INTERVIEW: Sam Darwish, Group CEO at IHS Towers - the accidental engineer who found his calling

Sam Darwish - Group CEO at IHS Towers. (Illustration: Luis Grañena)
Updated 25 May 2019
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INTERVIEW: Sam Darwish, Group CEO at IHS Towers - the accidental engineer who found his calling

  • The CEO has made it big in telecoms, in a career shaped early on by Lebanon’s bloody civil war

For some, student survival means merely coasting along at university in the hope of bagging a 2.1, as well as invites to as many parties as possible.

For telecoms executive Sam Darwish, however, survival took on a more literal sense, having embarked on his studies in the dying days of the Lebanese civil war.

Teenage life was tough for Darwish, who is now 47 and a US citizen. Growing up in Beirut in the 1980s meant a constant backdrop of violence —  “there were many wounded,” he said — plus the daily struggles of putting food on the table and regular electricity blackouts.

But it was this experience that taught Darwish a certain “pragmatism” that he continues to put to use today as chief executive of telecoms company IHS Towers, which has to date raised more than $5.5 billion in funding.

Sitting in the IHS office in London’s plush Mayfair district, Darwish recounted how, when he was a student, his father would give him a small sum of money each day. He could either use it to take public transport to the American University of Beirut campus — or buy lunch, and risk the walk through the war-torn streets.

“Decisions like that make you pragmatic. It makes you solution-orientated. It makes you appreciate what the basics in life are,” said Darwish.

“You need just to survive. You need to find a solution. Electricity would disappear for a few days, then people started charging their batteries in their cars, and at the end of the day remove the battery to put on a light or small TV,” he added.

“It taught me to not take anything for granted. You needed to think and rethink every little thing that exists.”

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BIO

SAM DARWISH

•47 years old

•US citizen, grew up in Lebanon

•Married, three children based in US

EDUCATION

•Bachelor’s engineering degree in computer communications, American University of Beirut

CAREER

•Network chief engineer, Libancell, Lebanon

•Vice chairman, director of projects, Lintel

•Deputy managing director, CELIA Motophone, Nigeria

•Co-founder, IHS Towers

OTHER INTERESTS

•Founder, Singularity Investments

•Founder, DAR Properties

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This practical attention to detail — along with an awareness of the importance of finance, power and security — are very much required in Darwish’s role today.

IHS Towers’ business model is relatively straightforward: The company buys mobile towers from telecoms companies, or builds them itself, then leases them back to the operators.

Darwish co-founded the company in Nigeria in 2001, and it now has operations in Cameroon, Cote d’Ivoire, Rwanda and Zambia.

Renting out mobile communications towers is hardly the most glamorous of businesses — it is “simple and low profile, we don’t make it flashy,” he said — but the economics stack up.

Selling mobile towers allows telecoms companies to free up cash, while companies such as IHS can rent space on the masts to multiple carriers, which is more efficient. It is a model that Darwish believes the entire industry will one day embrace.

“When (a single operator) owns a tower, often it’s not optimized in terms of the revenue that that tower can get,” he said.

“They end up with hundreds of millions, sometimes billions of dollars on their balance sheet (with) towers (that are) inefficient, and simply depreciating. Sharing means more efficiency, and more margin for everyone.”

There is also a certain advantage to dealing with purely “basic” infrastructure, given the global furor about the security of telecoms networks.

IHS deals with the actual steel masts, rather than the more sensitive communications kit or software they house.

For that reason, it does not face as much scrutiny as a company such as Huawei, the Chinese equipment firm that the US believes poses a security risk.

“There’s a big difference between us and what Huawei does. We’re providers of passive infrastructure,” said Darwish.

“Our towers are simple towers … It’s a location, it’s a tower, it’s power, it’s security —  that’s what we provide,” he added.

“But at the end of the day, we’re also part of critical infrastructure for countries … So there’s always the aspect of ‘who are these guys, who are their shareholders, what’s their track record, what’s their governance like?’”

That is partly why Darwish runs IHS as if it was a “a public company by Western standards.” The company’s governance is “very strict,” and its high-profile shareholders include Goldman Sachs (through a special fund), the Singapore sovereign wealth fund GIC, the Korea Investment Corp. and IFC, the private equity arm of the World Bank.

At the end of the day, we’re part of a critical infrastructure for countries.

