Saudi firm harnesses power from the sun

Private solar firms such as Desert Technologies are helping to establish renewable energy in countries worldwide. (Supplied)
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Updated 14 March 2021
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Saudi firm harnesses power from the sun

  • KSA targets 9.5 GW of renewable energy by 2023
  • Kingdom aims to reduce hydrocarbons reliance

DUBAI: In the past decade, the world has witnessed a pressing need for a major transformation from conventional energy sources to renewables starting with planned efforts in limiting the global temperature from rising to 2.0ºC (3.6˚F) for the present century.

A number of producer economies have recognized the need to diversify their energy production while simultaneously seeking to diversify their economies by putting energy transitions at the heart of their development strategies. Saudi Arabia, the world’s largest oil exporter, has, in turn, experienced an emergence of a solar sector as part of its economic diversification plans under the Kingdom’s Vision 2030.

Saudi businessman Khaled Ahmad Sharbatly, the managing partner of Desert Technologies, which specializes in solar energy, offers insight into how the launch of the solar industry in the Kingdom prompted business development and outlines both the opportunities and barriers for the country’s expansion into “yellow gold.”

In addition to his position in Desert Technologies, Sharbatly, 26, has undertaken courses at the UN, Harvard Business School, Harvard Law, and completed a fellowship from the International Monetary Fund that was only given to 20 people around the world. He holds two posts, one in the Chinese-Saudi Business Council and another in the industrial council of the Jeddah Chamber of Commerce, where he is leading the team for the general overview of sustainable manufacturing that is focused on supporting industries that have been affected by coronavirus (COVID-19) pandemic and how they can have a sustainable recovery.

Having spoken at over 15 international conferences, including the Business Twenty (B20) the official business community engagement forum for the Group of Twenty (G20), the World Future Energy Summit (WFES), Intersolar, and others within the span of two years, Sharbatly describes himself as an active sustainability and renewable energy influencer that promotes sustainable development initiatives within personal and professional environments.

While the Kingdom’s Vision 2030 provides for the transformation of Saudi Aramco into a multi-sectoral industrial powerhouse, private solar firms, such as Desert Technologies, have already sprung with growing expectations about the market, carving their position within the industry with projects in 26 countries worth more than $200 million.

Sharbatly said that his decision to dive into the renewable energy industry was prompted by the Vision 2030 goals of revolutionizing environmental sustainability, which ultimately leads to the capitalization of the growing demand for sustainable investments.

“In 2016, when the initial draft of the Saudi Vision 2030 was released, I took a look at that draft and I saw where our country was heading in the next 15 years,” Sharbatly said.

“I saw that sustainability was a huge component of it. Getting out of fossil fuels and into renewable energy is an area of huge strength for the Kingdom because we are the energy suppliers of the world.

“So if we change from fossil fuels to gas, from gas to hydrogen, from hydrogen to solar or from solar to wind, it would be indifferent as we can build the industry, given that we have the supply chain, the logistics and the full infrastructure for that. It is much more attainable than many other industries, and in terms of logistics, we have two of the largest ports in the red sea, almost 70 percent of the world’s trade goes through us.”

Saudi Arabia’s socio-economic development in recent decades has been driven by oil-and-gas revenues. The vast wealth it pumped out was a major contributor to the government’s budget revenues, paying not only for the glistening skyscrapers but also for a government sector that employs a high percentage of Saudis.

With its vast deserts, the Kingdom is now linking its future to another natural resource it has in even greater abundance: sunlight.

The Saudi government has set a target of generating 9.5 gigawatts (GW) of renewable energy by 2023, which will generate enough electricity to power around 40,000 homes.

“Even though we have an impressive natural potential for solar and wind power, and our local energy consumption will increase threefold by 2030, we still lack a competitive renewable energy sector at present. To build up the sector, we have set ourselves an initial target of generating 9.5 gigawatts of renewable energy,” a Saudi cabinet statement said on the Saudi Vision 2030.

