DUBAI: Since the foundation of the Kingdom of Saudi Arabia, US industrial corporations have been the most committed partners in its economic development, notably in the exploration and production of oil, but also right across the heavy industry sector.
As the Kingdom moves to the next phase with the Vision 2030 strategy to reduce oil dependence, US corporations are again playing a leading role. The razzamatazz of the first foreign visit by President Donald Trump to Riyadh in May was further proof that the US-Saudi “special relationship” is blooming, especially in business matters.
GE, the American industrial giant once known as General Electric, has been involved in that relationship for a long time. Power was, and still is, a major requirement for Saudi Arabia, and power generation has been at the heart of the GE proposition since Thomas Edison, one of the company’s founders, switched on the first commercially viable light bulb 140 years ago. It has been estimated GE turbines produce a third of the world’s electricity.
Russell Stokes, the chief executive of GE’s power division since last summer, is relatively new to the Middle East, but is a GE veteran of 20 years, and he gets the wider historical picture.
“GE has supported regional development for over 80 years in more than 20 countries, working to support growth and build the energy, transportation and health care sectors. We have more than 3,000 customers and 14,000 employees in the region. GE equipment was used in the very first oil explorations in Saudi Arabia in the 1930s,” he said.
It is still very much involved in the Kingdom’s oil sector via its oil-services business, Baker Hughes, one of Saudi Aramco’s main partners.
The GE power portfolio contains all the traditional aspects of the business, like turbines and engines for power generation and distribution from oil, gas and steam, as well a water technology essential in a desert region. But it also increasingly includes nuclear and alternative power sources, like wind, wave and solar.
So GE is more than just an industrial company; it is also at the cutting edge of industrial innovation. In Saudi Arabia, for example, it operates the GE Manufacturing Technology Center in Dammam, with a specialized research and development business complementing manufacturing and maintenance facilities.
The center has a 70 percent Saudi workforce, and has collaborated with over 300 small- to medium-sized enterprises. “We help to strengthen the Kingdom’s industrial ecosystem,” said Stokes.
That ecosystem is undergoing a profound change. The Vision 2030 strategy involves reducing dependence on oil and promoting private-sector entrepreneurialism as opposed to public-sector bureaucracy.
But it also involves embracing the “fourth industrial revolution” — the transformation of economic systems put in train by the intersection of digital, communications and robotic technology. Projects like the $500 billion Neom mega-city, which will have more robots than people, as well as other high-tech developments, are a central part of the strategy.
These days, GE calls itself a “digital industrial company,” and Stokes explained what this means for the power business in the Middle East.
“The industrial Internet is helping companies reach new levels of productivity and gain competitive advantages. GE is the world’s leading digital industrial company, marrying software and hardware to deliver outcomes for customers that were previously unattainable, such as gains in efficiency for power plants or less downtime for jet engines.
“Being a digital industrial company is both internal and external for GE — internal to provide our employees with the latest tools and empower them to be high performers, and external so our customers can benefit from the digital technology solutions we offer,” he said.
How does this principle apply to Saudi Arabia, with its unique demographic challenges and power requirements?
“Energy consumption in the Kingdom is high on a per capita basis, with power generation investments being made to meet demand for the industrialized economy. As the Saudi Vision 2030 is implemented there is likely to be long-term growth in demand for energy. As per the aims of Vision 2030, that demand is going to be met with a more diversified energy mix, including ambitious targets for renewables and a continued focus on more efficiency.
“With approximately 50 percent of Saudi Arabia’s population under the age of 30, the younger generations will likely be at the forefront of supporting new forms of energy and changing behaviors, and we should embrace them,” he said.
So Saudi Arabia’s next generation has a new and different requirement for basic everyday power and water needs, and GE will be involved in finding solutions to those changing demands. But on top of that, the Kingdom will also need some innovative thinking for the mega-projects that are the flagships of the transformation strategy — Neom, the Red Sea Resort and the other big economic and leisure hubs planned in the Kingdom. Stokes is looking forward enthusiastically to getting involved in these.
