Saudi Arabia’s bold recycling plan will see it become a world-leader, experts believe

Saudi Arabia’s bold recycling plan will see it become a world-leader, experts believe
Saudi Arabia is seeking to make the most of the industry. Shutterstock
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Updated 16 September 2024
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Saudi Arabia’s bold recycling plan will see it become a world-leader, experts believe

Saudi Arabia’s bold recycling plan will see it become a world-leader, experts believe
  • This initiative is anticipated to contribute approximately SR120 billion ($31.99 billion) to Saudi Arabia’s gross domestic product

RIYADH: In an era marked by growing environmental concerns and the pursuit of sustainable development, recycling has emerged as a crucial driver of economic prosperity for countries worldwide.

Beyond its environmental benefits, recycling holds significant economic advantages, fostering job creation, stimulating local industries, and bolstering long-term economic stability.

Saudi Arabia is seeking to make the most of this industry, and in January the Kingdom’s Ministry of Environment announced a comprehensive plan to recycle a significant portion – up to 95 percent – of the country’s waste. 

This initiative is anticipated to contribute approximately SR120 billion ($31.99 billion) to Saudi Arabia’s gross domestic product, and aims to generate over 100,000 employment opportunities for the Kingdom’s nationals. 

When fully implemented, the plan will see the recycling of around 100 million tonnes of waste annually, showcasing the nation’s commitment to sustainability.

The program aligns with Saudi Arabia’s broader sustainable development goals, emphasizing the implementation of well-designed strategies and processes across various sectors, including the National Environment Strategy.

Thinking behind the plan

According to Julien Vermersch, partner at Bain and Co. Middle East, the Kingdom’s ambition to divert 90 percent of its waste away from landfills by 2040 is not only going to be achieved via recycling.

“Whilst increasing circularity and materials recovery will certainly be a very significant lever – in particular because today only about 5 percent of the waste is recycled – this cannot be the only lever,” Vermersch told Arab News.

“Some waste streams, e.g. specific hazardous waste, cannot easily be recycled and in some cases incineration with heat recovery, i.e. waste-to-energy, will remain a better option,” he added.

There are more than economic factors at play in this plan, Vermersch explained, pointing to the rapid urbanization and population growth in the Kingdom putting existing infrastructure under significant pressure.

“All key urban centers are struggling with landfill saturation and whilst it is possible to open new sites or expand existing ones, this trend will rapidly become unsustainable as urban developments continue. Then landfills pose a real environmental threat,” he said.

The Bain and Co. partner shed light on the fact that despite some advancements in this area, the effective management of leachate remains a persistent challenge in urban and industrial areas, as evidenced by numerous reported instances of soil and groundwater contamination over time.

“Additionally, in the absence of gas capture systems, the decomposition of organic wastes in landfills is a major source of methane emissions  – estimated to be around 30-50 Mtpa (million tonnes per annum) of CO2 equivalent emissions, which is 5-7 percent of the total greenhouse emissions of the Kingdom,” Vermersch said.

He further noted that the Kingdom’s landfill diversion target is consistent with what is already achieved in a number of European countries or select advanced Asian countries.

“The ambition to get there by 2040 however is quite bold. For these countries that have made the transition, getting to 90 percent landfill diversion has been a 25-plus years journey requiring stringent regulations, public engagement to build awareness and support and massive capital investments in new waste management infrastructure,” the partner clarified.

Yves Takchi, principal and global co-lead for Arthur D. Little Waste, Water and Circularity Competence Center, told Arab News that according to the National Center for Waste Management the overall ambition is similar across all waste streams, with the combined landfill diversion targets close to 90 percent for all types.

“To achieve this diversion rate, Saudi Arabia has put a great emphasis on recycling, but is also aiming to deploy a variety of other techniques such as waste-to-energy to complement it. The landfill diversion targets that the Kingdom of Saudi Arabia has embraced are rooted in an ambitious and yet scientific approach to transform the waste management sector in the country,” Takchi said.