Sam Darwish

Such backing — Darwish said IHS has raised between $5.5 billion and $6 billion of capital since it was formed —  and governance standards bode well for a potential initial public offering (IPO) of IHS.

The company last year shelved such a plan, but Darwish said it is thinking about “moving ahead” with plans for a listing in New York or London.

“There are hundreds of thousands of towers out there that could be bought, or built, over the next few years … That’s why a potential listing is important to us at some point in time,” he said.

Such a move would potentially expedite the company’s expansion in areas such as the Arabian Gulf, which is currently its “main focus.”

IHS has already struck regional agreements to buy towers from telecoms operators Zain Kuwait and Zain KSA.

Upon completion of those two deals — which are still subject to regulatory approval — the Mauritius-headquartered IHS will have approximately 33,100 towers in its portfolio. It is currently the world’s second-largest independent, multi-country tower operator.

Darwish said Saudi Arabia is “where we’d like to grow,” with IHS recently having obtained a foreign investment license from the General Investment Authority, with plans for an office staffed by 100-200 people.

He cited the economic reforms underway, which include weaning Saudi Arabia off its reliance on oil and encouraging more women into the workplace.

“The Kingdom is going through a transformation now. This transformation is fascinating, and it’s something that needs to be watched very carefully,” he said.

“They’re using this cash they have now to start planning, and start transforming — theaters, entertainment, industries, manufacturing, all these massive investments they’re doing.”

Whilst inhabiting an industry that lacks a certain glam factor, there is something of the “Davos man” about Darwish.

Dressed casually in a designer jacket in his Mayfair office, he explained some of his interests that run parallel to IHS.

He is the founder of Singularity Investments, a private investment firm with a focus on technology and media companies in the US and emerging markets, along with DAR Properties, a property investment company.

Darwish also has a strong interest in corporate social responsibility, having supported incubator programs for aspiring tech entrepreneurs in Lagos, served as a mentor to local business executives, and worked on several health and education projects in Africa.

His personal passion, however, is the IHS Academy, launched one and a half years ago, which offers online education in the field and has seen some 40,000 course completions.

“The training for me is the single most important thing I can give, and it helps us at the end of the day,” said Darwish.

“I personally believe in the power of education — that’s what transformed my life. My father worked three shifts to basically make sure we stayed in the best private schools … He believed in what education can do in transforming lives.”

Darwish’s own studies in Beirut, however, nearly took a different turn. Though he graduated as an engineer in computer communications with “the highest distinction” — setting him out on a 20-year career in telecoms — it was never the path he envisaged.

“I wanted to be a Nobel Prize physicist. (But the university) dean called me, and he was like, ‘no — we need you in engineering’,” Darwish said. “It was just by accident that I became an engineer, but it paid off.”


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

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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.

Strengthening Saudi-Chinese relations

In September, the Kingdom’s 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. 

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.


Saudi Arabia awards 11 mining exploration permits under accelerated program

Updated 1 min 40 sec ago
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Saudi Arabia awards 11 mining exploration permits under accelerated program

JEDDAH: Saudi Arabia has granted 11 mining exploration permits to local and international companies for six sites under its Accelerated Exploration Program, which aims to unlock the Kingdom’s underutilized mineral resources.

On Nov. 5, the Ministry of Industry and Mineral Resources announced that the permits, covering a total area of 850 sq. kim across Riyadh, Makkah, and Asir, were awarded as part of a competitive licensing round designed to boost the country’s mineral sector. This initiative is aligned with Saudi Arabia’s Vision 2030 and the National Industry Development and Logistics Program.

The recent competition concluded with one national company and five alliances consisting of 10 local and international firms being awarded the exploration rights. The competition was designed to maximize the value of the country’s mineral resources and expand the mining industry as a key pillar of the economy.

Transforming the mining sector

Saudi Arabia is aiming to transform mining into the third pillar of its industrial base, alongside oil and petrochemicals. The Kingdom is home to more than 5,300 mineral sites, estimated to be worth around SR5 trillion ($1.33 trillion), and the ministry is actively seeking to harness these resources to fuel economic growth.

Among the winners, the alliance of ANS Exploration and Odyssey Metal Ltd. was granted an exploration license for the Umm Qasr site in Riyadh, known for its deposits of gold, silver, lead, and zinc. Gold and Minerals Co. secured a license for the Wadi Doush site in Asir, an area rich in gold, silver, and copper ore deposits, covering 157 square kilometers.

