INTERVIEW: Sherpas do the heavy lifting at the U20

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Updated 04 October 2020
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INTERVIEW: Sherpas do the heavy lifting at the U20

  • Innovative financing and investments are on every city’s top priority list

Whether helping climbers reach challenging heights or drafting a troublesome passage of a controversial communique, the job of a sherpa is to do the heavy lifting for the main actors in an ambitious venture.

While Abdulmohsen AlGhannem did not have to carry any heavy physical burdens over the past year as sherpa for the U20 track of the G20, when the final communique was issued, it was the culmination of a long period of demanding work. You might almost imagine him planting a flag on top of the final document, like a climber at the summit of Everest.

“It was a year-long process for the Riyadh chairmanship,” he told Arab News. “We had to understand the ecosystem of the G20 as a whole and the U20 within that, and find out what our role was.”

The U20 specializes in urban issues, and it is a comparatively new element in the G20 set-up.

Whereas the G20 in its present form grew out of the global financial crisis of 2009 and the need for a coordinated response to that emergency, and has been performing the role of global economic and financial overseer ever since, the U20 was only established in Buenos Aires in 2018, and continued in Tokyo last year.

Focusing on the world’s great cities was a natural extension of the G20’s work. Around 55 percent of the world’s population lives in cities or big urban conurbations, and they generate nearly 80 percent of global gross domestic product.

At the same time, however, cities also typify many of the most intractable challenges that the world faces today. They consume a disproportionate amount of energy, they are more vulnerable than other areas to climate change issues, and they are the locations of some of the biggest economic inequalities on the planet with all the social problems that accompany that.

In 2020, cities have also been rocked by the COVID-19 pandemic, and have suffered big hits to traditional urban economic life through lockdowns and migration away from centers of infection.

That presented a new set of challenges for Riyadh, which was hosting the U20 under the chairmanship of Fahd Al-Rasheed, and for AlGhannem.

“When you look at it from the perspective of the U20, you see that local governments form the closest form of governance that touches residents’ lives on a daily basis,” AlGhannem said.

The U20 is just one track of a set of “engagement groups” beneath the main G20 apparatus. 

Others deal with specialist areas such as business, science, womens’ and youth issues. 

“Something that we were able to achieve this year that has not been done before in the U20 has been greater collaboration with other engagement groups, and all of these subjects are things that cities deal with on a daily basis. So we are able to understand their priorities as well as ours.


BIO

Born: Riyadh, 1988

Education: Graduate in urban planning, California State University

Career

  • Internship, City of Calabasas, Los Angeles
  • Urban Planner, Royal Commission for Riyadh City
  • U20 Sherpa to G20

“As a young engagement group, there was not a lot of structure to the U20. So part of our time was invested this year in creating some structure. This is something the cities really appreciate. We sit together and exchange technical viewpoints, our experiences, how we tackle our problems, at an experts’ level,” he said.

In addition to the 20 cities representing the G20 members, this year there were 22 other urban centers as invited observers, as well as “knowledge partners” such as the UN Habitat and World Bank and experts from  academia, urban planning and finance.

One of the innovations of the Riyadh U20 was the creation of task forces to coordinate the main thematic subject matter of the event. Even back in February, when the task forces were set up but before the pandemic forced an end to air travel, the task forces were designed to be virtual meetings.

“That was fortunate, but it also coincided with one of our main priorities in the U20, which was to use technology and innovation to share our experiences.”

The task forces were themed along three main lines: Working toward a circular carbon-neutral economy, the need for inclusive prosperity in cities, and the ambition to reach nature-based solutions in urban environments. 

The strategy was to localize the effort toward the UN’s Sustainable Development Goals through innovation and — especially important — to generate the financial resources to do so.

Carbon neutrality is of special interest to Saudi Arabia, where it chimes both with national energy policy and with the strategy of Riyadh, where AlGhannem was an urban planner before the U20 called him in as sherpa.

“Riyadh is planting 7.5 million trees — one per resident — to help with carbon sequestration, which is one of the elements of carbon neutrality. We are supportive of national government aims, of course, but also want to engage with private business and with citizens. The tree-planting program does that.”