He went on to explain that at a strategic level, countries have three high level options to manage the waste that is generated by its economy.

“Firstly, most economies with a nascent waste management sector treat waste management as a sanitation service and focus on reducing expenditures while safeguarding public health. This often means that they heavily rely on sanitary landfilling as a cheap and effective method to dispose of waste. The second approach is adopted by countries that want to minimize the waste that goes to landfills while still maintaining convenience and ease of implementation,” said Takchi.

He added that the usual objectives in this scenario are to avoid landfilling in recognition of its environmental damage and unnecessary space usage, as well as to leverage waste to fuel the increasingly energy demanding economies.

The Arthur D. Little official also said that countries in this situation usually end up relying heavily on recovery technologies such as waste-to-energy and refuse-derived fuel, which although have a higher cost and only marginal improvements in environmental performance, are much easier to put in place and rely much less on citizen participation and behavioral change.

Takchi argued that world-leaders in waste management follow the third approach. 

“These countries have managed to put in place systems that strive toward a circular economy approach – as opposed to the linear use-throw-dump model. Their waste systems follow the waste hierarchy, which maximizes first the reduction and reuse of waste materials, then the usage of recycling as the next best alternative, with waste to energy and energy recovery transitional and residual treatments before landfilling,” he said.

With regards to the Kingdom, Takchi believes that Saudi Arabia has “rightly understood” that it is in a unique position to leapfrog from its current model to the more advanced, ambitious model. 

“The country as a whole is embarking on a massive transformation journey embodied by Vision 2030, which has paved the way for massive investments in infrastructure across sectors and has demonstrated that the Saudi people are remarkably adaptable and embracing of positive change,” he said. 

The benefits of this model include environmental protection of land, air and water, a growth in local socio-economic value by increasing investments in infrastructure and creating jobs, and enabling self-sufficiency in materials by keeping scarce resources – like rare metals and minerals – flowing within the economy, which improves the trade balance.

Initiatives implemented to support recycling goals

According to Takchi, the Kingdom has galvanized the sector through the creation of two separate entities – Saudi Investment Recycling Co., and the National Center for Waste Management, also known as MWAN.

The former was established by the Public Investment Fund to act as a sector champion, unlocking access to capital and investing in sector-building investments in partnership with local and world leading companies.

MWAN created a unified sector regulator that consolidated the previously fragmented regulatory ecosystem and took the lead on putting in place the ambitious public-sector led efforts to enable the sector’s transformation.

“We have already seen developments from both entities, with SIRC having put in place recycling initiatives and multiple massive investments announced  – including mega scale infrastructure for Riyadh City. On the other hand, MWAN has already put in place the unified Waste Management Law and its Implementing Regulations, the new regulatory framework for the sector that has finally resolved fragmentation of regulation challenges,” Takchi added.

The Global Co-Lead for Arthur D. Little Waste also said that MWAN has also begun to improve the compliance environment, having embarked on a large-scale master-planning exercise across the different regions in Saudi Arabia. 

It has also announced multiple sector-enabling initiatives aimed at preventing waste at the source, incentivizing resource recovery and maximizing diversion from landfills and including the launch of hundreds of investment opportunities.

“The key success factors to accelerate this paradigm shift will be to find the optimal balance of planning and action and to maintain collaboration and alignment behind the national agenda of an extremely complex ecosystem of many actors, including regulators, municipalities, royal commissions, investors, operators, commercial and industrial players and even citizens,” Takchi said.

Key government support

Strong government backing and regulatory support are essential for the successful transformation of the waste management sector.

Bain and Co. Middle East’s Vermersch highlighted the costly nature of the transition from landfilling to recycling, incineration or waste-to-energy.

“When you look at countries that have very low landfilling rates today, they have introduced over 30 years ago either landfill taxes that have risen to significant levels and/or very stringent landfill restrictions/bans,” he added.

