KAUST, NEOM partner to boost Saudi Arabia’s hydrogen economy plans

The Kingdom aims to generate 50 percent of its electricity from renewable sources by 2030 and establish itself as the leading global producer and supplier of hydrogen.
The Kingdom aims to generate 50 percent of its electricity from renewable sources by 2030 and establish itself as the leading global producer and supplier of hydrogen.
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Updated 25 August 2024
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KAUST, NEOM partner to boost Saudi Arabia’s hydrogen economy plans

KAUST, NEOM partner to boost Saudi Arabia’s hydrogen economy plans

JEDDAH: Saudi Arabia’s hydrogen economy is poised for growth as one of the country's leading universities partners with NEOM to advance economic development and strengthen the Kingdom's position as a leader in sustainable energy.

King Abdullah University of Science and Technology, NEOM’s Education, Research, and Innovation Foundation, and ENOWA have announced a partnership to bolster Saudi Arabia’s hydrogen economy, according to a statement from the research institute.

ERIF has sponsored three strategic projects under its Hydrogen and e-Fuels Applied Research Institute, in collaboration with KAUST researchers, to advance the development of hydrogen as a renewable energy vector.

The Kingdom aims to generate 50 percent of its electricity from renewable sources by 2030 and establish itself as the leading global producer and supplier of hydrogen. As part of its circular carbon economy framework, Saudi Arabia is committed to achieving net-zero carbon emissions by 2060. Consequently, the country’s plans for hydrogen production, including green hydrogen from renewable sources, are progressing rapidly.

KAUST said in its statement that progress on these projects was presented at a two-day summit recently held at its research and technology park with the participation of senior representatives from KAUST, ERIF, and HEFARI, as well as ENOWA, Imperial, Saudi Aramco, HyET, Cruise Saudi, Nxt7, and Dow. 

During the gathering, attendees discussed progress, challenges, and opportunities for developing the Kingdom’s green hydrogen economy.

Experts also provided insights on the cost-efficient production of green hydrogen and ammonia and their application in critical areas like sustainable aviation fuels and marine propulsion.

The meeting also covered electrolyzer development, including advancements in catalysts, membranes, manufacturing requirements, and transportation and storage needs.

KAUST noted that the three projects are led by a team of individuals, including William Roberts, a professor of mechanical engineering, who is working on carbon-neutral fuels for marine engines in response to new regulations to decarbonize maritime transport.

Mani Sarathy, a professor of chemical engineering, will focus on reducing the costs of large-scale electrolyzer technologies to enhance cleaner hydrogen production.

Meanwhile, Thibault Guiberti, assistant professor of mechanical engineering, is working on lowering undesirable emissions from engines and turbines that use green ammonia as fuel.

Donal Bradley, executive director of NEOM’s ERIF, commented on the partnership, saying that HEFARI is a key component of the NEOM’s research and innovation ecosystem, helping to advance the Kingdom’s green hydrogen economy.

“The alliance of ENOWA and ERIF with KAUST will help to make Saudi Arabia a formidable force in developing new technologies and processes for efficient hydrogen generation, storage and conversion into sustainable fuels,” Bradley said.

KAUST Vice President of Research Pierre Magistretti welcomed the funding and noted that the university is a leader in hydrogen research.

“This partnership with ENOWA and NEOM’s Research Institute is well positioned within the context of the new Center of Excellence on Renewables and Energy Storage, which will also have hydrogen-related research activities,” he said.

Roland Kaeppner, ENOWA’s managing director of hydrogen and green fuels, commented: “Working with NEOM’s ERI and KAUST is a natural progression for ENOWA.”

He added: “We already have the world’s largest green hydrogen production facility and offering our Hydrogen Innovation Development Center to KAUST and NEOM’s HEFARI means the Kingdom can continue to lead in hydrogen research.” 

Ben Queisser, head of technology and innovation, hydrogen and green fuels at ENOWA, said that the hydrogen innovation development center will not only support KAUST research but also the development of decarbonized synthetic fuels in collaboration with Saudi Aramco.

“It will also house a 20-megawatt electrolyzer from thyssenkrupp nucera, which will contribute to the world’s largest green hydrogen and ammonia plant operated by NEOM Green Hydrogen Co.,” Queisser said.