He reported good progress in discussions with financial institutions backing the U20 aims, and said that projects such as tree-planting had important benefits for bigger sectors such as infrastructure investment and water projects in an arid city like Riyadh. 

“Innovative financing and investments are on every city’s top priority list. When it comes to money, we are definitely talking to the right people — the G20 leaders of the world’s biggest economies.”

So the job of sherpa, with liaison between multiple U20 participants, task forces and engagement groups, is a time-consuming and demanding one. But in the end it all boils down to the push to the summit after all that preparation is over — the final negotiations and compromises that enable all parties to agree to a communique encapsulating their positions, but which is also inclusive enough to accommodate often wide-ranging views.

It requires a large measure of empathy and diplomacy. 

“The communique for us is the final document that synthesizes everything that we put into it, and we have to have consensus. We have 42 cities, so this can be a difficult task.”

Preparation was crucial. All 42 cities were involved in the process since February, when they were presented with a skeleton of how the final communique should look, and they were kept updated throughout the process.

“Giving the cities clarity on the process makes them your partners in achieving success. That’s why I keep thanking them, because them understanding the process made the job a lot easier to get consensus among them.”

In the end, the U20 was able to claim a record level of agreement in its final communique, with 39 of the 42 cities signing up by the communique deadline.

“It’s a huge success,” AlGhannem said, adding that some cities were distracted this year by climate challenges and — above all ­— the pandemic’s impact. “They wanted to be vigilant about the rate of spread of COVID and they wanted to keep it under control, which is very understandable.”

Now that he has successfully led the U20 to the summit, AlGhannem will resume his role as an urban planner with the Royal Commission — “my dream job” — where there is a very important project to deliver. 

He has been involved in the transit section of the department for urban and strategic planning, which is responsible for the long-awaited opening of the Riyadh Metro, regarded as a crucial element of the city’s ambitious plans to double its population over the next 10 years.

“Having this public transportation will give us the opportunity to increase density around the stations, diversify land use and transform the city from being car to transit-oriented. It’s a big task.”

He will also get involved in the “troika” arrangements for the next G20, where previous G20 presidencies (Japan) work with the current one (Saudi Arabia) to assist the future host: Italy in 2021.

“We will be very supportive. We have invested a lot of time, money, sleepless nights and gallons of coffee to work on this U20, so we will not stop that. We will continue the momentum and support that.”


Saudi Arabia inaugurates Yanbu Grain Terminal to boost food security, trade

Updated 29 sec ago
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Saudi Arabia inaugurates Yanbu Grain Terminal to boost food security, trade

RIYADH: Saudi Arabia has inaugurated the Yanbu Grain Handling Terminal, underscoring the Kingdom’s efforts to strengthen public-private partnerships, enhance agricultural trade, and bolster food security across the region.

The event was attended by Abdulrahman Al-Fadli, minister of environment, water and agriculture, and by various government and private sector officials, according to the Saudi Press Agency.

The Yanbu Grain Handling Terminal will serve both public and private sector importers, and boasts a storage capacity of 156,000 tonnes, including 12 silos with a combined capacity of 96,000 tonnes.

Food security has risen up the agenda in recent years, as countries in the Gulf contend with the impacts of climate change, the consequences of trade-disrupting conflicts such as the Ukraine-Russia war, and interruptions to supply routes through the Red Sea.

In September 2022, in response to these challenges, the Kingdom collaborated with regional partners to launch a food security action plan with an initial funding of $10 billion.

The Yanbu Grain Handling Terminal will be operated by the National Grains Co., a joint venture between the national shipping carrier Bahri and the Saudi Agricultural and Livestock Investment Co.

It features a 650-meter conveyor belt and a discharge rate of 800 tonnes per hour directly from ships, with an annual handling capacity exceeding 3 million tonnes of grain.

According to Bahr’s statement to the Saudi Stock Exchange, the inauguration delay was caused by the inclusion of additional requirements to enhance future operational efficiency, along with the construction of extra infrastructure to accommodate potential future expansions.

