RIYADH: Turkish construction giant Yuksel Insaat has won a SR2.29 billion ‘Riyadh Rapid Bus Transit System’ (BRT) project, which is part of the impressive King Abdulaziz Transport System plan.
Ar-Riyadh Development Authority (ADA) has awarded the contract to Yuksel, while the local Alinma Bank has extended SR872 million project financing facility to implement project.
Yuksel has received the letter of intent.
“The project mainly includes road rehabilitation schemes, construction of 21 pairs of Bus Rapid Transit System Stations, 2574 community bus stops and 7 pedestrian bridges in the Saudi capital city,” said Ahmet Halavuk, Yuksel’s general manager.
As is typical of the BRT systems, he said that the new line would allow rush-hour buses to travel in bus-only lanes specifically highway shoulder lanes with the aim of reducing traffic period and easing the time of commute.
Ahmet said that the BRT would be an efficient, high capacity, and cost effective transit solution that many global cities are using at the moment.
Through the utilization of exclusive lanes, off-board fare payment and platform level boarding; well-planned and delivered BRT systems with clean buses can provide metro-quality service at a fraction of the cost.
This will be generating enormous shift from private car to public transportation systems, explained Ahmet, who has taking keen interest in promoting Saudi-Turkish harmonious bilateral relations.
Arab News caught up with Ahmet to know more about new project, Yuksel’s other projects in Saudi Arabia and GCC countries as well as the company’s pioneering role in constructions of dams and implementation of key infrastructure projects across the length and breadth of the country.
Here are the excerpts
of the interview:
Q: Many congratulations for winning the SR2.29 billion prestigious BRT project from ADA. How confident you are to implement this project?
A: We are quite confident and we will complete and deliver it on time.
According to ENR (Engineering News Record) rankings, Turkish contractors has big share in the world in which Yüksel is also listed.
With high quality commitment capability and massive experience in the international construction market, we are always encouraging Turkish contractors to invest in Saudi Arabia considering its market stability and long term infrastructure and housing projects as well as we are also trying to increase our market share.
As being Saudi-Turkish contractor with our experience exceeding 30 years in the Saudi market, we play a key role in business between the two countries.
In fact, Yuksel name is well known with its quality and on time construction ability in the Saudi construction market.
Our strong name has an added value to help us on implementation of this prestigious project.
We have already mobilized workers and in fact the workers’ mobilization has been started before the project was even formally awarded to us. So we are committed to successfully execute this significant project.
Q: Yuksel has been playing a pioneering role in the construction sector of the Kingdom. On the other hand, your company and you in person have evinced keen interest to promote Saudi-Turkish ties. What is your perception about the relations between the two countries now?
A: Engineers are uniquely qualified to be managers and leaders, in large part because they understand systems-thinking so well.
Once you understand that organizations are simply systems of people, then you’ve got it made.
This is what I do with the company and with Saudi agencies.
Recently, the number of tourists visiting Turkey from Saudi Arabia recorded an increase by 30 percent.
I understand that once Saudis become fully aware of the historical and cultural beauties of Turkey as well as the hospitable nature of our people, the people-to-people interaction will grow by manifold.
In the meantime, we know that Saudi citizens are investing in Turkey mainly in real estate sector by having land and apartments in Istanbul, Bursa, Trabzon etc.
On the other hand, Saudi companies are also investing in agriculture and energy sectors in Turkey.
So, we believe that by knowing each other Saudi-Turkish relations will become much stronger.
Q: I would like to know the specifics of the BRT project, as it will change the landscape of the capital city. What is the strategy and how do you plan to handle this key project— the third phase of Riyadh Bus Rapid Transit System (BRT)?
A: Thank you. Yes, indeed it is a key project. With a manpower of more than 300 members at the initial stage, we aim to consolidate our position as the time progresses providing value based qualified services, because it is an important project for the city, which will end its traffic congestion and ensure smooth traffic in the capital and can attract more favorable economic impact for the city.
We are very much hopeful to finish it well on time.
The project, once implemented, will alleviate the sufferings of daily commuters.
Bus and Metro transport, which is connected to each other logistically as there is huge congestion on busy roads, will help to solve the traffic problems which will be compounder further with the consistent growth of Riyadh city.
We wish to complete the BRT project in the given period of time.