MENA private equity deals reach $5.9bn in H1, despite challenging conditions: PitchBook 

MENA private equity deals reach $5.9bn in H1, despite challenging conditions: PitchBook 
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MENA private equity deals reach $5.9bn in H1, despite challenging conditions: PitchBook 

MENA private equity deals reach $5.9bn in H1, despite challenging conditions: PitchBook 
  • Data highlights the impact of the “worst market conditions in the past two years”
  • Market heavily impacted by geopolitical conflicts, fluctuating oil prices

RIYADH: Private equity investments in the Middle East and North Africa reached $5.9 billion across 49 deals in the first half of 2024, despite challenging market conditions, according to a new report. 

The figures reflect a slowdown in deal activity compared to 2023, when $15.4 billion was deployed across 159 deals for the entire year, raising concerns about whether activity will rebound in the second half of 2024, according to the latest report by PitchBook. 

Private equity refers to investment funds that acquire ownership in mature companies, typically through buyouts, aiming to improve performance, restructure operations, or expand before eventually selling for profit. 

The data highlights the impact of what it describes as the “worst market conditions in the past two years” on private equity dealmaking in the region. 

In comparison with the last decade, where deal values surpassed $10 billion in five out of 10 years, the first half of 2024 represents a significant drop.

Historically, MENA private equity activity has often been driven by a few large, multibillion-dollar deals, and a similar pattern would be required in the second half of the year to match 2023’s performance. 

The report revealed that Saudi Arabia’s Public Investment Fund was the most active investor since 2018, reportedly investing in 36 deals. 

The Emirate’s Abu Dhabi Developmental Holding Co., also known as ADQ, came in second with 20 deals, followed by Jordan’s Al Arabi Investment Group with 19 transactions. 

Market conditions this year have been heavily impacted by a combination of geopolitical conflicts, fluctuating oil prices, and the threat of trade sanctions. 

The ongoing conflict between Israel and Gaza has not only caused immense humanitarian suffering but has also destabilized economies across the region. 

“The risk of escalation or a lengthy conflict creates difficult circumstances for economies. Alongside the humanitarian impacts, conflicts lead to substantial economic losses with potential spillovers to neighboring countries,” the report stated. 

Compounding these challenges are disruptions in trade and oil production. Earlier this year, attacks on ships in the Red Sea prompted shifts in trade routes and contributed to a reduction in oil output, amplifying volatility in oil prices — a key factor for MENA economies

As energy exports represent a significant portion of revenue for many countries in the region, any reduction in oil production heightens fiscal pressures and affects broader economic stability, the report explained. 

These market headwinds are making it increasingly difficult for private equity investments to gain traction, as businesses navigate both operational risks and broader economic uncertainty. 

Saudi Arabia’s sovereign wealth fund has been an active investor in across the MENA region. File

PE digest 

A significant private equity deal in the first half of 2024 was CVC Capital Partners’ $3.3 billion sale of GEMS Education to Brookfield. 

GEMS Education, a Dubai-based private school provider with over 60 years of operation, is expected to welcome more than 140,000 students across 46 schools in the UAE and Qatar by September. 

“Education has been a key consideration in MENA, and attempts to improve it have been a priority. Initiatives including strengthening education funds, revamping programs, focusing on STEM (science, technology, engineering, and mathematics) skills, and the implementation of virtual education due to the COVID-19 pandemic have been part of the plans,” the report said. 

The healthcare sector in the MENA region is poised for significant growth in the coming years, driven by increasing demand and substantial investments. 

A major deal this year was Gulf Islamic Investments’ $164.6 million investment in Saudi-based health care provider Abeer Group.

As part of its Vision 2030, the Kingdom plans to invest over $65 billion in healthcare infrastructure, with projects including 20,000 new hospital beds and 224 health care centers valued at $12.8 billion. 

GEMS Education is a Dubai-based private school provider with over 60 years of operation. Supplied

The UAE is also advancing healthcare development, with approximately 700 projects worth a combined $60.9 billion, largely driven by the private sector. Public-private partnerships are expected to play a key role in the sector’s growth. 

Qatar has introduced a PPP law to encourage international investment, while Oman has initiated its first medical city through the same arrangement. 

Additionally, mandatory health insurance policies are becoming increasingly common across the Gulf Cooperation Council, leading to higher patient numbers. 