The alliance of AuKing Mining Ltd. and Barg Al-Saman Mining Co. received a license for the Shuaib Marqan site in Riyadh, spanning 92 square kilometers and noted for its copper, silver, and gold resources. Meanwhile, Metal Bank Ltd. and the Mining Holding Co. were awarded the Wadi Al-Jouna site in Asir, which covers 425 square kilometers and contains copper, zinc, silver, and gold.

Other awarded licenses include the Hazm Shubat site in Asir, granted to the Rawkad and Masharef alliance, which is known for its gold deposits. The Midad Al-Muna for Mining and Tinka Resources alliance was given the license for the Huwaimdhan exploration site in Makkah, which also holds significant gold resources.

Commitment to local development

A total of 44 bids were received from 22 companies — many of them new to the Saudi market—during the competition. Bids were evaluated based on technical expertise, proposed work programs, and social and environmental considerations. As part of their commitment, the winning companies have pledged to invest SR75 million ($20 million) in exploration activities and SR5 million toward community development, aiming to create jobs and opportunities for citizens in underserved areas.

This licensing round marks a significant milestone for Saudi Arabia’s mining sector, with four companies receiving exploration licenses for the first time, further cementing the Kingdom’s appeal as a leading investment destination for mining.

Aligning with Vision 2030

The ministry highlighted that this initiative reflects investors' confidence in Saudi Arabia’s mining investment framework, which adheres to the highest standards of transparency and environmental responsibility. It also underscores the country’s commitment to diversifying its economy in line with Vision 2030, which aims to develop the mining sector as a key economic driver.

In a related development, the ministry recently announced another competition for seven mining exploration licenses, covering regions in Makkah and Riyadh and targeting a range of precious and base metals, including gold, copper, zinc, lead, and silver. The deadline for submitting technical proposals for this new licensing round is at the end of November.


Private sector drives 6.1% rise in Saudi capital investment for Q2

Updated 32 min 9 sec ago
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Private sector drives 6.1% rise in Saudi capital investment for Q2

RIYADH: Saudi Arabia’s gross fixed capital formation reached SR296 billion ($79 billion) in the second quarter of 2024, marking a 6.1 percent year-on-year increase, according to recent data. 

The Ministry of Investment attributed this growth primarily to the non-government sector, which holds an 86.45 percent share of total GFCF.  

This sector saw an 8.2 percent increase, reaching SR255.9 billion, reflecting robust private-sector activity aligned with Vision 2030’s targets to boost private investment. Conversely, GFCF in the government sector declined by 5.2 percent to SR40.1 billion.   

GFCF, which measures net investments in assets like infrastructure, machinery, and construction, is a key indicator of long-term economic potential, as it reflects capacity-building investments that drive productivity and growth. 

Saudi Arabia’s appeal as a top investment destination continues to grow, with the Ministry of Investment issuing 3,810 licenses in the third quarter — a 73.7 percent annual rise, excluding permits from the Tasattur anti-concealment initiative.  

This strong performance highlights the Kingdom’s successful positioning as a competitive market, driven by an increasingly stable and business-friendly environment, according to the report. 

The ministry’s October report, which aligns its data with the latest IMF guidelines, showed that Saudi Arabia’s foreign direct investment stock reached SR897 billion in 2023, a 13.4 percent increase from 2022.  

Excluding the one-time SR55 billion Aramco pipeline deal, the data showed that net inflows — representing the total new foreign capital coming into the country after accounting for outflows — also surged by 91 percent during this period, reaching SR86 billion. 

As Saudi Arabia pushes toward its goal of making FDI 5.7 percent of its gross domestic product by 2030, this upswing in foreign capital not only strengthens the Kingdom’s position as a global investment hub but also reinforces the ongoing expansion in GFCF, contributing to sustainable economic growth.  

Saudi Arabia has been advancing a range of initiatives to attract and deepen foreign investment, positioning itself as a hub for international business in the Middle East. 

One such measure, announced in 2021, requires foreign companies bidding for government contracts to establish regional headquarters within the Kingdom by 2024. 

This mandate has already encouraged major firms to set up shops in Riyadh, underscoring the Saudi government’s commitment to drawing long-term investment. 

The Public Investment Fund has also played a critical role in bolstering the investment landscape. 