Forming part of the GCC, Saudi Arabia lies within the so-called “global sunbelt” and has some of the highest solar irradiances in the world with over 3,000 hours of sunlight annually. Around 60 percent of the region’s surface area has been found to have a particularly high level of suitability for solar PV deployment, according to the International Renewable Energy Agency (IRENA).

“Currently we work through the company’s factory in Jeddah to collect and market solar panels produced in Saudi Arabia for use in multiple facilities such as schools, exhibitions, mosques, factories, warehouses and soon homes all over the Kingdom to reduce the kilowatt price for companies and individuals,” Sharbatly said.

Representing a firm that is taking advantage of its country's most abundant clean-energy source, Sharbatly said Desert Technologies builds the smart infrastructure of the future, powered by the sun.

“Smart infrastructure is a wide array of products and services to be developed, constructed, or manufactured and that is what we do — we manufacture, we develop and we construct,” Sharbatly said. “We manufacture solar panels, we manufacture power plants, invest in power plants by selling electricity and we construct plants.

“Today, we will invest in smart infrastructures such as utility-scale projects or the regular solar panel projects that can be seen on roofs or grounds. Solar plus battery, solar plus diesel, hybrid systems, and also powering vehicles using renewable energy, because we think there is a huge field where we are trying to be sustainable and buy electric vehicles. But we are powering them using conventional electricity, or we buy energy-efficient refrigerators that save money, which defeats the objective,” Sharbatly said.

Smart infrastructure essentially leverages data and digital connectivity to improve certain functions, including sustainable energy management. That aims to help in achieving a lower carbon footprint through the production of more efficient infrastructure and planning.

“We are trying to power all these products that have already taken a step towards sustainability with real sustainable sources of energy. It is solar today, but in the future, it could be something else as we are flexible and technology agnostic,” Sharbatly said.

“Sustainability is Vision 2030 — how can we build a country that is not dependent on one major source of income but have sustainable development across all sectors such as social, governmental, environmental, commercial, for the future,” Sharbatly said.

“The country’s location and climate mean it has plenty of promising sites for solar and even wind farms.”

The abundance of solar resource potential primarily indicated by its strategic location, accompanied by the recent fall in global oil prices and the falling cost of associated technologies, such as photovoltaic (PV) modules are major factors influencing the appeal of solar energy in the country. The costs of installing and operating such technologies have fallen drastically around the world in recent years, which means that even in a country where oil is copious, renewables still beckon as a cheap and clean alternative to traditional fossil fuels.

“Today solar is around 90 percent cheaper than oil and gas,” Sharbatly said.

“The first step onwards to this transition is hybrid solutions. Hybrid solutions are the first gateway to complete renewable energy or a 100-percent clean energy future. Today we have oil, we have power plants, we have diesel generators and we are not going to replace them as the energy demand is increasing, even if it is at a small rate. It is still increasing and we cannot convince people to throw away investments that they have made and bring something else when they have not made the return yet. This is the world view, not just my view. We have to transition into sustainability and into a sustainable grid powered by sustainable energy sources.”

The initial driver behind the Saudi government’s interest in the use of solar power was its intention to diversify its energy mix towards alternative sources, including renewables in order to preserve domestic energy production for export amid rising domestic consumption of oil for power generation.

“Oil, coal, gas, or any other source of energy will never, at least for the next 100 years, be out of the energy mix,” Sharbatly said. “We will use these fossil fuels to create all sorts of products. That's the true value of fossil fuels — to create value and products, instead of burning them to create electricity. We can make electricity in cheaper, cleaner ways.”

The global population is expected to reach 9.7 billion by 2050, which is a 1.9 billion increase from 2020, according to the UN. Concurrently, as urbanization continues, the proportion of the population living in urban areas will increase to around 66 percent by 2050, up from 30 percent in 1950.

Saudi Arabia’s capital Riyadh will at least double in size from its current population of around 7.5 million people by 2030. The country’s population will reach 45 million by 2050, implying a population increase of about 13.5 million from 2015. Meanwhile, the proportion of the urban population will increase at a dramatically higher rate than other countries, to under 90 percent by 2050, according to the UN Department of Economic and Social Affairs.