“Strong demand for healthcare fueled by increasing and aging populations in the MENA region is anticipated to drive up government and private investor spending in the sector. A large pipeline of projects as well as new technologies will create opportunities for startups, portfolio companies, and investors,” the report added. 

MENA exits 

Private equity and venture capital-backed exit activity saw a sharp decline in the first half of 2024, with only $1.6 billion generated from 25 exits. 

This marks a significant drop compared to the previous four years, where annual exit values consistently surpassed $10 billion. 

The report stated that the current figures underscore a notable slowdown in exit activity within the MENA region, reflecting broader global trends in 2024. 

Investors and management teams have been hesitant to pursue exits amid market volatility, influenced by fluctuations in public markets, inflationary pressures, and rising interest rates, which have dampened growth prospects. 

With interest rate hikes largely on pause and potential rate cuts expected in Europe and the US later this year, there is cautious optimism for a recovery in the second half of the year. 

The easing of monetary policy could help stabilize market conditions and create more favorable opportunities for exits. 

VC’s role in PE 

The MENA venture capital ecosystem experienced weaker capital deployment in the first half of the year, mirroring global trends. 

A total of $1.3 billion was invested across 321 VC rounds, putting the region on track to fall short of 2023 levels by year-end.

 This follows a decline in 2023, when activity in the sector dropped from a peak of $5.5 billion across 894 deals in 2022. 

“The MENA region has been earmarked for high growth and untapped opportunities, but it has not been insulated from the broader slump in activity felt by more mature ecosystems,” the report said. 

Sluggish economic growth, geopolitical tensions, and inflationary pressures have dampened market confidence, contributing to the overall slowdown in VC activity.


Oil Updates – crude extends recovery to cap volatile week

Oil Updates – crude extends recovery to cap volatile week
Updated 13 September 2024
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Oil Updates – crude extends recovery to cap volatile week

Oil Updates – crude extends recovery to cap volatile week

NEW YORK/SINGAPORE: Oil prices rose on Friday, extending a rally sparked by output disruptions in the US Gulf of Mexico, where Hurricane Francine forced producers to evacuate platforms before it hit the coast of Louisiana.

Brent crude futures rose by 34 cents, or 0.5 percent, to $72.31 per barrel by 6:22 a.m. Saudi time. US West Texas Intermediate crude futures rose by 39 cents, or 0.6 percent, to $69.36 a barrel.

If those gains hold, both benchmarks will break a streak of weekly declines, despite a rough start that saw Brent crude dip below $70 a barrel on Tuesday for the first time since late 2021. At current levels, Brent is set for a weekly increase of about 1.7 percent, and WTI is set to gain over 2 percent.

“A previous dip to an almost three-year low called for some near-term breather to end the week, as market participants price (in) for the disruptions to short-term oil supplies caused by Hurricane Francine,” said IG market strategist Yeap Jun Rong in an email.

Oil producers assessed damage and conducted safety checks on Thursday as they prepared to resume operations in the US Gulf of Mexico, as estimates emerged of the loss of supply from Francine.

UBS analysts forecast output in the region in September will fall by 50,000 barrels-per-day month over month, while FGE analysts estimated a 60,000 bpd drop to 1.69 million bpd.

Official data showed nearly 42 percent of the region’s oil output was shut-in as of Thursday.

“But if production delays were to prove to be short-lived and damages to oil platforms were to be minimal, those gains may be unwound, as the broader demand outlook continues to serve as a key headwind to limit any sustained recovery,” Yeap said.

Demand expectations remained dismal as both OPEC and the International Energy Agency this week lowered their demand growth forecasts, citing economic struggles in China, the world’s largest oil importer.

“The recent run of weaker Chinese economic data suggests that oil demand in the world’s second-largest economy may remain subdued for longer, while demand has been soft in other countries outside of China as well,” said IG’s Yeap.

China’s crude oil imports averaged 3.1 percent lower this year from January through August compared to the same period last year, customs data showed on Tuesday.

“Flagging domestic oil demand in China has become a hot topic and was further underlined by disappointing August trade data,” FGE analysts said in a note to clients.

Demand concerns have grown in the US as well. US gasoline and distillate futures traded at multi-year lows this week, as analysts highlighted weaker-than-expected demand in the top petroleum consuming country.