Q: What is the time frame to complete the BRT project ? Don’t you think it is very short time, keeping in view the value, the scope of work and the technical skills required for the project?
A: It is 24 months’ period and Insha’Allah we will finish this task for this premium transport system for Riyadh city on time.
We are planning to add 4,500 employees in addition to available 3,500 work force of the company to complete the ambitious transport plan on time.
Q: Besides this BRT system, are there some other projects currently being executed by Yuksel?
A: Yes, there are flyover and bridge projects for smooth traffic system and the progress has reached about 50 percent.
It will be completed by May 2016,
which is also on time.
Moreover, we have one pipeline project for the Ministry of Water valued at SR610 million and an infrastructure project for Dammam University, which is worth SR350 million.
We are also executing infrastructure project in King Faisal University which is worth SR245 million.
We also have four renovation projects for hospital development, including in Al-Kharj and Al-Ahsa worth around SR430 million.
Furthermore, we have almost completed SR220 million desalination plants in the Kingdom and a major SR550 million project to develop King Khalid Air Base with an American company.
This is in addition to the ongoing SR630 million project of Riyadh governorate.
Q: In all, how many projects Yuksel has so far implemented in Saudi Arabia? What will be the cumulative value of all these projects?
A: The number of projects we have finished so far is 39 worth SR8.12 billion.
We are eyeing more projects in Saudi market and the Gulf market at the moment.
We started working in the Kingdom way back in 1983.
In fact, our technical capabilities, our on-time performance, our manpower strength and eventually delivery of projects in stipulated timeframe have impressed our valuable clients not only in Saudi Arabia, rather across the globe.
Q: Is Yuksel working to cut reliance on foreign workers and provide more employment to Saudis? How far you are following the Nitaqat program guidelines?
A: Yuksel is probably one of the few companies enjoying platinum level of acceptance as per Nitaqat guidelines.
We rank highest in terms of Saudization.
We will be hiring about 400 Saudi nationals for the BRT project alone.
We are working with more focus on Saudization program and at the core of it is our training of the Saudi youth and employing them as per Nitaqat guidelines.
Our motto is expansion in the Kingdom within the framework and the guidelines of the Saudization program including inclusive growth for citizens of this country.
We have made professional arrangements to fulfill this aspiration.
We have issued necessary instructions to our HR department to recruit suitable Saudi youth as per the norms.
Q: Besides Saudi Arabia, is Yuksel also working in other GCC countries? Which are the major projects, you have undertaken in those countries?
A: Yes, We are also working in other GCC countries on several projects including AED795 million infrastructure development projects in Abu Dhabi as well as highway and metro projects in Qatar and Oman.
In Qatar, we are executing a part of Doha metro worth QR2.38 billion and construction of a part of Lusail development project worth QR1.67 billion.
In Oman, we have started two road projects worth $220.8 million and negotiating on third project. So we have our presence in all the GCC countries.
We are also looking at some projects in Bahrain at the moment.
Q: As a major Turkish company, what kind of projects you are currently doing in Turkey and in adjoining countries?
A: In fact, Yuksel has been a market leader in terms of building dams, marine structures, transport systems and executing industrial projects across the globe including Turkey.
Recently, Yuksel signed contract concerning the construction of TANAP (Trans-Anatolia Natural Gas Pipeline Project), one of the largest energy infrastructure projects in Turkey.
The second of the first three packages of the tender for the pipeline to carry Azerbaijani natural gas to Turkey will be carried out by a consortium comprising Sicim (Italy), Yuksel (Turkey) and Akkord (Azerbaijan).
The scope of the $540 million contract covers the construction of a 450 km-long pipeline 56 inches in diameter.
The project is planned to be completed in 36 months. Starting at the Georgian border and running through Turkey transversely on an east-west axis, the TANAP will be connected to the TAP (Trans Adriatic Pipeline) on the Greek border.
Around 1,900 km in length, this pipeline is the largest-scale pipeline project of Turkey.
The first gas flow through the TANAP will take place in 2018.The aim is to gradually increase the annual capacity from 16 billion m3 in 2020 gradually to 23 billion and 31 billion m3 by 2026.
Q: Can you please brief me on your CSR part? Has Yuksel tied up with some charitable or social organizations to do community works?