This high rate of population growth and urbanization has driven a rise in domestic energy and electricity demand. Peak electricity load in Saudi Arabia, for instance, has been rising by 7 percent every year. Electricity consumption has grown from 186.5 Terawatt hour (TWh) in 2008 to 345.05TWh in 2018, according to International Energy Agency (IEA) data. Further increase in such trends inevitably poses significant questions for sustainability and is anticipated to place unparalleled pressures on energy demand and supply.

In line with these trends, Desert Technologies has started working on the expansion of its factory from 100 MW to 200 MW yearly production, which is indicative of the heightened demand for renewables in the region. In 2021, the company plans to increase its presence within the Middle East and signed four projects by February. Two of the projects are in Saudi Arabia, one is in Bahrain and the one in Egypt is set to be completed by 2022.

The firm’s goals for the next five years echo such expansions, with intentions of accumulating projects in the Middle East and Africa. In Asia, Desert Technologies will be doing up to $3.5 billion of work, with a specific focus on the small to medium scale on-grid and off-grid solutions, according to Sharbatly. It also plans on releasing two other companies, one of which is a development company that will be released as a joint venture.

Furthermore, the firm seeks to grow in Southeast Asia and Latin America to further build its track record. Sharbatly mentioned Japan as a particular country of interest.

“They are very advanced in technology and there is an incredible relationship between Saudi Arabia and Japan,” Sharbatly said. “There is a big presence of Japanese companies, bands and investors in Saudi and vice versa. We are amazed by how advanced they are. Also, we like their work ethic, we like their honesty and culture, all of which we think fits with ours.”

Sharbatly then discussed why renewable energy is not being utilized fully in Saudi Arabia, despite the availability of necessary resources and the challenges associated with such an energy transition.

“To localize an industry is not an easy job and Saudi is trying to start where everyone else has finished,” he said.

“It requires a huge investment in infrastructure, training, building facilities because it is pointless to invest in building power plants or to allow companies to come and bid for building power plants when the jobs they are going to be making as a developer or contractor are short-term jobs. The strategic value in localizing an industry is creating manufacturing industries where there are long-term jobs that require highly skilled people and require universities and highly skilled programs to really support the training of these people. Just like we have excelled in oil and gas, we can excel in this.”

Sharbatly said COVID-19 has delayed the process.

“It needs time — time to build state-of-the-art facilities, to sign with suppliers from around the world and localize the industry,” he said. “The government right now is really focused on health and saving the lives of its people, but hopefully in the upcoming year and in 2022 there will be a lot of very good news on new manufacturing facilities, including ours.”

Another reason such a transition requires time is those energy transition pathways that imply an imminent peak and then a steep drop in oil demand would result in sharply reduced revenues for many countries.

This year’s coronavirus-induced decrease in oil demand and the subsequent impact on prices put this challenge in stark relief. It demonstrates not only the effect a rapid transition would have on the world economy, but also provides an admonitory observation of the future if success is not achieved in the diversification efforts of key producer economies.

Pointing out that once electricity is generated, it cannot be stored, except in limited amounts using batteries, but can be sent long distances across the grid, Sharbatly said: “Storage today is quite competitive, especially from unsubsidized energy. In countries like Saudi or the GCC, storage is very difficult because it is more expensive than the energy you get from the government, while in Africa it is much cheaper.”

The storage of excess energy produced still presents a problem due to limited storage capacities and overproduction that can result in losses. Consequently, one of the main objectives of building sustainable smart infrastructure is to enable the adaptation of energy production to actual demand. This entails the achievement of demand-oriented production that can, with proper infrastructure and planning, allow immediate consumption of produced energy.

The development of different sectors of smart infrastructures, such as smart energy and smart transportation would enable the accumulation of real-world data that can be interconnected for use among different services.

