Saudi Arabia meeting water scarcity challenge with innovation

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Spanish firm Acciona last year completed the construction of the Al-Khobar I desalination plant in Saudi Arabia, and since Dec. 26, it has produced 210,000 cubic meters of drinking water per day. (Supplied)
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Spanish firm Acciona last year completed the construction of the Al Khobar I desalination plant in Saudi Arabia and since Dec. 26 produces 210,000 cubic meters of drinking water per day, which will supply a population equivalent of 350,000. It is one of the biggest desalination plants in Saudi Arabia in terms of capacity. (Supplied)
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Bruno Sousa, a partner in the Energy Practice at Oliver Wyman. (Supplied)
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Julio de la Rosa, Acciona Middle East director for water solutions. (Supplied)
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Updated 27 January 2021
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Saudi Arabia meeting water scarcity challenge with innovation

  • Kingdom is third biggest consumer per capita in the world, after US and Canada

RIYADH: Saudi Arabia’s National Water Company (NWC) this month signed a $5.36 million two-year contract with a French utilities company to reduce the amount of water lost during the Kingdom’s water production process, known as non-revenue water in the industry.

This is a positive step forward, as a report released late last year by global consultancy firm Oliver Wyman found that while water usage is rising, supply is diminishing. The study estimated that 25 percent of the world’s population lives in areas that suffer extremely high water stress, and by 2050 that portion of the population will more than double.

“With water resources becoming increasingly scarce globally, the Middle East region is addressing the critical issues, with governments increasingly adopting new strategies for balancing their scarce water resources and growing demand for fresh water,” said Bruno Sousa, a partner in the Energy Practice at Oliver Wyman.

“This has led some countries in the Middle East to turn to options such as desalination and treatment, and reuse of wastewater,” he added.

Saudi Arabia is the third biggest consumer of water per capita in the world, after the US and Canada. The Kingdom has implemented a series of measures to rationalize water consumption as part of its Vision 2030 program, with the aim of reducing consumption by 24 percent in 2021 and by up to 43 percent by the end of the decade.

Saudi chemical company SABIC in 2019 committed to reducing its energy consumption, greenhouse gas emissions and water usage intensity by 25 percent by 2025, from 2010 levels.

As part of this drive to address this issue, the Saudi Ministry of Environment, Water and Agriculture has developed a unified water sector reference framework that includes a comprehensive water strategy that integrates national water sector trends, policies, legislation and practices with the main objective of addressing these key challenges and restructuring the sector.

Dr. Ibrahim Aref, director of the rehabilitation of agricultural terraces initiative at the ministry, told Arab News that most of the Arabian Peninsula’s water resources comes from rainfall. Yet, rainfall in the Kingdom, especially in the center of the Arabian Peninsula, is very weak compared to any other place in the world, thus causing water scarcity.

New technology has been developed over the years to minimize the environmental impact of desalination.

Bruno Sousa

Aref pointed out that even though the Arabian Peninsula in general experiences dry seasons that last for two, four or up to seven years, the Kingdom has been blessed with a strong economy and therefore has been able to work on many solutions that might be unusual elsewhere in the world, such as desalination.

According to Oliver Wyman’s Sousa, desalination can be achieved through two main technologies: Thermal and electric.

He told Arab News that thermal technology consists of heating water and collecting the resulting evaporated pure water. “This is a very energy-intensive process, requiring both electricity and thermal energy to heat the water. As part of the process, electricity is also generated that can be injected into the electric grid.

“Electric consists mainly in reverse osmosis, where water is forced through membranes that remove salt ... it is also an energy-intensive process, but only requires electricity to run,” he said.

“Although thermal desalination is still used, reverse osmosis is the mainstream technology, adopted mainly because of lower costs (including with energy) and a higher rate of potable water conversion from seawater,” he added.

Independent of the technology used, Sousa said that the desalination process will result in potable water and a high-concentrated saline effluent (brine), that requires disposal.