US oil and fuel stocks rose last week as demand declined sharply, data from the US Energy Information Administration showed on Wednesday. 


IMF board to discuss Pakistan’s $7 bln bailout on Sept 25 as PM hails friendly states for support

IMF board to discuss Pakistan’s $7 bln bailout on Sept 25 as PM hails friendly states for support
Updated 12 September 2024
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IMF board to discuss Pakistan’s $7 bln bailout on Sept 25 as PM hails friendly states for support

IMF board to discuss Pakistan’s $7 bln bailout on Sept 25 as PM hails friendly states for support
  • The South Asian country reached a staff-level agreement with the global lender in July, but approval for the 37-month program has been pending since then
  • Pakistan’s last $3 billion IMF program helped avert a sovereign default last year, amid a decline in foreign exchange reserves and local currency devaluation

ISLAMABAD: The International Monetary Fund (IMF) executive board will meet on September 25 to discuss a $7 billion program agreed with Pakistan this year, an IMF spokesperson said on Thursday, as Prime Minister Shehbaz Sharif appreciated “friendly” countries for their support in meeting the lender’s requirements.

The South Asian country reached a staff-level agreement with the global lender in July, but the IMF board’s approval for the 37-month program has been pending since then.

Pakistan’s last $3 billion IMF program helped avert a sovereign default last year, amid a decline in foreign exchange reserves to critical levels, currency devaluation and record inflation.

“The board meeting is scheduled to take place on September 25 and this is following Pakistan obtaining necessary financing assurances from its development partners,” IMF spokesperson Julie Kozack said in a press briefing.

The development came hours after Prime Minister Shehbaz Sharif appreciated “friendly” countries for helping Pakistan meet requirements necessary to secure the IMF bailout.

“I’d like to say that our friendly and brotherly countries have supported us and have come all the way,” Sharif said on Thursday, while addressing a federal cabinet meeting.

The premier avoided delving into details and said the incumbent government was focusing on the commitments made with the IMF.

“For now, it would be fine to say that the finance minister, other government institutions and our ambassador in China have worked hard together for this,” he said.

Islamabad has for years relied on China, Saudi Arabia and the United Arab Emirates for financial assistance to meet external financing requirements and avoid sovereign default, which it came close to last summer.

Pakistan’s sovereign dollar bonds rallied on Thursday afternoon, with the 2031 maturity trading 1 cent higher to bid at 79.93 cents on the dollar, according to Tradeweb data.

Sharif said Pakistan’s economy would greatly benefit if the monetary policy rate also reached single digits like the inflation rate, highlighting that the dialogue with the IMF was moving ahead in a “good manner.”

PM Sharif said Pakistan will take decisions regarding the growth rate once the program is finalized.

Pakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958. The latest economic crisis has been the most prolonged and has seen the highest-ever levels of inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.

The conditions of the fresh IMF bailout have become tougher such as higher taxes on farm incomes and electricity prices. The bailout is aimed at cementing stability and inclusive growth in the crisis-plagued South Asian country.


Closing Bell: Saudi main index ends higher at 11,842.55

Closing Bell: Saudi main index ends higher at 11,842.55
Updated 12 September 2024
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Closing Bell: Saudi main index ends higher at 11,842.55

Closing Bell: Saudi main index ends higher at 11,842.55
  • Parallel market Nomu increased by 170.05 points, or 0.66%, closing at 25,934.60
  • MSCI Tadawul Index climbed, adding 8.32 points, or 0.57%, to end at 1,471.48

RIYADH: Saudi Arabia’s Tadawul All Share Index reversed this week’s trend, rising by 76.15 points, or 0.65 percent, to close at 11,842.55 on Thursday. 

Total trading turnover reached SR6.49 billion ($1.72 billion), with 154 stocks advancing and 72 declining. 

The Kingdom’s parallel market Nomu increased by 170.05 points, or 0.66 percent, closing at 25,934.60. The session saw 43 stocks advance and 25 decline. 

The MSCI Tadawul Index also climbed, adding 8.32 points, or 0.57 percent, to end at 1,471.48. 

Top performer Rasan Information Technology Co. saw its share price jump 6.90 percent to SR57.30. Nayifat Finance Co. and Zamil Industrial Investment Co. also performed well, with share price increases of 5.66 percent and 5.43 percent, respectively. 