“These mega-projects are truly path-breaking, and have the potential to make an enormous positive impact on the economy of the Kingdom. For example, Neom is creating a world-class hub that will help enable key economic sectors, including renewable energy and water, biotech, and advanced manufacturing. As the world’s leading digital industrial company, GE is very excited about these projects,” he said.
Some skeptics have questioned the practicality of achieving the transformation planned in the Kingdom, both in terms of changing the conservative social and business culture of Saudi citizens, and the challenges of undertaking such a profound transformation in a comparatively short time frame. Does Stokes think Vision 2030 is achievable?
“It is bold and comprehensive, and being led by strong and committed leadership. Yes, I believe it is achievable. The vision is holistic, with a drive for transparency and clearly articulated measurements related to execution. The role of the private sector, as well as companies like GE, is important to build local capabilities and capacity, not just for Saudi Arabia but also for exports. The key to Vision 2030 now will be for all of us to continue working collaboratively for the benefit of the country,” he said.
The other aspects of the Saudi transformation that might attract GE is the corporate opportunity it presents. The government is planning a $200 billion privatization program involving the sell off of parts of the economy currently owned by the government, with power and water key parts of that.
GE’s expertise and long-standing relationship with the Kingdom would seem to put it in a good position to buy or at least joint venture on some of the privatization assets, but Stokes declined to talk details. “We are constantly open to new prospects for growth and evaluating potential partnerships and collaborations. We will assess each opportunity as it comes our way,” he said.
Outside the Kingdom, the wider Middle East, North Africa and Turkey (MENAT) is a key region within the global GE set-up, contributing $17.8 billion of the $112 billion of worldwide industrial revenue the company reported in 2016. There are big plants in Kuwait and the UAE, and also in Qatar, which Stokes declined to discuss.
“The Middle East remains a critically important region for GE’s global growth, and we have a strong customer and employee base here. For the energy industry, we continue to see demand for gas, renewables and steam power projects in the region, and we have expanded our services capabilities to ensure long-term support is available as well. As the energy mix continues to evolve, we will be able to offer technologies which best fit the needs of the region, our customers and the visions of forward-thinking plans like the Saudi Vision 2030,” he said.
At home in the US, GE has been through a challenging time, with a change of chief executive coinciding with a falling share price as doubts emerged among investors about some aspects of the conglomerate’s long-term strategy.
Last month, new CEO John Flannery announced a strategy review after a $6.2 billion charge emerged relating to the financial services business, which is being investigated by the US authorities.
How these financial issues will play out remains to be seen, but it seems unlikely they would impact GE’s core power business, which is the mainstay of its operations in the region.
At the Riyadh conference in May, GE announced $15 billion of deals with the Kingdom, mostly in the power-generation business, but also with Saudi Aramco, the national oil giant, and in the medical technology and training sector. That is a sign of ongoing commitment to the Kingdom after GE’s decades of involvement there.
“The world is transforming rapidly, and the digital industrial transformation is happening in all industries, but the transformation of energy is really what is becoming a global phenomenon. The convergence of hardware, software, controls and the cloud is a personal passion of mine,” said Stokes.
“With the astounding growth in the MENAT region over the last few years, we will continue to seek out local collaborators to make the future a reality.”
GE helping generate the energy behind Saudi Vision 2030
GE helping generate the energy behind Saudi Vision 2030
- 80 years on, GE very much involved in Kingdom's energy sector
- With KSA's strong and committed leadership, Vision 2030 is achievable — GE exec
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Global sustainable bond issuance to reach $1tn in 2025: Moody’s
- Impending maturity wave is set to escalate, signifying additional refinancing requirements alongside regular issuance goals
- Moody’s said ESG risks this year will be influenced by policy decisions and financing.
RIYADH: Global sustainable bond issuance is projected to reach $1 trillion in 2025, driven by a worldwide focus on green development, according to global credit rating agency Moody’s.
In their latest report, the New York-based firm said that increased examination of greenwashing, changes in market norms and regulations, and a more intricate landscape, which includes political challenges in certain nations, are expected to impede growth.