That said, the partner underlined that in order to make this transition possible, an effective system to sort the waste is essential – which typically relies on segregation at the source and requires municipalities to step in.

“As we can see with the example of Riyadh that has been piloting a multi-bin system in recent years, it is not enough to just roll out the new collection infrastructure. It takes awareness campaigns and meaningful community engagements to educate residents and businesses on the importance of sorting waste and on how to use the new system effectively,” Vermersch said.

Takchi said that like most complex and ambitious transformation initiatives that fall within the framework of Vision 2030, the government has a crucial role to play to ensure success for the waste management sector, and that was the impetus behind the creation of MWAN.

“Such a massive leapfrog requires a clear national level direction of travel and strategy to be clear to all actors in the sector. That will allow us to fully synergize efforts and accelerate change. The government also has an important part to play in laying down the necessary enablers to unlock private sector investment and ensure the successful deployment of infrastructure and services,” he said.


Saudi Arabia, UAE invest $26.8m in Pakistan in Q1 of 2024

Saudi Arabia, UAE invest $26.8m in Pakistan in Q1 of 2024
Updated 05 November 2024
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Saudi Arabia, UAE invest $26.8m in Pakistan in Q1 of 2024

Saudi Arabia, UAE invest $26.8m in Pakistan in Q1 of 2024

 

ISLAMABAD: Pakistan’s foreign investment surged by 48 percent in the first quarter of the current fiscal year, according to state-run media reports on Tuesday.

Saudi Arabia and the UAE contributed a total of $26.8 million during this period. In 2023, Pakistan established the Special Investment Facilitation Council, a joint civil-military body aimed at expediting foreign investment decisions in key economic sectors, including agriculture, mining, minerals, and tourism.

This initiative came amid Pakistan’s ongoing economic crisis, which had pushed the country to the brink of a sovereign default. The crisis was mitigated by a crucial $3 billion bailout from the International Monetary Fund last year, preventing further economic collapse.

According to a breakdown shared by Radio Pakistan, China led foreign investments in the first quarter with $404 million, followed by the UAE’s $25 million and Saudi Arabia’s $1.8 million. Other notable contributors included Hong Kong, with $98 million; the UK, with $72 million; and the US, with $28 million.

Radio Pakistan reported: “A significant increase of 48 percent has been seen in foreign investment in Pakistan in the first quarter of the current fiscal year, reflecting the effective strategies of the Special Investment Facilitation Council.”

During a recent visit to Saudi Arabia and Qatar, Pakistan’s Prime Minister Shehbaz Sharif held talks with leaders from both nations to discuss boosting cooperation in trade, investment, and energy. Notably, in October, Pakistani and Saudi businesses signed 27 agreements and memorandums of understanding valued at $2.2 billion.

During Sharif’s visit to the Kingdom last week, the two countries agreed to increase this figure to $2.8 billion.

The UAE remains Pakistan’s third-largest trading partner, after China and the US, and serves as an important export market due to its proximity, which helps minimize transportation costs and facilitates trade exchanges.

In recent months, Sharif has been actively pursuing economic diplomacy in the region, focusing on securing investments, boosting trade, and improving regional connectivity.

Pakistan has sought to leverage its strategic position as a trade and transit hub, connecting landlocked Central Asian countries with the global market while promoting mutually beneficial economic partnerships with Gulf nations.


Saudi Arabia’s CMF Selects holds first-ever market event at LSE

Saudi Arabia’s CMF Selects holds first-ever market event at LSE
Updated 05 November 2024
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Saudi Arabia’s CMF Selects holds first-ever market event at LSE

Saudi Arabia’s CMF Selects holds first-ever market event at LSE

RIYADH: Saudi Arabia’s CMF Selects has successfully concluded its inaugural international market event, hosted at the London Stock Exchange.