Desert Technologies also plays a role in assisting Saudi Arabia in becoming a renewable-energy exporter and supplier through their major operations in developing and emerging markets that use solar PV panels manufacturing in the country.

For example, Desert Technologies was a co-developer for several solar photovoltaic projects in Benban, Egypt, which is one of the world’s largest solar farms. This includes the ARC Project, which has the capacity to generate 65.7 megawatt (MW) of energy, the Winnergy Project, with a 24.9MW generation capacity and the Arinna Project, with a 24.9MW generation capacity. The electricity generated from these plants is sold to the Egyptian Electricity Transmission Company (EETC) under a 25-year power purchase agreement. Cumulatively, Benban’s fields consist of 6 million panels that produce 1.5 gigawatts (gw) of energy, which is enough to power more than one million homes.

While many countries are now exploring ways to stimulate social and economic growth through the development of the renewable energy sector within their own parameters, Desert Technologies has chosen to target less economically developed countries to promote sustainable economic development.

In 2019, there were 771 million people without electricity access, which was a record low. This was enabled through the use of grid electrification as the primary source of energy access gained since 2000, according to data from World Energy Outlook 2018. Despite such progress, the world remains far from achieving SDG targets to ensure universal access to affordable, reliable and modern energy services by 2030. The population without access to electricity in Sub-Saharan Africa remains at 579 million, amounting to 56 percent of the population.

The manufacturing division at Desert Technologies called “DT Labs” invests in research and development to create new and better solutions. The current areas of infrastructure innovation include the development of solar-powered electric vehicle charging stations and solar street lamps that can provide Wi-Fi and phone charging services. The company is also developing mini-grid systems that reuse lithium-ion batteries, from cars or computers, to build economic and efficient mini-grid and off-grid solar systems in Africa.

The challenges associated with electricity provision in developing countries extend beyond the sphere of private investment and involve difficulties associated with infrastructure. The innovative approaches to solving the problem by Desert Technologies demonstrate how international investments in renewable energy can provide key resources and help in the creation of enabling environments through the provision of sustainable, efficient, and equitable electricity in regions critical to the global climate future.

The oil and gas producers in the Middle East and North Africa region are conscious of the potential adverse impacts of climate change and the impact it will have on their economies, given their current dependence on oil and gas revenues. This makes the way in which the increasing energy demand across the region is met highly significant, and the argument for renewables, particularly solar PV, in obtaining a larger role in the energy mix, even more compelling.

Desert Technologies, with its ambitious projects that are already yielding results throughout the region, serves as one example of how the Kingdom can leverage its abundant resources, domestic expertise and competitive advantage in energy production. Linking energy and industrial transformations to optimize new opportunities will simultaneously position Saudi Arabia in the new energy market.


Global Markets — stocks and dollar dip as Trump’s spending bill passes, trade deal deadline nears

Updated 04 July 2025
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Global Markets — stocks and dollar dip as Trump’s spending bill passes, trade deal deadline nears

LONDON: Stocks slipped on Friday as US President Donald Trump got his signature tax cut bill over the line and attention turned to his July 9 deadline for countries to secure trade deals with the world’s biggest economy.

The dollar also fell against major currencies with US markets already shut for the holiday-shortened week, as traders considered the impact of Trump’s sweeping spending bill which is expected to add an estimated $3.4 trillion to the national debt.

The pan-European STOXX 600 index fell 0.8 percent, driven in part by losses on spirits makers such as Pernod Ricard and Remy Cointreau after China said it would impose duties of up to 34.9 percent on brandy from the EU starting July 5.

US S&P 500 futures edged down 0.6 percent, following a 0.8 percent overnight advance for the cash index to a fresh all-time closing peak. Wall Street is closed on Friday for the Independence Day holiday.

Trump said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on exports to the US, a clear shift from earlier pledges to strike scores of individual deals before a July 9 deadline when tariffs could rise sharply.

