LONDON: When Saudi Arabia announced its plan to embark on a program of renewable energy construction last year, the largest renewable energy project in the Kingdom was Saudi Aramco’s solar car park, according to Michael Liebreich, founder of Bloomberg New Energy Finance, the clean-energy research group.
But things move fast in the country these days, and clean energy is no exception. As part of the Vision 2030 program, Saudi Arabia plans to supply 9,500MW, or 10 percent of its power demand, from renewable sources by 2023 — and it fully expects to exceed this target.
“Saudi Arabia is now tendering for projects. It has done the first few and is getting a very good price for them, and it has a local champion in ACWA Power, which will deliver them,” Liebreich told Arab News. “But there’s a long way to go. It needs to build gigagwatts of this stuff, integrate it into the grid and figure out what that means for its power system.”
In 2018 alone, the Kingdom is seeking investment of up to $7 billion to build about 4,000MW of renewable energy capacity.
Saudi Arabia, the world’s largest oil producer, is looking to generate more energy from renewable sources, in part to reduce its greenhouse gas emissions as part of the Paris Accord on climate change, but also to allow it to sell oil abroad at full price rather than use it domestically where it is subsidized. Developing a renewable energy industry is also part of its Vision 2030 efforts to diversify the economy away from its dependence on oil and gas.
The Kingdom has come late to the renewable energy party, despite its abundant wind and solar resources, but as a result has benefited from the learning process that has taken place in the industry in the rest of the world, said Adnan Amin, director general of the International Renewable Agency.
“Saudi Arabia’s move into renewables is very significant. They are looking to mobilize about $50 billion,” said Amin. “It makes absolute economic sense for Saudi Arabia to embark on this as quickly as they are doing. The opportunity cost of burning oil for power is 90 percent of the cost of a barrel of oil, leaving aside the environmental issues.
“Renewables are incredibly cheap now. The latest bids for Saudi solar projects are around 2.5 US cents per kWh, which is about a quarter of the cost of oil,” he said. “They are also considering how to develop a local industry to create jobs domestically.”
Speaking at a recent renewables conference in Abu Dhabi, Turki Mohammed Al-Shehri, head of the Renewable Energy Project Development Office (Repdo), said that the ultimate aim of the National Renewable Energy Program was to create a globally competitive local industry. To this end, it has imposed demanding rules requiring 30 percent local content for projects awarded last year. In 2018, this requirement rises to 40-60 percent and from 2019 onwards, Repdo wants to see more than 60 percent of equipment being made domestically.
Al-Shehri conceded that there are trade-offs between local content, a low levelized cost of energy (LCOE), meeting deadlines, complying with renewable energy targets and creating jobs. “If we go for the lowest LCOE, we will have to sacrifice local content, for example.”
Even the huge growth in capacity planned between now and 2023 will not be enough to attract investment into local manufacturing facilities, Al-Shehri said. “We have to look beyond the 9.5GW. To capture local content, we need a 10-year pipeline of projects.”
Saudi authorities also hope to export renewable energy to the rest of the worldto complement the oil they export today, Amin said. “We see great potential to export cheap green energy from the region.”
Saudi Arabia may have lagged behind other nations in rolling out renewables, but the scale of its current ambitions — even as it remains the world’s most important oil producer — send an important message that renewable energy is here to stay.
“There is a new understanding that an energy transformation is underway and it is bringing very significant changes to energy systems around the world,” Amin said.
Saudi Arabia makes up for lost time in clean energy race
Saudi Arabia makes up for lost time in clean energy race
Saudi Arabia approves budget for 2025
RIYADH: Saudi Crown Prince Mohammed bin Salman on Tuesday approved the Kingdom’s budget for 2025 projecting revenues at SR1.18 trillion ($315.73 billion) and expenditures at SR1.28 trillion, resulting in a deficit of SR101 billion.
Closing Bell: Saudi main index closes in red at 11,736
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, with the index shedding 51.65 points to close at 11,736.07.
The total trading turnover of the benchmark index was SR5.15 billion ($1.37 billion) with 54 of the listed stocks advancing, while 179 declined.
The Kingdom’s parallel market Nomu also slipped by 0.85 percent to 30,602.83, while the MSCI Tadawul Index inched down by 0.22 percent to 1,474.39.
The best-performing stock on the main market was Riyadh Cables Group Co., with its share price surging by 7.56 percent to SR128.
Media giant MBC Group’s share price soared by 6.83 percent to SR50.80, while the stock price of Elm Co. increased by 4.03 percent to SR1,105.
Conversely, the share price of Jadwa REIT Saudi Fund slipped by 5.12 percent to SR10.38.
On Nomu, the top gainer was Miral Dental Clinics Co. The firm’s share price increased by 14.63 percent to SR113.60.
