and storage hub in Jubail. Phase one of the hub will have the capacity to capture 9 million tonnes of CO2 from three Aramco gas plants and other industrial sources.
In October 2023, Saudi Aramco announced its collaboration with major international companies to develop emissions reduction solutions, including lower-carbon hydrogen, direct air capture of CO2, and an innovative approach to CO2 storage.