Investors are “now just waiting for July 9,” said Tony Sycamore, an analyst at IG, with the market’s lack of optimism for trade deals responsible for some of the equity weakness in export-reliant Asia, particularly Japan and South Korea.

At the same time, investors cheered the surprisingly robust jobs report on Thursday, sending all three of the main US equity indexes climbing in a shortened session.

“The US economy is holding together better than most people expected, which suggests to me that markets can easily continue to do better (from here),” Sycamore said.

Following the close, the House narrowly approved Trump’s signature, 869-page bill, which averts the near-term prospect of a US government default but adds trillions to the national debt to fuel spending on border security and the military.

Trade the key focus in Asia

Trump said he expected “a couple” more trade agreements after announcing a deal with Vietnam on Wednesday to add to framework agreements with China and Britain as the only successes so far.

US Treasury Secretary Scott Bessent said earlier this week that a deal with India is close. However, progress on agreements with Japan and South Korea, once touted by the White House as likely to be among the earliest to be announced, appears to have broken down.

The US dollar index had its worst first half since 1973 as Trump’s chaotic roll-out of sweeping tariffs heightened concerns about the US economy and the safety of Treasuries, but had rallied 0.4 percent on Thursday before retracing some of those gains on Friday.

As of 2:00 p.m. Saudi time it was down 0.1 percent at 96.96.

The euro added 0.2 percent to $1.1773, while sterling held steady at $1.3662.

The US Treasury bond market is closed on Friday for the holiday, but 10-year yields rose 4.7 basis points to 4.34 percent, while the two-year yield jumped 9.3 bps to 3.882 percent.

Gold firmed 0.4 percent to $3,336 per ounce, on track for a weekly gain as investors again sought refuge in safe-haven assets due to concerns over the US’s fiscal position and tariffs.

Brent crude futures fell 64 cents to $68.17 a barrel, while US West Texas Intermediate crude likewise dropped 64 cents to $66.35, as Iran reaffirmed its commitment to nuclear non-proliferation. 


World food prices tick higher in June, led by meat and vegetable oils

Updated 04 July 2025
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World food prices tick higher in June, led by meat and vegetable oils

PARIS: Global food commodity prices edged higher in June, supported by higher meat, vegetable oil and dairy prices, the UN Food and Agriculture Organization has said.

The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 128 points in June, up 0.5 percent from May. The index stood 5.8 percent higher than a year ago, but remained 20.1 percent below its record high in March 2022.

The cereal price index fell 1.5 percent to 107.4 points, now 6.8 percent below a year ago, as global maize prices dropped sharply for a second month. Larger harvests and more export competition from Argentina and Brazil weighed on maize, while barley and sorghum also declined.

Wheat prices, however, rose due to weather concerns in Russia, the EU, and the US.

The vegetable oil price index rose 2.3 percent from May to 155.7 points, now 18.2 percent above its June 2024 level, led by higher palm, rapeseed, and soy oil prices.

Palm oil climbed nearly 5 percent from May on strong import demand, while soy oil was supported by expectations of higher demand from the biofuel sector following announcements of supportive policy measures in Brazil and the US.

Sugar prices dropped 5.2 percent from May to 103.7 points, the lowest since April 2021, reflecting improved supply prospects in Brazil, India, and Thailand.

Meat prices rose to a record 126.0 points, now 6.7 percent above June 2024, with all categories rising except poultry. Bovine meat set a new peak, reflecting tighter supplies from Brazil and strong demand from the US. Poultry prices continued to fall due to abundant Brazilian supplies.

The dairy price index edged up 0.5 percent from May to 154.4 points, marking a 20.7 percent annual increase.

In a separate report, the FAO forecast global cereal production in 2025 at a record 2.925 billion tonnes, 0.5 percent above its previous projection and 2.3 percent above the previous year.

The outlook could be affected by expected hot, dry conditions in parts of the Northern Hemisphere, particularly for maize with plantings almost complete. 