The company said that because of this the total project cost rose by 7 percent from the initially allocated SR412.5 million ($109.7 million), though the increase is not deemed significant.

The Yanbu Grain Handling Terminal aims to become a world-class logistics hub, connecting three continents and supporting the Kingdom’s vision for a resilient and efficient agricultural supply chain.

Established in 2020 as a strategic partnership between SALIC and Bahri, the National Grain Co. aims to fulfill the Kingdom’s future feed grain requirements while enhancing its global competitiveness.

It is committed to advancing grain trade, handling, and storage through the Yanbu terminal, strengthening supply chains and ensuring price stability across Saudi Arabia.

SALIC, a Public Investment Fund-owned company, was formed in 2011 to secure food supply for Saudi Arabia through mass production and investment.

When the project was announced in 2020, Al-Fadli, who is also the chairman of SALIC’s board of directors, said: “The project aims to enhance the velocity of the main grain influx to Saudi Arabia and is considered the first regional center for grains in the commercial port of Yanbu.”

 

He added that SALIC relies on the geographical location of the Kingdom and the port infrastructure to enhance food distribution in the region by linking the Kingdom to global grain sources, especially countries where SALIC is investing.

 

A grain delivery service to customers within the Kingdom has been introduced as part of the project, ensuring greater proximity to clients, enhanced customer experience, and improved profitability margins.


UAE’s ADNOC boosts drilling capabilities with 2 new jack-up rigs

Updated 47 min 51 sec ago
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UAE’s ADNOC boosts drilling capabilities with 2 new jack-up rigs

  • ADNOC Drilling will expand its fleet to 142 platforms
  • UAE possesses the sixth-largest crude oil reserves globally

JEDDAH: The Abu Dhabi National Oil Co. has received two new jack-up rigs, reinforcing its position as one of the largest drillship fleet owners globally.

ADNOC Drilling will launch the new rigs by the first quarter of next year, expanding its fleet to 142 platforms. This marks a strong year for the company, showcasing its performance and strategy, according to UAE state news agency WAM.

For over 50 years, ADNOC Drilling has been the exclusive provider of drilling and rig-related services to ADNOC Group under agreed contractual terms, supporting the firm’s upstream operations in exploring and developing oil and gas resources in the UAE.

With most of the Gulf country’s crude oil and gas reserves located in Abu Dhabi, ADNOC oversees the majority of nationwide exploration, appraisal, development, and production activities, which are managed by ADNOC, either independently or in partnership with third parties.

In its analysis of the company’s performance, JPMorgan, a global financial services firm, said: “Since its initial public offering, ADNOC Drilling has proven to be a high-quality, defensive business, consistently meeting and surpassing guidance and expectations. The exceptional performance also reflects positive progress with ADNOC Drilling’s two joint ventures.”

The UAE possesses the sixth-largest crude oil reserves globally, with approximately 107 billion stock tank barrels of proven oil reserves. Since its inception in 1972, ADNOC Drilling has played a crucial role in enabling ADNOC to unlock the country’s oil and gas resources efficiently and reliably, contributing to the nation’s energy sector.

This year, Enersol, a joint venture between Alpha Dhabi Holding and ADNOC Drilling, acquired four oilfield services technology companies, while Turnwell, another business partnership between ADNOC, SLB, and Patterson-UTI, set a record for initial well delivery time, accelerating the development of the UAE’s unconventional energy reserves.

Following its second upward guidance revision this year alongside its third-quarter results, ADNOC Drilling is on track to deliver its best-ever performance in Q4. ADNOC Drilling anticipates at least mid-single-digit expansion as it scales operations, according to WAM.

ADNOC forecasts a rise in drilling activity in the coming years, driven by its commitment to increasing crude oil production capacity by 25 percent, reaching five million barrels per day by 2027.

As the company looks to expand beyond the UAE and explore opportunities in the region, it foresees a growing need to expand its rig fleet to support its strategic growth plans.

The energy giant believes that expanding its rig fleet will enhance its current capabilities in rig hire, drilling, completion services, and associated operations and enable the company to offer unconventional drilling and biogenic well services. This expansion is expected to contribute to increased revenue and profitability.