Recently, PIF signed a memorandum of understanding with Brookfield Asset Management to become an anchor investor in Brookfield Middle East Partners. 

This private equity platform plans to raise $2 billion to invest in various high-growth sectors, such as technology, healthcare, and industrials. Additionally, at least half of BMEP’s capital will be allocated to Saudi-based companies, facilitating FDI inflows directly into the Kingdom. 

Another major win came with BlackRock, the world’s largest asset manager, which recently secured approval to establish a regional headquarters in Riyadh. 

This move is set to expand BlackRock’s Middle East operations significantly, reinforcing Saudi Arabia’ appeal as an investment destination for global financial firms. 


Energy sector drives GCC IPO gains in Q3, positive year-end outlook: PwC 

Updated 54 min 37 sec ago
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Energy sector drives GCC IPO gains in Q3, positive year-end outlook: PwC 

RIYADH: Initial public offerings across the Gulf Cooperation Council region registered a year-on-year increase in proceeds in the third quarter of 2024, despite a decline in the number of listings, according to a new report. 

The energy sector spearheaded this quarter’s growth, led by NMDC Energy’s listing, which raised $877 million — the largest IPO in the UAE this year, stated PwC Middle East. 

Saudi Arabia’s parallel market, Nomu, also contributed to the quarter’s performance, with three listings. 

PwC forecasts strong aftermarket performance for companies completing IPOs in 2024, predicting that most of the top 10 IPOs by deal size will trade above their initial offering prices. 

This outlook suggests a favorable market reception for large IPOs in the coming year, with strong investor demand potentially driving post-IPO stock prices higher. 

“As has been the case in recent years, Q3 has seen relatively few companies come to market. Since the end of the quarter, we have seen a number of IPOs either completed or announced across the GCC, including OQ Exploration and Production, Oman’s largest ever IPO, supporting the positive outlook for the remainder of 2024,” said Muhammad Hassan, capital markets leader at PwC Middle East. 

In the third quarter, bond issuances in the GCC raised $4.4 billion, marking an almost 30 percent increase over the previous year. 

Additionally, $5.2 billion was raised through sukuk issuances, with 88 percent of these bonds listed on the Qatar Stock Exchange or Nasdaq Dubai. 

Governments in the region accounted for nearly 65 percent of total bond and sukuk issuances. 

“Looking forward, the outlook for the GCC IPO market remains positive with a healthy IPO pipeline of companies from a diverse range of sectors busy preparing for their upcoming IPOs across the region,” the report stated. 


Saudi-Portuguese Business Council launches investment regulation initiative to boost trade

Updated 38 min 17 sec ago
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Saudi-Portuguese Business Council launches investment regulation initiative to boost trade

RIYADH: Saudi Arabia and Portugal are aiming to increase awareness of investment regulations in both countries to boost trade thanks to a first-of-its-kind initiative.

Announced by the Federation of Saudi Chambers, the Saudi-Portuguese Business Council signed a memorandum of understanding with Ibrahim Al Howishel Law Firm to facilitate the entry of Portuguese companies into the Kingdom.

The MoU will also encourage regional companies to invest in Portugal by acting as a legal advisor. It will be the first of its kind among Saudi foreign business councils within the federation.

Its objective is to increase the number of international investors in the Kingdom by informing them about the positive developments, regulatory environment, and investment landscape.

Walid Al-Balhan, chairman of the Saudi-Portuguese Business Council, emphasized that the recently signed MoU aligns with Saudi Arabia’s Vision 2030, which aims to attract foreign investment and strengthen international business ties.

He also said the advisor would address investor queries and provide guidance on regulations, building confidence among Portuguese companies looking to enter the Kingdom.

He extended his gratitude to the Federation of Saudi Chambers and relevant government bodies for their support of the council’s initiatives.

Under the agreement, both parties will collaborate with the Kingdom’s authorities to host workshops for Portuguese firms interested in the Saudi market.

These sessions are expected to cover key topics, including the Premium Residency system, foreign investment regulations, and company setup processes, as well as strategic investment opportunities and incentives for firms considering relocating their headquarters to Saudi Arabia.

The agreement also includes cooperative efforts to refine investment procedures for Saudi companies in Portugal, propose incentives for entities from the European country to attract investors within the Kingdom, and provide advisory support for companies in both nations.