In announcements, the Saudi Investment Bank stated that it has completed the debut offering of its $750 million dollar-denominated Tier 1 Sustainable Sukuk, issued under its $1.5 billion Additional Tier 1 Sukuk Program.
The bank confirmed that the offering will be settled on Nov. 27, and the sukuk will be listed on the London Stock Exchange’s International Securities Market.
SAIB’s share price rose by 0.57 percent on Tuesday, closing at SR14.04.
Saudi Reinsurance Co. announced that it has received approval from the Kingdom’s Capital Market Authority to increase its capital by offering 26.73 million shares, while suspending preemptive rights, at a value of SR427.68 million.
The reinsurance firm’s share price increased slightly by 0.11 percent to SR45.50.
Tamkeen Human Resources Co. stated that it will begin trading on Saudi Arabia’s main market on Nov. 27.
The daily and static fluctuation limits for the company’s stocks will be set at 30 percent and 10 percent, respectively, during the first three days of trading.
From the fourth day, the daily price fluctuation limits will revert to ±10 percent, and the static price fluctuation limits will no longer apply.
Saudi Arabia clinches 3rd-term presidency of Arab States Aviation Security Committee
JEDDAH: Saudi Arabia has been awarded the presidency of the Aviation Security Committee for a third consecutive term following a unanimous vote by member states.
The announcement was made during the recent 40th committee meeting held at the Arab Civil Aviation Organization’s headquarters in the Moroccan capital, Rabat.
The result underscores the Kingdom’s pivotal role and constructive efforts in dealing with regional and global developments in the aviation industry, according to the Saudi Press Agency.
It also underlines the Kingdom’s international standing in forums related to civil aviation and its engagement in specialized international organizations in the field.
Commenting on the reappointment, the General Authority of Civil Aviation’s executive vice president Mohammed Al-Fozan – who also serves as chairman of the Cooperative Aviation Security Program in the Middle East – underlined the significance of enhancing collaborative Arab efforts in aviation transportation security.
He also spoke of the importance of maintaining continuous communication to uphold the highest safety standards.
The vice president explained that Saudi Arabia, a member of ACAO since its creation in 1996, has been working to support the international organization’s efforts through active participation, coordination, and involvement in its corporate structures, the executive council, and its technical committees.
He assured that the Kingdom will continue its efforts to develop and support the Arab League-affiliated organization, enhance its international leadership role, and collaborate with stakeholders to strengthen the industry.
The Kingdom’s civil aviation sector saw a 17 percent annual increase in the first half of 2024 as it reached 62 million passengers, driven by rising domestic and international travel demand.
According to GACA, the period also saw 446,000 flights, a 12 percent rise compared to 2023.
Additionally, air cargo traffic at the country’s airports surged by 41 percent, reaching 606,000 tonnes during the same period.
These developments support Saudi Arabia’s aviation goals, which include tripling annual passenger numbers to 330 million, expanding connectivity to over 250 destinations from its 29 airports, and increasing air freight capacity to 4.5 million tons annually by 2030.
According to GACA, Saudi Arabia remains committed to supporting global civil aviation through various programs and initiatives.
This includes deploying experts to work with specialized bodies, hosting the permanent headquarters of the International Civil Aviation Organization’s CASP-MID, and housing the permanent hub of the Regional Safety Oversight Organization for the Middle East and North Africa.
SPA also highlighted the Kingdom’s $1 million contribution to ICAO under the “No Country Left Behind” initiative.
Saudi Arabia signs over $9.3bn in deals to boost supply chain resilience
RIYADH: Saudi Arabia has signed nine major agreements valued at SR35 billion ($9.31 billion) during the Global Supply Chain Resilience Initiative forum in Riyadh. The deals aim to enhance global trade connectivity and diversify the Kingdom’s economy.
The agreements span key sectors, including copper smelting, aluminum production, and rare earth processing. These projects align with GSCRI’s goal of attracting SR150 billion in export-focused investments by 2030. Saudi Arabia’s significant progress in logistics is reflected in its 17-place jump to 38th position in the World Bank’s 2023 Logistics Performance Index.
Key agreements
Notable agreements include ventures in copper smelting, refining, and rod production with Vedanta; titanium projects with Advanced Metals Industries Cluster and Tasnee; and rare earth processing facilities with Hastings. Other key deals involve semi-finished aluminum plants with Red Sea Aluminum and an aluminum foil rolling plant with Tahweel.
Further investments include zinc smelting opportunities with Moxico, a platinum group metals smelter and base metals refinery with Ajlan & Bros and Platinum Group, and lithium carbonate extraction along with a copper refinery project with Zijin Group.
One of the highlights of the forum is the signing of a deal to establish a state-of-the-art manufacturing facility with GlassPoint, marking the first step toward building the world’s largest industrial solar thermal project.