This aligns with the green bond market, which has advanced a decade beyond the international treaty on climate change that was signed in 2016, known as the Paris Agreement. The market provides a boost to the sector as initial issuances are gradually approaching maturity.
The impending maturity wave is set to escalate this year and 2026, signifying additional refinancing requirements alongside regular issuance goals, according to capital market firm AXA Investment Managers.
“We expect global sustainable bond issuance to total $1 trillion in 2025, in line with 2024. Social bonds will be constrained by a lack of benchmark-sized projects, while transition-labeled bonds and sustainability-linked bonds will remain niche segments as they navigate evolving market sentiment,” Moody’s report said.
“A continued focus on climate mitigation financing, as well as growing interest in climate adaptation and nature, will spur green and sustainability bond issuance,” it added. “Meanwhile, the widening gaps between decarbonization ambitions and implementation will be brought into focus by the contrast of fresh pledges and increasingly destructive climate events.”
Regarding the outlook on environmental, social, and governance factors, Moody’s said the risks this year will be influenced by policy decisions and financing.
“Companies will encounter challenges in handling environmental and social risks within their supply chains. Additionally, technological disruptions, climate change, and demographic shifts could exacerbate social risks and pose policy obstacles for governments,” the agency added.
In November, Moody’s said that global issuance of sustainable bonds in the third quarter of last year reached $216 billion, marking a 9 percent annual increase.
It said at the time that the year-on-year increase in green, social, sustainability, and sustainability-linked bonds came despite a quarter-on-quarter drop, with the volume issued down 14 percent in the three months to the end of September compared to the preceding period.
For the first nine months of 2024, sustainable bond volumes reached $769 billion, marking a 3 percent decline compared to the same period last year.
Despite the quarterly dip, Moody’s forecasted that the total sustainable bond volumes will reach $950 billion in 2024 “buoyed by relatively robust volumes in the first half of the year and continued issuer appetite for funding environmental and social projects with labeled bonds.”
Saudi benchmark index inches up 0.26% to close at 12,386
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 32.12 points, or 0.26 percent, to close at 12,386.16.
The total trading turnover on the benchmark index reached SR5.11 billion ($1.36 billion), with 161 stocks advancing and 69 retreating.
The Kingdom’s parallel market, Nomu, also saw a modest gain, rising 49.70 points, or 0.16 percent, to close at 30,896.29, as 49 stocks advanced and 42 declined.
The MSCI Tadawul Index closed up by 2.01 points, or 0.13 percent, finishing at 1,545.39.
Kingdom Holding Co. emerged as the day’s top performer, with its share price surging 9.80 percent to SR10.20. Other notable performers included Al-Baha Investment and Development Co., which rose 9.30 percent to SR0.47, and Saudi Fisheries Co., whose share price jumped 7.84 percent to SR24.28.
On the downside, Al-Jouf Cement Co. recorded the largest drop, falling 3.57 percent to SR12.44. Arabian Pipes Co. also saw its stock decline by 2.50 percent, closing at SR13.26, while Rasan Information Technology Co. dropped 1.94 percent to SR90.80.
On the announcements front, Al-Baha Investment and Development Co. announced its annual financial results for the period ending Dec. 31. The company reported a net profit of SR8.37 million for 2024, a 69.48 percent increase compared to 2023. The growth was primarily driven by a 13 percent rise in revenues, a 98 percent drop in zakat provisions, a 39 percent reduction in financing costs, and a decline of SR1.18 million in investment properties.
Al-Moammar Information Systems Co. has signed a SR58.6 million contract with the Saudi Authority for Data and Artificial Intelligence to enhance the AI network through software and services.
According to a bourse filing, the 36-month deal is expected to generate positive financial impacts starting in Q1 2025. The stock closed at SR160.40, up 0.51 percent.
Al-Sagr Cooperative Insurance Co. received an Insurer Financial Strength Rating of “BBB” and a National IFS Rating of “A+” with a stable outlook from Fitch Ratings.