“Brine is commonly discharged back to the ocean, in case of seawater desalination, but other applications can be applied, such as use in agriculture in saline-tolerant crops, making building materials, or further treatment can be done to recover valuable products in the brine, including sodium, lithium and bromine.”

Sousa said that new technology has been developed over the years to minimize the environmental impact of desalination.

Spanish firm Acciona last year completed the construction of the Al-Khobar I desalination plant in Saudi Arabia, and since Dec. 26, it has produced 210,000 cubic meters of drinking water per day, which will supply a population of 350,000. It is one of the biggest desalination plants in Saudi Arabia in terms of capacity.

Acciona completed the testing program and the commissioning of the plant remotely through a team in Madrid, using digital twin technology.

According to Julio de la Rosa, Acciona Middle East director for water solutions, a digital twin is a full virtual model of a process, product or service with the capacity to replicate with accuracy what outcome will be obtained under certain conditions.

“This pairing of the virtual and physical worlds allows analysis of data and monitoring of systems to head off problems before they even occur, prevent downtime, develop new opportunities and even plan for the future by using simulations,” he added.

He said that the technology allowed the commissioning of the plant to remain on schedule in spite of the travel restrictions in force because of the pandemic.

“Using advanced machine learning and artificial intelligence, the desalination plant’s start-up equipment, control system programs, water and electrical circuits were tested and put into operation with remote supervision,” la Rosa said.

He believes that artificial intelligence and robotics has a lot of potential applications within the desalination sector. “Perhaps repetitive, checkup or inspection tasks can be developed by robots designed for industrial environments,” he said.

Desalination is not the only way the Kingdom is looking to address the issue of water shortages. One of the largest programs being undertaken by the Ministry of Environment, Water and Agriculture is the rehabilitation of agricultural terraces in the southwest of the Kingdom.

The project aims to increase the efficiency of water use for agricultural purposes and to rely on renewable sources that contribute to food security, rural development and increased productivity of strategic crops.

Aref, who is in charge of the project, said rainfall was the focus of attention. “This is one of the important means in the field of agriculture and water security. We take advantage of every drop that falls from the sky … to make sure that farmers continue to farm and families can live.”

The Oliver Wyman report said that addressing this issue has direct economic benefits and can impact gross domestic product by up to 6 percent, making initiatives such as the Suez and Acciona deals ever more important.


Saudization initiative transforming the workforce and bolstering economic prosperity, experts say 

Updated 26 July 2024
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Saudization initiative transforming the workforce and bolstering economic prosperity, experts say 

  • Latest figures show the number of Saudi nationals working in the private sector in June stood at 2.34 million

RIYADH: The Kingdom’s Saudization initiative is not merely a policy but a transformative strategy aimed at reshaping the national workforce and bolstering economic prosperity.

Also referred to as the Saudi Nationalization Scheme, the policy was implemented by the Ministry of Labour in 2011, requiring Saudi companies to hire a set quota of their country’s citizens.

The Nitaqat aspect of the initiative focuses on increasing the percentage of Saudi citizens working in private enterprise and reduce the employment gap with the public sector.

This aligns closely with the government’s Vision 2030, which seeks to empower nationals and enhance their participation in the private sector, thereby reducing dependence on oil revenue and fostering sustainable economic development.

Saudi-based economist Talat Hafiz highlighted in an interview with Arab News that Nitaqat is one of the most important programs that has enhanced participation in the labor market.

He added: “Nitaqat and Nitaqat Mutawar programs have improved the performance of the labor market through providing appropriate job opportunities for the Saudi national labor force in a safe and attractive working environment.”

Since its launch in 2011, Nitaqat has achieved significant milestones, effectively increasing the number of Saudi nationals in the private sector workforce. The latest figures released by the National Labor Observatory showed the number of Saudi nationals working in the private sector in June stood at 2.34 million – an increase of 16,598 since April.

This success is underscored by the proactive measures taken to support Saudization, including regulatory frameworks that incentivize companies to hire and retain local talent.