Saudi Arabia posts 4 years of VC growth despite global slowdown: report 

Updated 04 July 2025
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Saudi Arabia posts 4 years of VC growth despite global slowdown: report 

RIYADH: Saudi Arabia achieved four consecutive years of growth in venture capital relative to its economy, a feat unmatched among its peers, according to a new report.

Between 2020 and 2023, the Kingdom was the only large market in the sample to post uninterrupted annual gains in VC intensity, contrasting with the more episodic deal flow seen across Africa and parts of Southeast Asia, MAGNiTT’s recently published Macro Meets VC report stated. 

While 2024 saw a slight contraction in funding amid global tightening, Saudi Arabia’s multi-year upward trend signals a sustained commitment to innovation-led diversification.

The Kingdom is steadily consolidating its position as a model for policy-driven venture capital development in emerging markets as it seeks to diversify its economy in line with the Vision 2030 blueprint. 

“Saudi Arabia is becoming the model for long-term, policy-driven ecosystem building,” the report notes, highlighting that sovereign limited partners and local funds have been instrumental in buffering the Kingdom from some of the volatility that struck other emerging venture markets. 

Saudi Arabia’s policy momentum 

The MAGNiTT data revealed that Saudi Arabia recorded a five-year average VC-to-GDP ratio of 0.07 percent. 

Although this figure remains modest compared to more mature hubs like Singapore, its consistent upward movement underscores the growing depth of domestic capital formation. 

Beyond the headline ratios, the Kingdom’s strategic positioning has also come into sharper focus. Saudi Arabia, along with the UAE, is classified as a “Growth Market”— a designation that reflects not only a sizeable GDP and population but also the rising economic clout of local consumer and enterprise demand. 

With a GDP approaching $950 billion and a population exceeding 33 million, Saudi Arabia presents a significant scale advantage. 

According to MAGNiTT’s benchmarking, this size creates “natural expansion targets for startups moving beyond initial launch markets,” supporting both regional and international founders seeking to diversify beyond smaller ecosystems. 

MENA’s uneven progress 

Across the broader Middle East and North Africa region, venture capital activity has continued to evolve unevenly. 

The UAE has retained its reputation as a strategic innovation hub and one of the few “MEGA Markets” in the emerging world, boasting a five-year average VC-to-GDP ratio of 0.20 percent. 

This proportion — identical to Indonesia’s ratio — signifies robust venture activity relative to the economy’s size. 

Yet, while the UAE maintained this level, Saudi Arabia has seen more consistent growth in funding, a dynamic the report attributes to policy-led market development. 

In Egypt, VC has gained further traction over the period under review. Egypt achieved a 25 percent rise in total funding compared to the previous five-year average, lifting its VC-GDP ratio by 0.02 percentage points to 0.11 percent. 

Although Egypt’s overall economic constraints remain acute — GDP per capita still lags below $10,000 — the relative progress suggests improving investor confidence, particularly in fintech and e-commerce. 

However, the report cautions that deal flow in Egypt, much like in Nigeria, remains fragile and prone to episodic swings driven by a handful of large transactions. 

The macroeconomic context across MENA has also been influential. Elevated oil price volatility and the impact of the Israel–Iran conflict have created a challenging backdrop for policymakers. 

Brent crude surged more than 13 percent in a single day earlier in 2025, underscoring the region’s exposure to external shocks. 

Nevertheless, both Saudi Arabia and the UAE managed to maintain monetary policy stability in line with the US Federal Reserve’s cautious stance. 

Saudi Arabia kept its benchmark rate at 5.5 percent, supported by inflation trending around 2 percent, while the UAE held steady at 4.4 percent. 

These decisions reflected a delicate balance between containing price pressures and supporting economic diversification efforts. 

Overall, MENA’s five-year aggregate venture funding reached $12.52 billion. Although this total remains well below the levels seen in more mature regions, it represents a meaningful share of emerging markets capital. 

MENA also posted the highest deal count relative to its peers in Southeast Asia and Africa over the period, indicating a broader base of early-stage transactions even as late-stage funding remains more limited. 