The ratings reflect Al-Sagr’s strong capitalization, solid financial performance, and well-diversified insurance portfolio, despite its moderate operating scale within the Saudi insurance market. Al-Sagr’s stock closed at SR18.10, up 3.20 percent.
Saudi-based Walaa Cooperative Insurance Co. maintains ‘A-’ rating: S&P Global
- S&P expects Walaa to maintain this level of capital adequacy over the next two years
- It also expects the company to gradually improve its combined ratio to about 98% in 2025—2026
RIYADH: Saudi Arabia’s Walaa Cooperative Insurance Co. maintained its “A-” long-term insurer financial strength rating by S&P Global, with a stable outlook.
The New York-based credit rating agency also affirmed its “gcAAA” long-term Gulf Cooperation Council regional scale rating and “ksaAAA” long-term Saudi national scale assessment for Walaa, highlighting the insurer’s capital position and planned business growth initiatives.
This comes as the company completed an SR468 million ($124.8 million) rights issue in December 2024, initially announced in September 2023.
The additional capital will support the firm’s growth strategy and enhance its regulatory solvency margin.
S&P said Walaa’s capital adequacy exceeded its 99.99 percent confidence level before the reserve increase, with the recent capital injection further strengthening the company’s financial stability.
The rating agency expects Walaa to maintain this level of capital adequacy over the next two years, underpinning its stable outlook.
The firm’s stock price has already seen a significant 5.26 percent increase by 2:20 p.m. Saudi time to reach SR24.
Despite its strong capital position, Walaa’s operating performance has lagged behind similarly rated peers, according to S&P.
At the end of the third quarter of last year, the company ranked as the fifth largest insurer in the Kingdom, with insurance revenue reaching SR2.4 million and a growth rate of 17 percent.
However, the insurer faced challenges in profitability, driven by its medical insurance segment.
The combined ratio — a key measure of underwriting performance — stood at 101 percent for the third quarter of 2024, compared to 98 percent during the same period the previous year.
While the motor insurance segment, which experienced losses between 2021 and 2023, returned to profitability in 2024, reporting a service result of SR18 million for the third quarter, Walaa’s medical insurance business posted a significant loss of SR85 million during the same period.
This marks a sharp decline from the SR4 million loss recorded in the third quarter of 2023. The company plans to expand its medical insurance segment over the next two years, aiming for breakeven by the year’s end.
S&P said the goal may be challenging due to the competitive and concentrated nature of the medical insurance market in Saudi Arabia, which is projected to reach $4.33 billion this year, according to German online data gathering platform Statista.
The medical segment is dominated by The Co. for Cooperative Insurance and Bupa Arabia for Cooperative Insurance, which collectively accounted for 76 percent of market revenue and most of the segment’s profitability in the third quarter of 2024, according to S&P.
Walaa’s ability to achieve breakeven in this segment will play a critical role in the recovery of its overall performance.
S&P expects Walaa to gradually improve its combined ratio to about 98 percent in 2025— 2026 as it continues to diversify its business and recover its operating performance.
The agency also flagged potential risks, including the possibility of a negative rating action if Walaa’s underwriting performance is weaker than its local and regional peers or if its capital adequacy falls below the 99.95 percent confidence level.
S&P views the likelihood of a rating upgrade as limited during the outlook period. Any positive rating action would depend on Walaa’s ability to significantly increase and diversify its premium income without impairing operating performance, while maintaining capital adequacy at the 99.99 percent confidence level and a low-risk investment portfolio.
World leaders to attend Saudi Real Estate Future Forum 2025 for industry-shaping discussions
- Event will gather over 300 speakers from 85 countries to lead discussions on the direction of real estate
- Key themes and sessions at RFF 2025 will encompass various topics, with over 30 high-level dialogue events and 25 in-depth workshops
RIYADH: The Real Estate Future Forum is set to serve as a global hub for industry leaders, policymakers, and investors as Saudi Arabia transitions toward a diversified and innovation-driven economy.
The event will be held from Jan. 27— 29 at the Four Seasons Hotel in Riyadh and will gather over 300 speakers from 85 countries to lead discussions on the direction of real estate.