A: As the Corporate Social Responsibility or CSR aims to embrace responsibility for corporate actions and to encourage a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others, we too are equally engaged in such activities.
We are also closely working with Turkish embassy on such initiatives as and when needed.
Like when there was a typhoon in Philippines, we have responded with some help to the devastated section.
Moreover, we wholeheartedly contributed during the series of quakes that devastated lives and properties in Nepal.
We are also participating with some charitable organizations and donate handsomely.
Yuksel wins Riyadh’s SR2.29bn rapid bus transit system deal
Yuksel wins Riyadh’s SR2.29bn rapid bus transit system deal
Saudi PIF on track to reach $2tn in AuM, 2nd-largest globally by 2030
RIYADH: Saudi Arabia’s Public Investment Fund is set to be ranked second among the world’s sovereign wealth bodies by 2030 with $2 trillion in assets under management, according to monitoring organization Global SWF.
A report from the firm forecasts PIF will more than double its current AuM value of $925 billion by the end of the decade, and rise from its 2024 ranking of sixth among global state-owned investor funds.
According to projections from the institute, PIF’s AuM in 2030 will represent 10.5 percent of the global sovereign wealth funds’ total assets, which are set to reach $19 trillion, as it rises from sixth place
Diego Lopez, founder and managing director at Global SWF, said: “Capital attracts capital — so international financial institutions are attracted in partnering with a player with such a huge balance sheet and role in the economic development.”
According to the report, to achieve its ambitious goal of reaching $2 trillion by 2030, the PIF will depend on a combination of strategies. These include oil revenue allocations, which refer to the portion of the Kingdom’s oil earnings transferred to the PIF, debt issuance, and returns generated from its investments.
“Saudi Arabia needs to make its capital base sustainable, diversified and resilient to lower levels of oil prices,” Lopez told Arab News.
“That means raising debt, as PIF has been doing, and eventually raising equity through subsidiaries that can act as asset managers — we see this working very well in Abu Dhabi with Mubadala Capital, Lunate, etc,” he added.
According to the report, the PIF’s 10-year annualized return from 2013 to 2022 stood at 6.9 percent, outperforming the sovereign wealth fund average of 5.7 percent annually.
In 2024, the global economy showed resilience despite geopolitical risks and market uncertainties, with global GDP growth projected at 3.2 percent, slightly improving to 3.3 percent in 2025, according to the OECD.
The International Monetary Fund forecasts a subdued five-year outlook of 3.1 percent, reflecting weaker growth in China, Latin America, and the EU. Developed markets are facing slower growth due to tightening monetary policies, while developing economies maintain greater stability.
Central banks, led by the US Federal Reserve, began easing rates in 2024, responding to reduced inflationary pressures. According to the report, as the global economy adapts, sovereign wealth funds are increasingly focused on capital preservation and stimulating foreign direct investment, with those in the Middle East and North Africa region entering a new phase of growth.
Saudi Arabia offers robust economic expansion fueled by diversification initiatives and ambitious mega-projects like NEOM, the Red Sea Project, and Qiddiya.
PIF’s investments are strategically positioned to capitalize on these high-growth areas, making it a gateway for investors seeking exposure to dynamic emerging market opportunities.
GCC sees greater international attention
According to the report, global sovereign wealth funds have, for the first time, surpassed $13 trillion in assets under management, with capital heavily concentrated in two key regions — the Gulf Cooperation Council, holding 38 percent of the total, and Southeast Asia at 10 percent.
Interest in these powerful global investors remains strong, the report said, drawing heightened international attention to the GCC, a region with fewer than 60 million residents.
Previously named the “Region of the Year” by Global SWF, the GCC has seen a wave of global asset managers and bankers establishing local offices to capitalize on burgeoning opportunities. According to the report, the GCC-Southeast Asia axis is expected to continue driving growth across the sovereign wealth landscape.
PIF represented 7.11 percent of MENA’s sovereign wealth funds’ AuM, with assets totaling $925 billion.
Leading the rankings is Abu Dhabi Investment Authority at $1.11 trillion, followed by Kuwait Investment Authority with $969 billion.