The report emphasizes that expanding geographic and sectoral reach within MENA will be critical to boosting efficiency metrics. 

“VC remains heavily concentrated in a few sectors and cities,” the report observes, warning that without broader inclusion, capital intensity will struggle to match potential. 

Southeast Asia’s VC benchmark 

Beyond MENA, Southeast Asia’s ecosystem stands out as the most mature among emerging venture markets, driven primarily by Singapore’s exceptional performance. 

Over the 2020–2024 period, Singapore achieved a 5-year average VC-to-GDP ratio of 1.3 percent, surpassing not only all emerging markets but also developed economies such as the US, which registered 0.79 percent, and the UK, with 0.73 percent. 

Even with a 5.4 percent decline in total funding compared to the prior five years and a 0.19 percentage point drop in VC-GDP ratio, Singapore maintained unmatched capital efficiency. 

The report describes the city-state as “a benchmark for capital efficiency in venture ecosystems,” attributing this strength to strong regulatory frameworks, institutional capital participation, and a deep bench of experienced founders and investors. 

Indonesia, Southeast Asia’s largest economy, recorded total VC funding volumes nearly twice as large as Singapore’s over five years, but its relative VC-GDP ratio remained lower at 0.2 percent. 

This dynamic illustrates one of the report’s core findings: venture capital inflows correlate more strongly with GDP per capita than total GDP. 

In Indonesia’s case, while its GDP surpassed $1.2 trillion, GDP per capita hovered around $4,000, constraining purchasing power and, by extension, startup revenue potential. 

Thailand, meanwhile, reported funding gains due mainly to a single mega deal rather than systematic improvements in ecosystem depth. 

In Africa, Nigeria emerged as an unexpected bright spot in 2024, as a single major transaction lifted its VC-GDP ratio to 0.15 percent — the highest in the region for that year. 

However, this outlier result also revealed the episodic nature of capital deployment in developing markets. 

Kenya registered a relatively high five-year VC-GDP ratio of 0.3 percent, even as absolute funding volumes remained modest. 

The report notes that in low-GDP contexts, this ratio can overstate ecosystem maturity. 

South Africa and Egypt showed more modest growth trajectories, weighed down by persistent inflation, structural constraints, and capital scarcity. 

In aggregate, African economies continued to lag both Southeast Asia and MENA in total venture funding and deal velocity. 

Global challenges ahead 

Globally, the five years covered by the report were marked by intensifying volatility. 

High interest rates, trade tensions, and geopolitical uncertainty weighed on capital flows. 

The US Federal Reserve held its policy rate between 4.25 percent and 4.5 percent through mid-2025, citing “meaningful” inflation risks. 

The European Central Bank moved to lower its deposit rate to 2 percent, reflecting cooling inflation but acknowledging sluggish growth. 

The World Bank cut its global GDP forecast for 2025 to 2.3 percent, the weakest pace since the 2008 crisis, excluding recessions. 

These headwinds contributed to the decline in venture capital across most emerging markets in 2024. 

In response, sovereign capital and strategic investors have become increasingly important backstops. 

The report highlights that domestic capital formation in MENA has partially offset declining global risk appetite. 

However, these funds tend to be slower moving, more sector-concentrated, and less risk-tolerant than international investors. 

“Without renewed foreign inflows or regional exit pathways, deal velocity may remain muted into the second half of 2025,” the report warns. 

This environment is likely to force startups to extend runway and compel general partners to adopt more selective deployment strategies. 

Despite the challenges, the outlook for Saudi Arabia and other growth markets remains constructive over the medium term. 

The Kingdom’s policy clarity, deepening institutional capital pools, and Vision 2030 commitments create a foundation for continued expansion. 

As the report concludes: “High GDP markets like KSA and Indonesia trail in VC efficiency — suggesting capital underutilization.” 

Closing this gap between potential and realized funding will be the defining challenge for emerging ecosystems as they navigate a turbulent global landscape.