Under the theme “Future for Humanity: Shaping Dreams into Reality,” RFF 2025 will focus on innovations, sustainability efforts, and investment strategies reshaping the global property market.
This year’s edition will also spotlight the Middle East’s $1 trillion real estate pipeline, which is driving changes in urban development and creating new regional economic opportunities.
Saudi Arabia at the forefront of real estate evolution
The Kingdom’s Vision 2030 reforms have positioned the country as a leader in real estate development, combining innovation, sustainability, and economic growth.
Forum participants will get an in-depth look at major projects, including NEOM, The Red Sea Project, and Diriyah Gate, and their economic impact and long-term sustainability.
The discussions will provide insights into how these initiatives are influencing the broader real estate landscape.
A $1 trillion opportunity for global transformation
With the Middle East witnessing an unprecedented wave of urban expansion, the real estate sector has immense opportunities and critical responsibilities.
This year’s forum will highlight how key stakeholders can leverage digital transformation, sustainable construction, and strategic investments to build cities that are economically viable, environmentally responsible, and socially inclusive.
Benjamin Deschietere, managing director and partner at Boston Consulting Group, underscored the urgency of sustainability in real estate development.
“The Middle East’s $1 trillion real estate pipeline offers a once-in-a-generation opportunity to rethink how we design and build our communities,” he told Arab News.
“With buildings accounting for more than one-third of global greenhouse gas emissions, decisions made today in the region’s transformative mega-projects will impact generations and have the potential to influence global standards for decades,” he added.
Deschietere said that sustainability in design, the use of greener materials, and advancements in construction and procurement practices are essential rather than optional.
He said cities built with these principles would be more resource-efficient, livable, and valuable in the long term, adding that developers who adopt these approaches would gain a significant competitive edge in the coming decades
A holistic approach to sustainability and innovation
RFF 2025 will focus on environmental sustainability and social and economic resilience. With the Kingdom’s target of developing 1 million new housing units by 2030, the forum will discuss how sustainable urbanization can drive affordability, job creation, and social equity.
Edoardo Geraci, managing director and partner at BCG, told Arab News of the need for a paradigm shift. “Traditional real estate has often prioritized growth over sustainability, but the future demands a more holistic approach.”
He added that beyond reducing carbon emissions, sustainable development must also consider social outcomes, such as inclusivity, affordability, and job creation.
“Passive design principles and smart building technologies already enable a reduction of lifecycle carbon emissions by up to almost 40 percent, offering significant cost savings over time,” the expert said.
Geraci also said the Middle East has a distinct chance to demonstrate how well-planned urban development can improve the quality of life, restore natural resources, and establish new standards for sustainable and resilient cities on a global scale.
RFF 2025 themes and sessions
Key themes and sessions at this year’s forum will encompass various topics, with over 30 high-level dialogue events and 25 in-depth workshops.
Discussions on smart cities and digital transformation will explore the role of artificial intelligence and blockchain in real estate transactions and homeownership, innovations in smart buildings and urban infrastructure, and the impact of big data on market forecasting and investment strategies.
Sustainable real estate and green building innovations will be another focal point, addressing the shift toward net-zero developments and green architecture, sustainable financing models for eco-friendly projects, and case studies from leading sustainable cities and giga-projects.
Real estate investment and financing trends will be examined, with insights into alternative financing models for large-scale undertakings, the impact of global economic shifts on Middle Eastern real estate markets, and future trends in institutional investment and private sector involvement.
The forum will also highlight the role of giga-projects in economic growth, offering perspectives from key players behind NEOM, The Red Sea Project, and Diriyah Gate, while discussing how these developments are shaping tourism, hospitality, urban living, the intersection of real estate, entertainment, and sports infrastructure.
RFF 2025 will provide an outlook on integrating advanced technologies into the real estate sector. Panels will dive into emerging trends like virtual reality for property marketing, the role of the metaverse in digital real estate, and the use of robotics and 3D printing in construction. The implications of these technologies for efficiency, cost savings, and consumer experiences will be examined.