Al-Baha Investment and Development Co. was the worst performer, with its share price falling 5.26 percent to SR0.18. 

Saudi Fisheries Co. and Jamjoom Pharmaceuticals Factory Co. also faced declines of 3.68 percent and 3.58 percent, reaching SR23.06 and SR183.20, respectively.

In Nomu, ASG Plastic Factory Co. led with an 8.51 percent rise, closing at SR51.00. Alhasoob Co. and Alqemam for Computer Systems Co. also saw gains, with share prices up 8.17 percent and 7.10 percent, respectively. 

The worst performer in Nomu was the Arabian Food and Dairy Factories Co., with a 3.61 percent drop to SR72. 

Edarat Communication and Information Technology Co. and Osool and Bakheet Investment Co. also fell by 3.46 percent and 3.12 percent, respectively. 

On the announcement front, Rabigh Refining and Petrochemical Co. reported a reduction in its accumulated losses to 36.16 percent of its SR16,710 million share capital by Aug. 31, down from 53.09 percent as of June 30. This equates to SR6.04 billion. 

The decrease was achieved by waiving SR1.88 billion each in loans by the founding shareholders, the Saudi Arabian Oil Co. and Sumitomo Chemical Co. Ltd., and the associated accrued commissions. 

Saudi Industrial Development Co. announced that its subsidiary, Global Marketing Co. for Sleeping System, known as Sleep High, plans to issue Murabaha sukuk valued at SR10 million. 

In a statement to Tadawul, the company announced that the sukuk will be available for purchase via Sukuk Capital’s website. Sukuk Capital is authorized by the Capital Market Authority to issue and invest in debt instruments. 


Bloom Consulting opens its first Middle East office in Saudi Arabia

Bloom Consulting opens its first Middle East office in Saudi Arabia
Updated 12 September 2024
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Bloom Consulting opens its first Middle East office in Saudi Arabia

Bloom Consulting opens its first Middle East office in Saudi Arabia
  • Move aims to create branding strategies that drive economic progression and enhance global competitiveness
  • Regional headquarters initiative has seen over 120 companies set up their Middle East bases in Riyadh this year

JEDDAH: Madrid-based Bloom Consulting has opened its first Middle East office in Saudi Arabia, partnering with Destination Consultancy to help cities and regions improve economic growth. 

In a statement, the company said that the move aims to assist in creating branding strategies that drive economic progression and enhance global competitiveness.

Bloom Consulting collaborates with global partners, amassing extensive experience in nation and place branding as well as placemaking. This includes its 2020 collaboration with the Royal Commission for Riyadh City to develop and implement the Riyadh City Brand strategy.

The office opening is the latest example of a firm establishing a presence in the Kingdom, following the regional headquarters initiative which has seen over 120 companies set up their Middle East bases in Saudi Arabia’s capital in 2024.

Bloom Consulting said that with the Kingdom undergoing significant transformation as part of Vision 2030, the need for robust place branding and strategic economic positioning has never been more critical.

Jose Filipe Torres, CEO of Bloom Consulting, stated that their partnership with Destination Consultancy, which exclusively represents their company, marks a significant milestone in their dedication to supporting Saudi Arabia’s economic aspirations.

“We believe that every place has a unique story to tell, and by harnessing that narrative, we can help regions attract investment, boost tourism, and ultimately enhance the quality of life for their residents.”

Iman Hajjed Al-Mutairi, founder and CEO of Destination Consultancy and managing partner at Bloom Consulting, stated: “We are thrilled to exclusively represent Bloom Consulting to bring cutting-edge Place Branding strategies to Saudi Arabia.”

Al-Mutairi, who has served as the executive director of destination branding, marketing, communication, and sales at Soudah Development Co. for nearly three years, emphasized that the economic growth of cities begins with a strong place brand.

“We will work together toward creating a vibrant and sustainable future for our cities and communities,” she said.

Destination Consultancy is a Saudi partner in strategic marketing and communication consulting focused on enhancing the economic viability and attractiveness of places with a commitment to driving impactful change.

In 2022, Brand South Africa chose Bloom Consulting for a project focused on assessing the country’s global reputation and providing strategic advice on brand management, while in the following year the firm worked with Essential Costa Rica to define Vision 2035 for the nation’s brand, incorporating new sustainability dynamics.