Terminal 4 at Cairo International Airport to boost Egypt’s aviation and tourism sectors

Updated 23 December 2024
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Terminal 4 at Cairo International Airport to boost Egypt’s aviation and tourism sectors

RIYADH: Egypt is advancing its aviation sector with the ongoing development of Terminal 4 at Cairo International Airport, set to accommodate 30 million passengers annually.

According to a statement from the Cabinet, the “New Republic Air Gateway” project is expected to bolster the country’s tourism goals, improve traveler experiences, and position Egypt as an international aviation hub.

This year, the government announced plans to involve the private sector in airport management, including a global tender for Cairo International.

Egypt’s aviation sector also improved 36 spots to 27th in the 2024 edition of the Air Transport Infrastructure Index, aligning with Vision 2030’s focus on sustainable development, innovation, and global competitiveness.

Prime Minister Mostafa Madbouly, during a meeting at the New Administrative Capital, reviewed progress on the project alongside Minister of Civil Aviation Sameh El-Hefny. The session focused on the terminal’s specifications, implementation strategy, and potential to reshape the African nation’s aviation and tourism landscapes.

“Airport development works come within the framework of presidential directives to upgrade the Egyptian airport system, raise its capacity and improve the level of services provided to passengers,” he said.

At the meeting, Madbouly emphasized the importance of creating world-class facilities to accommodate rising traveler numbers. 

El-Hefny outlined the project’s phased execution, with completion expected within four to five years. He also revealed that negotiations are underway with international firms specializing in airport construction and management to ensure world-class execution. 

The minister emphasized the cutting-edge features of the new terminal, including its ability to initially handle 30 million passengers annually, with expansion potential to 40 million. 

In September 2023, Cairo Airport Co. partnered with Pangiam, a trade and travel technology company, and signed two agreements to develop the new terminal. These deals, focused on enhancing the airport’s operations with advanced technology, include a feasibility study to incorporate emerging technologies and deliver a seamless travel experience.

The terminal will feature a state-of-the-art runway equipped with advanced navigation and lighting technologies that meet international standards. 

Once operational, Terminal 4 is expected to elevate Cairo International Airport’s global status, making it a hub for regional and international travel. 


Saudi banks report 24% profit growth amid strong non-interest income 

Updated 23 December 2024
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Saudi banks report 24% profit growth amid strong non-interest income 

RIYADH: Saudi banks’ aggregate profit reached SR7.7 billion ($2.05 billion) in October, marking a 23.67 percent year-on-year increase, newly released data has revealed. 

According to the Saudi Central Bank, also known as SAMA, these figures represent profits before zakat and taxes. 

Cumulatively, from the beginning of the year to the end of October, banks recorded a total profit of SR73.28 billion, compared to SR64.47 billion during the same period last year. 

The increase in banks’ profits is primarily attributed to a combination of favorable factors that highlight the sector’s strength and ability to adapt.  

The third quarter of 2024 marked a significant turning point, with non-interest income playing a pivotal role.

According to a Fitch Ratings report published in November, strong gains on securities and trading contributed SR1.4 billion to non-interest income, offsetting higher financing impairment charges and helping push combined quarterly profits to SR20 billion.  

This growth followed SAMA’s decision to implement a 50-basis-point interest rate cut in September, which mirrored the US Federal Reserve’s shift toward a more accommodative monetary policy. 

The rising interest rate environment that characterized much of the Gulf region in recent years had previously bolstered bank returns on loans, as higher borrowing costs translated into greater income from financing activities. 

However, this dynamic also increased funding costs, particularly for savings accounts and external liabilities.   

Many Saudi banks navigated these challenges by diversifying their funding sources, tapping into external markets, and issuing a record $13 billion in debt in the first eight months of 2024 to meet growing foreign-currency financing demands, particularly for giga-projects.  

Despite these efforts, deposit growth in the third quarter of 2024 lagged behind earlier quarters, according to Fitch, reflecting the sector’s strategic pivot toward external funding to sustain its expansion.  