The gathering, as announced in a press release, marked a key milestone for CMF Selects, an initiative under the Saudi Capital Market Authority. The event aimed to strengthen strategic partnerships between the Kingdom and global markets.

Organized by CMF Selects, the event attracted more than 245 influential participants, including industry experts and investors from the UK, Saudi Arabia, and other international markets.

CMF Selects is a targeted series of events under the CMF umbrella, focusing on specialized topics that are relevant to Saudi Arabia and its global partners.

Sarah Al-Suhaimi, chairperson of the Saudi Tadawul Group, stated: “The forum has contributed to strengthening the relationships between Saudi Arabia and the United Kingdom, enabling both sides to leverage promising growth opportunities and foster investments between the two markets.”

She added: “We are pleased to continue the journey of success and expand the Financial Markets Forum, aspiring to establish its position as a leading platform for innovation in financial markets. We aim to organize the first Financial Markets Forum in London by 2026.”

Michael Mainelli, the Lord Mayor of the City of London, commented: “The first edition of the event has highlighted the strength of the Saudi-British partnership and their fundamental role in achieving joint Saudi-British visions of growth, as well as strengthening links between the financial markets.”

Discussions throughout the event focused on exploring economic and investment opportunities across a range of sectors, including finance, technology, and sustainable development.

One of the key themes of the event was sustainability and technological innovation—both central to Saudi Arabia’s Vision 2030. Conversations explored how these areas could be advanced through international investment, with the goal of driving economic growth and resilience in both Saudi Arabia and the UK.

Looking ahead, CMF Selects plans to host a series of similar market hub events in other global financial centers, including New York, Tokyo, and Frankfurt.

The press release also revealed that this initiative is part of a broader strategy to position Saudi Arabia as a global financial powerhouse by 2026, supporting the Kingdom’s efforts to diversify and strengthen its economy.


Saudi cabinet approves framework to boost foreign direct investment

Saudi cabinet approves framework to boost foreign direct investment
Updated 05 November 2024
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Saudi cabinet approves framework to boost foreign direct investment

Saudi cabinet approves framework to boost foreign direct investment

RIYADH: The Saudi Cabinet has initially approved the national general framework and guiding principles for foreign direct investment, setting the stage for enhanced economic engagement with international organizations.

The session, chaired by Crown Prince Mohammed bin Salman, addressed significant developments on both domestic and international fronts, according to the Saudi Press Agency.

The Kingdom’s foreign direct investment inflows reached SR96 billion ($25.6 billion) in 2023, marking a 50 percent annual increase from the previous year.

The crown prince briefed the Cabinet on his recent discussions with leaders from several allied countries, focusing on bolstering ties across diverse sectors.

The Minister of Media, Salman Al-Dossary, highlighted that among these decisions the Cabinet authorized Saudi Arabia’s accession to the Cement and Concrete Breakthrough Initiative, launched on the sidelines of the UN Climate Change Conference.

This aligns with the Kingdom’s sustainability goals and commitment to the global climate agenda.

The Cabinet also approved an agreement with Qatar to avoid double taxation and prevent tax evasion.

This move underscores the Kingdom’s dedication to fostering economic cooperation within the Gulf region, facilitating smoother cross-border investments, and enhancing transparency in financial dealings.

In line with advancing Saudi Arabia’s capabilities in science and technology, the Cabinet also endorsed a framework agreement with the US to cooperate in civil aviation navigation and the peaceful exploration of outer space.

Additionally, the Cabinet also reviewed regional and international developments, with the crown prince briefing members on recent discussions with various heads of state focused on strengthening ties across multiple sectors.

The meeting highlighted the Kingdom’s efforts in regional peace initiatives, its commitment to global health challenges through the G20 platform, and recent advancements in the tourism sector.

During the session, the Cabinet commended the outcome of the second ministerial meeting of the Saudi-Indian Strategic Partnership Council economic and investment committee, highlighting the progress toward achieving the two countries’ shared goals.