Global sovereign wealth fund investments totaled $136.1 billion across 358 transactions in 2024. The “Oil Five” — ADIA, ADQ, PIF, QIA, and Mubadala — maintained their dominance, together accounting for 60 percent of the total investment value, amounting to $82 billion. As a result, they secured positions among the top 19 dealmakers of the year.
This marks a significant rise from $74 billion in both 2023 and 2022, $41 billion in 2021, $39 billion in 2020, and $28 billion in 2019, reflecting the accelerating investment momentum of these sovereign wealth giants.
While some Gulf sovereign wealth funds leaned toward emerging markets, including their domestic economies, developed markets remained the dominant choice for most global sovereign investors.
Saudi Arabia’s PIF, Abu Dhabi’s ADQ, and Qatar’s QIA exhibited a preference for emerging markets, reflecting their strategic focus on regional and high-growth economies.
PIF investments
According to the report, a significant factor driving the PIF’s growth is its projected boost in domestic spending to $70 billion annually by 2025.
The fund’s investment strategy is focused on high-growth sectors, including infrastructure, digitalization, AI, and renewable energy.
Among the top 15 largest global investments by sovereign wealth funds in 2024 was PIF’s $3 billion acquisition of a 51 percent stake in Saudi Arabia’s TAWAL and $2.16 billion of a 40 percent stake in Selfridges in the UK.
Other significant investments for the PIF include a 15 percent stake in Heathrow Airport for $1.8 billion.
According to the institute, the largest deals are consistently pursued by a select group of funds known for their substantial firepower and risk appetite. This group includes the top 10 spenders, with the GCC’s “Big 5” leading the way.
Mubadala emerged as the leading sovereign investor in 2024, deploying $29.2 billion across 52 deals, a 67 percent increase from the previous year. It was followed by GIC at $26.6 billion, CPP with $21.1 billion, PIF at $19.9 billion, and ADIA at $17.1 billion.
PIF has also ventured into artificial intelligence and space, co-investing in Databricks and launching Neo Space Group to advance Saudi Arabia’s satellite industry.
These initiatives reflect the fund’s commitment to positioning Saudi Arabia as a leader in global digital and technological innovation.
PIF saw a 24 percent decline in its US equity portfolio, the report said. At the beginning of 2024, the fund sold shares in 18 companies worth nearly $13 billion, including pandemic-era investments like gaming giant Activision Blizzard, cruise leader Carnival, and entertainment company Live Nation, which yielded strong returns.
According to Lopez: “The sale of the listed equities was about monetizing a huge upside from their purchase during covid, rather than about decreasing the overseas portfolio.”
The expert noted the importance to recognize that while PIF’s domestic portfolio may be growing relative to its international holdings, the overall assets under management continue to expand, with significant investments being made outside the Kingdom.
PIF has also made significant investments in the electric vehicle sector, despite facing challenges with earlier ventures.
In 2019, PIF divested from Tesla but doubled down on Lucid Motors, placing a major bet on the EV manufacturer.
This strategic move has required substantial funding, including $2.8 billion in 2024 alone. Despite the financial commitment, PIF remains focused on its long-term vision for Saudi Arabia, supporting Lucid’s growth with a manufacturing facility in King Abdullah Economic City.
In January, Lucid Motors became the first global automotive company to join the Kingdom’s “Made in Saudi” program, reinforcing the country’s push to strengthen its industrial capabilities.
The program also supports Vision 2030’s goals of attracting investments, boosting non-oil exports, and creating sustainable jobs, while positioning Saudi Arabia as a hub for innovation and manufacturing in the EV sector.
PIF’s debt financing
On Jan. 6, PIF announced the completion of its inaugural $7 billion murabaha credit facility, supported by a syndicate of 20 international and regional financial institutions.
This Shariah-compliant financing structure is part of the fund’s medium-term capital raising strategy, aimed at diversifying its funding sources to support transformative investments both globally and within Saudi Arabia.
According to another report published by Global SWF in January, PIF’s use of debt financing mirrors a growing trend among sovereign wealth funds and public pension funds, which have raised around $700 billion over the past two decades.
Despite strong credit ratings from Moody’s and Fitch, PIF faces pressure from surging domestic investment in giga-projects like NEOM and Qiddiya, with annual funding needs expected to rise from $40 billion in 2023 to $70 billion by 2025.
Sustaining investor confidence will depend on its ability to manage financial obligations and execute Vision 2030 goals.