Oil Updates — crude falls as Iran affirms commitment to nuclear treaty

Updated 04 July 2025
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Oil Updates — crude falls as Iran affirms commitment to nuclear treaty

LONDON: Oil futures fell slightly on Friday after Iran reaffirmed its commitment to nuclear non-proliferation, while major producers from the OPEC+ group are set to agree to raise their output this weekend.

Brent crude futures were down 49 cents, or 0.71 percent, to $68.31 a barrel by 11:31 a.m. Saudi time, while US West Texas Intermediate crude fell 41 cents, or 0.61 percent, to $66.59.

Trade was thinned by the US Independence Day holiday.

US news website Axios reported on Thursday that the US was planning to meet with Iran next week to restart nuclear talks, while Iran Foreign Minister Abbas Araqchi said Tehran remained committed to the nuclear Non-Proliferation Treaty.

The US imposed fresh sanctions targeting Iran’s oil trade on Thursday.

Trump also said on Thursday that he would meet with representatives of Iran “if necessary.”

“Thursday’s news that the US is preparing to resume nuclear talks with Iran, and Araqchi’s clarification that cooperation with the UN atomic agency has not been halted considerably eases the threat of a fresh outbreak of hostilities,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Araqchi made the comments a day after Tehran enacted a law suspending cooperation with the UN nuclear watchdog, the International Atomic Energy Agency.

OPEC+, the world’s largest group of oil producers, is set to announce an increase of 411,000 bpd in production for August as it looks to regain market share, four delegates from the group told Reuters.

Meanwhile, uncertainty over US tariff policies resurfaced as the end of a 90-day pause on higher levy rates approaches.

Washington will start sending letters to countries on Friday specifying what tariff rates they will face on goods sent to the US, a clear shift from earlier pledges to strike scores of individual trade deals.

President Trump told reporters before departing for Iowa on Thursday that the letters would be sent to 10 countries at a time, laying out tariff rates of 20 percent to 30 percent.

Trump’s 90-day pause on higher US tariffs ends on July 9, and several large trading partners have yet to clinch trade deals, including the EU and Japan.

Separately, Barclays said it raised its Brent oil price forecast by $6 to $72 per barrel for 2025 and by $10 to $70 a barrel for 2026 on an improved outlook for demand. 


EV maker Lucid’s quarterly deliveries rise but miss estimates

Updated 03 July 2025
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EV maker Lucid’s quarterly deliveries rise but miss estimates

  • Lucid delivered 3,309 vehicles in the quarter ended June 30

LONDON: Electric automaker Lucid on Wednesday reported a 38 percent rise in second-quarter deliveries, which, however, missed Wall Street expectations amid economic uncertainty.

Demand for Lucid’s pricier luxury EVs have been softer as consumers, pressured by high interest rates, shift toward cheaper hybrid and gasoline-powered cars.

Lucid delivered 3,309 vehicles in the quarter ended June 30, compared with estimates of 3,611 vehicles, according to seven analysts polled by Visible Alpha. It had delivered 2,394 vehicles in the same period last year.

Saudi Arabia-backed Lucid produced 3,863 vehicles in the quarter, missing estimates of 4,305 units, but above the 2,110 vehicles made a year ago.

The company stuck to its annual production target in May, allaying investor worries about manufacturing at a time when several automakers pulled their forecasts due to an uncertain outlook.

US President Donald Trump’s tariff policy has led to a rise in vehicle prices as manufacturers struggle with high material costs, forcing them to reorganize supply chains and produce domestically.

Lucid’s interim CEO, Marc Winterhoff, had said in May that the company was expecting a rise of 8 percent to 15 percent in overall costs due to new tariffs.

The company’s fortunes rest heavily on the success of its newly launched Gravity SUV and the upcoming mid-size car, which targets a $50,000 price point, as it looks to expand its vehicle line and take a larger share of the market.

Deliveries at EV maker Tesla dropped 13.5 percent in the second quarter, dragged down by CEO Elon Musk’s right-wing political stances and an aging vehicle line-up that has turned off some buyers.