Strategic vision
Saudi Investment Minister Khalid Al-Falih emphasized that while globalization is ongoing, it is evolving into a new phase characterized by regionalization and the clustering of supply chains. “In the future, supply chains will be centered around where raw materials, energy, human resources, and capital coexist in an enabling business environment,” he said.
Al-Falih also highlighted the important roles of companies backed by the Public Investment Fund (PIF), such as Manara and Alat, in advancing sectors like mining and digital manufacturing.
Industrial and mining growth
Minister of Industry and Mineral Resources Bandar Alkhorayef reaffirmed Saudi Arabia’s ambition to become a leading industrial player on the global stage. “The country is focused on expanding its industrial base, entering new sectors, and playing a key role in global challenges, particularly in mining,” he stated.
As part of this vision, the Ministry of Industry and Mineral Resources has announced the qualification of both local and international firms to compete for exploration licenses in key mineralized areas, including Jabal Sayyad and Al-Hajar, which cover a combined 4,788 square kilometers. Eligible companies include Zijin Mining Group, Hancock Prospecting, and First Quantum Minerals.
Enhancing supply chain resilience
Minister of State Hamad Al-Sheikh underscored Saudi Arabia’s commitment to strengthening its logistical infrastructure and enhancing global supply chain resilience. He outlined several national strategies aimed at attracting both local and international investment, including the National Industrialization Strategy, the National Investment Strategy, the National Transportation and Logistics Strategy, and the National Agricultural Strategy.
However, Al-Sheikh also cautioned about the challenges posed by shifting market dynamics, geopolitical influences, and environmental considerations. “We must remain aware of the challenges arising from rapid changes in the global supply chain landscape,” he warned.
Launched in October 2022, the GSCRI initiative aims to position Saudi Arabia as a global supply chain hub by capitalizing on its strategic advantages and mitigating the impact of global disruptions. This initiative is an integral part of the ongoing 28th World Investment Conference in Riyadh, which continues until Nov. 27.
India’s Vedanta Copper to invest $2bn in Saudi mining sector
RIYADH: Saudi Arabia’s Ministry of Investment and Ministry of Industry and Mineral Resources have joined forces with Vedanta Copper International, a subsidiary of India’s Vedanta Ltd., to develop $2 billion worth of copper projects in the Kingdom.
The collaboration, formalized through a memorandum of understanding, represents a significant step toward advancing Saudi Arabia’s Vision 2030, which seeks to diversify the country’s industrial and mineral resources sectors.
The investment will focus on the construction of a 400,000-tonnes-per-year copper smelter and refinery, as well as a 300,000-tonnes copper rod production facility. These projects will be located in Ras Al-Khair Industrial City and are intended to reduce Saudi Arabia’s reliance on copper imports, addressing the Kingdom’s growing demand for the metal.
Currently, Saudi Arabia imports most of its annual copper requirement of 365,000 tonnes, a figure expected to more than double by 2035. This partnership will help bridge that gap and strengthen the Kingdom’s domestic copper supply.
In a broader context, these initiatives align with Saudi Arabia’s goal of unlocking its vast, untapped mineral resources, which are estimated to be worth $1.3 trillion. The country aims to increase the mining sector’s contribution to its GDP from $17 billion to $64 billion by the end of the decade.
The projects also support Vision 2030’s broader industrial diversification goals, which are focused on reducing the Kingdom’s dependence on oil revenues and fostering growth in non-oil sectors.
“We are excited and honored to collaborate with the Kingdom of Saudi Arabia in its Vision 2030 initiative,” said Chris Griffith, CEO of Base Metals at Vedanta Ltd.
“Our projects will enhance the Kingdom’s self-reliance in the copper supply chain. Saudi Arabia has been a leader in oil exploration for decades, and now, under visionary leadership, it is ready to tap into its untapped mineral potential, as it embraces the 4th Industrial Revolution.”
Vedanta Copper has already welcomed senior officials from Saudi Arabia’s Ministry of Industry and Mineral Resources, as well as the National Industrial Development Center, to its operations in India. These visits have paved the way for further high-level discussions and planning.
The first phase of the project will involve the construction of a 125,000-tonnes-per-year copper rod mill, requiring an investment of approximately $30 million. Vedanta has confirmed that all necessary approvals have been obtained, land has been acquired, and technology orders have been placed. Construction is expected to begin soon, with commercial production slated to start by the fourth quarter of fiscal year 2025-26.
Beyond the copper rod mill, Vedanta’s broader investment in copper smelting, refining, and rod manufacturing is expected to generate thousands of new jobs and stimulate the development of hundreds of downstream industries in Saudi Arabia.
Over the long term, these projects are projected to contribute approximately $19 billion to the Kingdom’s gross domestic product while helping achieve its goal of self-sufficiency in copper production.