While markets currently support PIF’s sovereign-backed debt, delays or disruptions could strain resources and affect its ambitious agenda, making its financing strategy critical for both national economic transformation and global sovereign investment trends.
However, PIF’s diversified funding strategy, coupled with its ability to attract global partnerships, positions it as a transformative force capable of reshaping Saudi Arabia’s economic future and reinforcing its role as a leading driver of global investment innovation.
Oil Updates — crude jumps on concerns about more sanctions on Russia and Iran
LONDON: Oil prices surged on Friday and were on track for a third straight week of gains as traders focused on potential supply disruptions from more sanctions on Russia and Iran.
Brent crude futures gained $2.50, or 3.3 percent, to $79.42 a barrel by 3:48 p.m. Saudi time, reaching their highest in more than three months. US West Texas Intermediate crude futures advanced $2.39, or 3.2 percent, to $76.31.
“There are several drivers today. Longer term, the market is focused on the prospect for additional sanctions,” said Ole Hansen, head of commodity strategy at Saxo Bank. “Short term, the weather is very cold across the US, driving up demand for fuels.”
Ahead of US President-elect Donald Trump’s inauguration on Jan. 20, expectations are mounting over potential supply disruptions from tighter sanctions against Iran and Russia while oil stockpiles remain low.
This could materialize even earlier, with US President Joe Biden expected to announce new sanctions targeting Russia’s economy before Trump takes office. A key target of sanctions so far has been Russia’s oil industry.
The US weather bureau expects central and eastern parts of the country to experience below-average temperatures. Many regions in Europe have also been hit by extreme cold and are likely to continue to experience a colder than usual start to the year, which JPMorgan analysts expect to boost demand.
“We anticipate a significant year-over-year increase in global oil demand of 1.6 million barrels a day in the first quarter of 2025, primarily boosted by ... demand for heating oil, kerosene and LPG,” they said in a note on Friday.
Meanwhile, the premium on the front-month Brent contract over the six-month contract reached its widest since August this week, potentially indicating supply tightness at a time of rising demand.
Inflation worries are also delivering a boost to crude oil prices, said Saxo Bank’s Hansen. Investors are growing concerned about Trump’s planned tariffs, which could drive inflation higher. A popular trade to hedge against rising consumer prices is through buying oil futures.
Oil prices have rallied despite the US dollar strengthening for six straight weeks, making crude oil more expensive outside the US.
SABIC, Almarai, SEC able to absorb fuel price hike: S&P Global
RIYADH: Major Saudi companies, including chemical company SABIC, dairy firm Almarai, and Saudi Electric Co., are well-positioned to handle the impact of higher fuel and feedstock prices introduced on Jan. 1, according to a new report.
Released by capital market economy firm S&P Global, the analysis reveals that those corporates will be able to absorb the marginal increase in production costs by further improving operational efficiencies as well as potentially via pass-through mechanisms.
This came after Saudi Aramco increased diesel prices in the Kingdom to SR1.66 ($0.44) per liter, effective Jan. 1, marking a 44.3 percent rise compared to the start of 2024. The company has kept gasoline prices unchanged, with Gasoline 91 priced at SR2.18 per liter and Gasoline 93 at SR2.33 per liter.
Despite the hike, diesel prices in Saudi Arabia remain lower than those in many neighboring Arab countries. In the UAE and Qatar, a liter of diesel is priced at $0.73 and $0.56, respectively, while in Bahrain and Kuwait, it costs $0.42 and $0.39 per liter.
“For SABIC and Almarai, the increase in feedstock prices will not affect profitability significantly. In the case of utility company, SEC, additional support will likely come from the government if needed,” the report said.
The capital market economy firm projects that SABIC will continue to outperform global peers on profitability.
“We don’t expect the rise in feedstock and fuel prices to materially affect profitability, since the company estimates it will increase its cost of sales by only 0.2 percent,” the report said.
It further highlighted that SABIC is considered a government-related entity with a high possibility of receiving support when needed.
The report also underlines that Almarai anticipates an additional SR200 million in costs for 2025, driven by higher fuel prices and the indirect effects of increased expenses across other areas of its supply chain.
“We believe Almarai will continue focusing on business efficiency, cost optimization, and other initiatives to mitigate these impacts,” the release stressed.