The recent shift in monetary policy by the US Federal Reserve, which influences rates in Saudi Arabia due to the riyal’s peg to the dollar, has injected new dynamics into the financial landscape. 

After a period of aggressive rate hikes to combat inflation, the Fed lowered interest rates by 50 basis points in September, followed by successive 25-basis-point cuts in November and December, signaling a focus on boosting economic growth as inflation eased to acceptable levels. 

This policy change benefited Saudi banks by improving the valuation of certain securities, as noted by Fitch, and created a more favorable environment for non-interest income growth. 

Another critical factor underpinning Saudi banks’ profitability has been their robust asset quality and prudent risk management.  

The average impaired financing ratio, according to Fitch Ratings, remained low at 1.5 percent by the end of the third quarter, with provision coverage at a healthy 116 percent.  

This stability reflects the resilience of Saudi banks in managing risks associated with their expanding financing books, which grew by 3.6 percent during the quarter, led by strong performances from banks like Aljazira, Saudi Awwal Bank, and Saudi Investment Bank. 

The sector’s healthy operating environment is supported by the Kingdom’s broader economic stability and strategic investments under Vision 2030, which continue to drive demand for corporate financing. 

While external liabilities and a negative net foreign asset position present challenges, Saudi banks remain well-capitalized, with average Common Equity Tier 1 ratios of 15.6 percent, and are positioned to maintain strong asset quality metrics as they navigate a shifting global monetary landscape. 

The combination of rising non-interest income, strategic funding diversification, and favorable monetary policy shifts underscores the resilience of Saudi Arabia’s banking sector, making it a key player in the region’s economic transformation. 

As SAMA continues to align with global trends, Saudi banks are poised to further strengthen their profitability while maintaining a balanced approach to growth and risk management. 


Saudi Arabia strengthens food security with trout farming breakthrough

Updated 23 December 2024
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Saudi Arabia strengthens food security with trout farming breakthrough

RIYADH: Saudi Arabia’s food security strategy has received a boost with a trout farming project developed through a partnership between King Abdulaziz City for Science and Technology and King Abdulaziz University. 

The initiative, carried out at KACST’s research station in Al-Muzahmiyya Governorate, was supported by the Ministry of Environment, Water, and Agriculture’s National Livestock and Fisheries Development Program. 

The project introduces trout as a species suited for diverse environmental conditions, expanding the availability of fish with high nutritional value. This move aims to address the growing domestic demand for seafood while mitigating potential supply chain disruptions. 

This aligns with Saudi Vision 2030, which set a target of increasing domestic fish production to 600,000 tonnes annually to ensure sustainable food supplies. 

The initiative also supports the National Fisheries Development Program’s goals of optimizing resource use, boosting the sector’s contribution to gross domestic product, achieving seafood self-sufficiency, and diversifying income sources. 

The new project employs a recirculating aquaculture system, which uses less water than traditional methods and reduces the risk of parasites and viral infections that could harm fish. 

These advanced systems also regulate key environmental factors in fish farming, such as temperature, oxygen levels, and nutrition, thereby enhancing aquatic animals health and quality. 

This initiative aligns with the National Laboratory’s ongoing efforts to localize RAS technology using fresh water. 

Trout were farmed and raised from the egg incubation stage to the point where they reached a commercial size of over 1,200 grams. 

This success has encouraged the private sector to adopt the technology across various regions in Saudi Arabia, including Riyadh, Makkah, Al-Baha, and the northern regions. 

Trout and other cold-water river fish were specifically chosen for local farming to meet the growing demand for high-protein, omega-3-rich, and vitamin-packed fish, which are essential for human health. 

In October, the Ministry of Environment, Water, and Agriculture announced that Saudi Arabia’s fisheries and aquaculture production increased by 55.56 percent in 2023, surpassing 140,000 tonnes. This highlights the Kingdom’s commitment to achieving food self-sufficiency and promoting sustainable development. 

The ministry noted that the country has achieved record-breaking production levels in saltwater and inland aquaculture projects, surpassing the 90,000 tonnes recorded in 2021.

Aquaculture in the Kingdom, which began in 1982, has grown substantially, establishing the nation as a leading exporter of white shrimp.