Another focus will be community-centered urban planning and sessions will address the importance of inclusivity and accessibility in development projects, exploring how innovative housing models and mixed-use initiatives can enhance quality of life and foster social and economic prosperity.
The forum will also discuss sustainable procurement practices and supply chain transformation, offering insights into minimizing waste and achieving carbon neutrality in mega-projects.
The three-day event is set to feature a distinguished lineup of speakers, including government officials, global investors, and media personalities who will provide valuable insights into industry-shaping trends.
Notable speakers include Majid Al-Hogail, Saudi minister of municipalities and housing; Turki bin Talal, governor of Asir region; Saud bin Talal, governor of Al-Ahsa; former US President Bill Clinton; international media influencer Piers Morgan; and global media commentator Tucker Carlson.
With Vision 2030 strongly supporting tourism and lifestyle projects, discussions will explore how cultural preservation and modern innovation coexist in urban developments.
Sessions will delve into the design of projects such as New Murabba and Trojena in NEOM, examining how these ventures are redefining the Kingdom’s global image while fostering sustainable growth.
Insights into the transformative impact of major sporting and entertainment events on real estate demand and city planning will highlight the sector’s potential to drive broader socio-economic change.
A platform for transformative deals and partnerships
The 2024 edition of RFF saw over 50 agreements worth SR100 billion ($26.6 billion) signed, driving investment in key real estate projects.
The 2025 forum is expected to eclipse those numbers, offering an even greater platform for deal-making, policy announcements, and strategic partnerships.
A Glimpse into the Future
The Kingdom’s real estate sector is on the cusp of a technological and financial revolution driven by digital transformation, sustainable design, and forward-thinking policies.
As Vision 2030 continues to guide the nation toward an economically diversified and innovation-driven future, RFF 2025 will serve as a platform for international investors, developers, and policymakers looking to tap into the region’s potential.
RFF 2025 will offer various opportunities for networking, collaboration, and sharing expertise, making it a key event in the ongoing development of the global real estate industry.
Oman’s inflation rate edges up 0.7% in December
RIYADH: A rise in the prices of several categories of consumer products pushed Oman’s annual inflation rate up by 0.7 percent in December compared to base year 2018, according to new data.
The rise in inflation was driven by increases in several key categories, including miscellaneous goods and services, which surged by 4.5 percent, health services by 3.2 percent, and food and non-alcoholic beverages by 1.7 percent, according to the National Center for Statistics and Information reported.
Food and non-alcoholic beverages saw a 1.7 percent price hike, while the restaurant and hotel group rose by 0.8 percent. Other sectors, including culture and entertainment, clothing and footwear, and furniture and household maintenance, also experienced minor price increases.
Despite this, Oman’s inflation remains among the lowest in the region, as the government has implemented measures to contain price rises. This effort has been supported by prudent fiscal policies, high oil prices, and growth in non-hydrocarbon exports.
These factors helped the country achieve a 6.2 percent budget surplus and a 2.4 percent current account gain in 2024.
The latest CPI data also highlighted specific price hikes in food categories. Vegetables saw a significant 7.6 percent increase, followed by milk, cheese, and eggs at 3.8 percent.
Other food products not categorized elsewhere rose by 3.7 percent, while sugar, jam, honey, and sweets increased by 2.8 percent. Meat prices were up 2.6 percent, fruits rose by 2.2 percent, and oils and fats climbed by 1.6 percent.
On the downside, transportation costs fell by 0.8 percent, non-alcoholic beverages dropped by 0.5 percent, and fish and seafood prices plunged by 6.3 percent. Prices in the housing, water, electricity, gas, and other fuels sectors remained stable, as did communications and tobacco prices.
For 2025, Oman projects a modest 2.7 percent growth in gross domestic product, while IMF projections released earlier this month point to a more optimistic 3.1 percent expansion. The inflation rate has been easing in recent months, declining to 0.6 percent during the first 10 months of 2024, down from 1.0 percent in 2023.