This was mainly in the fields of industry, infrastructure, and technology, as well as agriculture, food security, climate sciences, and sustainable transportation.

Domestically, the Cabinet underlined the Kingdom’s significant advancement of 15 places in the 2023 international tourist revenue rankings compared to 2019, leading the top 50 rankings in an upward movement.

This achievement underscores the country’s global leadership and ongoing success in the tourism sector.


Closing Bell: Saudi main index closes in red at 12,014

Closing Bell: Saudi main index closes in red at 12,014
Updated 05 November 2024
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Closing Bell: Saudi main index closes in red at 12,014

Closing Bell: Saudi main index closes in red at 12,014

RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Tuesday, losing 24.37 points, or 0.20 percent, to close at 12,014.94.

The total trading turnover of the benchmark index was SR5.73 billion ($1.52 billion), as 86 of the listed stocks advanced, while 140 retreated.   

The MSCI Tadawul Index decreased by 4.65 points, or 0.31 percent, to close at 1,507.83.

The Kingdom’s parallel market Nomu surged, gaining 768.81 points, or 2.74 percent, to close at 28,831.58. This comes as 42 of the listed stocks advanced while 32 retreated.

The best-performing stock of the day was Riyadh Cables Group Co., with its share price surging by 6.95 percent to SR117.  

Other top performers included Arabian Cement Co., which saw its share price rise by 4.51 percent to SR25.50, and Al Moammar Information Systems Co., which saw a 4.38 percent increase to SR185.80. 

The worst performer of the day was Wataniya Insurance Co., whose share price fell by 9.96 percent to SR24.04.

Al-Etihad Cooperative Insurance Co. and Shatirah House Restaurant Co. also saw declines, with their shares dropping by 9.34 percent and 5.77 percent to SR18.44 and SR21.22, respectively.  

On the announcements front, Saudi Public Transport Co. announced its interim consolidated financial results for the first nine months of the current year. SAPTCO’s shares dropped in today’s trading session, dipping by 1.01 percent to reach SR21.58.

According to a Tadawul statement, the firm recorded a net loss of SR20.8 million in this period of the year, reflecting a 53.3 percent dip compared to the same term in 2023.

The decline in net profit for the current period, compared to the same period last year, is due to lower operating revenue from reduced public transportation operations, along with higher general and administrative expenses, increased finance costs, and higher zakat and tax, combined with a decrease in finance income.

The Saudi Arabian Cooperative Insurance Co. also announced its interim financial results for the same period ending on Sept. 30. SAICO’s shares dropped in today’s trading session, decreasing by 2.89 percent to SR14.78.

Net profit before zakat attributable to the shareholders for the current period amounted to SR43.2 million compared to SR65 million during the same period of the previous year, which was mainly due to a decrease of 44.9 percent in the net insurance service, which was affected by a decrease in medical business.

​​For the first nine months of this year, Abdullah Al Othaim Markets Co. revealed its results for the first nine months of this year, with total comprehensive income amounting to SR220.6 million – a year-on-year decrease of 30.4 percent.

Abdullah Al Othaim Markets Co.’s shares decreased in today’s trading session by 1.92 percent to reach SR11.24.

Gulf Insurance Group’s income over the same period also dropped – with the SR78.2 million it registered representing an annual fall of 19.7 percent.

GIG’s shares also saw declines by 0.84 percent to reach SR29.50. 

The individual investor subscription for Tamkeen Human Resources’ initial public offering on the Saudi stock market started Nov. 5 and runs until Nov. 6. 

According to a statement from the company, a total of 1.59 million shares, representing 20 percent of the offering, are allocated to individual investors at SR50 per share. 

The deadline for subscription and payment is Nov. 6, with the final allocation announced on Nov. 11. The minimum subscription is 10 shares, and the maximum is 250,000. Saudi Fransi Capital managed the initial public offering, which saw an institutional demand of SR55 billion, with coverage 138.2 times.