With regards to SEC, S&P said that an unrestricted and uncapped balancing account provides a mechanism for government support, including related to the higher fuel costs.
“We believe any increased fuel cost will be covered by this balancing account,” the report said.
The study further highlights that the marginal increase “could significantly affect wider Saudi corporations’ profit margins and competitiveness.”
The S&P data also suggests that additional costs will be reflected in companies’ financials from the first quarter of 2025.
“Saudi Arabia is continuing its significant and rapid transformation under the country’s Vision 2030 program. We expect an acceleration of investments to diversify the Saudi economy away from its reliance on the upstream hydrocarbon sector,” the report said.
“The sheer scale of projects — estimated at more than $1 trillion in total — suggests large funding requirements. Higher feedstock and fuel prices would help reduce subsidy costs for the government, with those savings potentially redeployed to Vision 2030 projects,” it added.
Lenovo to produce ‘Saudi Made’ PCs by 2026 following $2bn Alat deal closure
RIYADH: Chinese tech giant Lenovo is set to manufacture millions of computer devices in Saudi Arabia by 2026, following the completion of a $2 billion investment deal with Alat, a subsidiary of the Public Investment Fund.
First announced in May, the partnership has now received shareholder and regulatory approvals, paving the way for Lenovo to establish a regional headquarters and a manufacturing facility in the Kingdom.
The deal marks a significant step in aligning Lenovo’s growth ambitions with Saudi Arabia’s Vision 2030 goals of economic diversification, innovation, and job creation, the company said in a press release.
The factory will manufacture millions of PCs and servers every year using local research and development teams for fully end-to-end “Saudi Made” products and is expected to begin production by 2026, it added.
“Through this powerful strategic collaboration and investment, Lenovo will have significant resources and financial flexibility to further accelerate our transformation and grow our business by capitalizing on the incredible growth momentum in KSA and the wider MEA region,” Yang said.
He added: “We are excited to have Alat as our long-term strategic partner and are confident that our world-class supply chain, technology, and manufacturing capabilities will benefit KSA as it drives its Vision 2030 goals of economic diversification, industrial development, innovation, and job creation.”
Amit Midha, CEO of Alat, underscored the significance of the partnership for both Lenovo and the Kingdom.
“We are incredibly proud to become a strategic investor in Lenovo and partner with them on their continued journey as a leading global technology company,” said Midha.
“With the establishment of a regional headquarters in Riyadh and a world-class manufacturing hub, powered by clean energy, in the Kingdom of Saudi Arabia, we expect the Lenovo team to further their potential across the MEA region,” he added.
The partnership is expected to generate thousands of jobs, strengthen the region’s technological infrastructure, and attract further investment into the Middle East and Africa, according to the press release.
In May, Lenovo raised $1.15 billion through the issuance of warrants to support its future growth plans. The initiative, which was fully subscribed by investors, signals confidence in Lenovo’s strategic approach and its plans for global expansion.
The investment deal was advised by Citi and Cleary Gottlieb Steen & Hamilton for Lenovo, while Morgan Stanley and Latham & Watkins represented Alat.
Lebanon’s bonds climb as parliament elects first president since 2022
LONDON: Lebanon’s government bonds extended a three-month long rally on Thursday as its parliament voted in a new head of state for the crisis-ravaged country for the first time since 2022.
Lebanese lawmakers elected army chief Joseph Aoun as president. It came after the failure of 12 previous attempts to pick a president and the move boosts hopes that Lebanon might finally be able to start addressing its dire economic woes.
Lebanon’s battered bonds have almost trebled in value since September when the regional conflict with Israel weakened Lebanese armed group Hezbollah, long viewed as an obstacle to overcoming the country’s political paralysis.
Most of Lebanon’s international bonds, which have been in default since 2020, rallied after Aoun’s victory was announced to stand between 0.8 and 0.9 cents higher on the day and at nearly 16 cents on the dollar.
They have also risen almost every day since late December, although they remain some of the lowest priced government bonds in the world, reflecting the scale of Lebanon’s difficulties.
With its economy still reeling from a devastating financial collapse in 2019, Lebanon is in dire need of international support to rebuild from the war, which the World Bank estimates to have cost the country $8.5 billion.