China to issue $2bn bonds in Saudi Arabia amid deepening bilateral ties

China to issue $2bn bonds in Saudi Arabia amid deepening bilateral ties
Updated 05 November 2024
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China to issue $2bn bonds in Saudi Arabia amid deepening bilateral ties

China to issue $2bn bonds in Saudi Arabia amid deepening bilateral ties

RIYADH: China has announced plans to issue dollar-denominated bonds in Saudi Arabia starting the week of Nov. 11, marking its first debt issuance in US currency since 2021. 

The Asian country’s Ministry of Finance disclosed on Nov. 5 that it will sell up to $2 billion in bonds in Riyadh.

This issuance comes as China and the Kingdom are strengthening a multifaceted alliance that extends across multiple spheres.

In recent years, both nations have sought to broaden their economic cooperation, aligning strategic initiatives such as China’s Belt and Road Initiative with Saudi Arabia’s Vision 2030 plan.

“With the approval of the State Council, the Ministry of Finance will issue US dollar sovereign bonds of no more than $2 billion in Saudi Arabia in the week of November 11, 2024. The specific issuance arrangements will be announced separately before the release,” the ministry’s statement read.

This step will positively impact the Kingdom’s financial market, “especially when considering that the Financial Development Program is playing a crucial role in shaping the future of Saudi Arabia’s financial sector,” according to Talat Hafiz, a Saudi-based economist. 

Talking to Arab News, he said such issuance supports one of the main pillars of Vision 2030, to advance the Saudi economy through diversification and enhancing the local financial market.

Strengthening Saudi-Chinese relations

“The issuance is part of China’s efforts to strengthen the relationship between the two friendly countries, which is witnessing huge improvements in several fields,” Hafiz said.

In September,Saudi Crown Prince Mohammed bin Salman and Chinese Premier Li Qiang co-chaired a pivotal meeting of the High-Level Saudi-Chinese Committee, where they reviewed aspects of joint cooperation and addressed regional and international developments. 

The session in Riyadh emphasized opportunities in energy, trade, and investment, as well as well as technology and security, while laying the groundwork for enhanced coordination across these sectors.

Expanding tourism and education links

Tourism has emerged as a significant focus in Saudi-Chinese relations. In October, Saudi officials, including the Minister of Tourism Ahmed Al-Khateeb, engaged with Chinese counterparts to expand travel and investment ties.

The Kingdom received the designation of “Approved Destination Status” from Beijing earlier this year, following participation in key events in China. 

To attract 5 million visitors from the Asian country by 2030, Saudi Arabia has introduced Chinese payment processing options, launched tailored tourism campaigns, and increased direct flights between the two countries.

Growing trade and investment

China has been Saudi Arabia’s largest trade partner since 2014, with bilateral trade reaching $97 billion in 2023. This figure includes $54 billion in Saudi exports and $43 billion in imports from China. 

This issuance will benefit both the Kingdom’s financial market and businesses in Saudi Arabia and China, especially with their strong economic ties and alignment with Vision 2030 and the Belt and Road Initiative, according to Hafiz.

The economist said “the Saudi-Chinese Business Council has a major role to play in promoting business between Saudi Arabia and China.”

He highlighted the trade size amounting to “about $96.5 billion in 2023, representing 18 percent of the total volume of Saudi trade globally.”

Investments between the two nations have also surged, with Chinese investments in the Kingdom rising from $1.5 billion in 2022 to $16.8 billion in 2023. Saudi investments in China are also substantial, totaling $75 billion.

Saudi Arabia and China are exploring new avenues for collaboration, including joint investments in renewable energy, infrastructure, and technology, with a focus on sustainable development. 

The crown prince’s 2019 visit to Beijing set a foundation for this strategic partnership, resulting in 12 agreements and memoranda of understanding that continue to shape bilateral cooperation.