As a result, there has been a noticeable shift toward employing Saudi professionals who bring not only technical skills but also a deep understanding of local culture, business practices, and regulatory nuances.

Ahmed Boshnak, partner at Bain and Co., said: “One significant contribution of Saudization is the enhancement of local talent development. Through Saudization, there is a focused effort on education and vocational training programs that align with market needs.”

He added: “This equips Saudi nationals with the necessary skills to participate in various sectors, thus increasing their employment prospects and career advancement opportunities.”

Looking ahead

Saudi Arabia is anticipating a substantial influx of young graduates into the job market, with projections suggesting approximately 5 million new entrants by 2030.

Concurrently, the government aims to create 3 million new jobs in the private sector over the next decade, reinforcing its commitment to sustainable economic growth and reducing unemployment rates.

The benefits of hiring Saudi nationals extend beyond meeting regulatory requirements; they encompass leveraging local expertise to navigate business challenges effectively.

Saudi professionals’ proficiency in Arabic and familiarity with local resources facilitate streamlined operations and enhance organizational agility.

Hafiz said: “Saudi nationals have proven their capabilities in the local labor market because they better understand the culture of the Saudi labor market and they have proven to be very hard workers.”

He added: “I believe in the long run, hiring a Saudi citizen could be more effective and less costly to the businesses since businesses can avoid labor’s cost related to hiring non-Saudis.”

Moreover, integrating Saudi talent into the workforce fosters a sense of national pride and ownership, contributing to a more cohesive and productive corporate environment.

Boshnak said: “Saudization encourages private and public sector collaboration. The initiative requires companies to invest in local talent, promoting policies that support the hiring, training, and retention of Saudi nationals. This not only drives employment but also fosters a culture of inclusivity and sustainability within the workforce, leading to long-term economic stability.”

Complementing regulatory efforts, educational initiatives are pivotal in equipping Saudi youth with the skills necessary to thrive in a rapidly evolving job market.

The Fuel program, a collaboration between the Ministry of Communications and Information Technology, Saudi Digital Academy, and Coursera, exemplifies this commitment.

By offering tailored training in digital skills, the program aims to prepare 100,000 Saudi citizens annually for careers in emerging sectors critical to the Kingdom’s digital transformation.

“MCIT and SDA both have played a major role in enhancing Saudization since Saudi Arabia is shifting to digital economy and high tech, which requires huge numbers of Saudis,” Hafiz added.

Furthermore, the Human Resources Development Fund plays a crucial role in supporting Saudization through comprehensive programs that enhance the employability of Saudi nationals.

These initiatives include training, upskilling, and employment assistance, ensuring a steady supply of qualified talent for the private sector.

By collaborating closely with small and medium enterprises, HRDF has facilitated job creation and enhanced local businesses’ competitiveness across diverse sectors. HRDF aims to support job seekers in the private sector through the fund paying a proportion of the employee’s wages, according to its director general, Turki Al-Jawini.

Ryan Alnesayan, partner at Arthur D. Little, noted that from 2016 to 2023, the number of Saudis working in the private sector increased from 1.7 million to 2.3 million, with women’s participation in the workforce rising from 17 percent to 35.3 percent, surpassing the Saudi Vision 2030 target of 30 percent.

He added: “These figures underscore the Saudization initiative’s role in not just increasing employment but also enhancing the quality and diversity of the workforce, positioning Saudi nationals at the forefront of economic growth and development.”

Businesses also play a pivotal role in advancing Saudization by investing in recruitment strategies, HR training, and employee development initiatives.

Organizations like NADIA Global offer tailored solutions to attract, retain, and develop Saudi talent, thereby enhancing workforce capabilities and organizational resilience.

By prioritizing the development of local talent pools, businesses not only comply with Saudization regulations but also contribute to broader socio-economic objectives aimed at achieving sustainable growth and prosperity.

Hafiz noted: “The role of the regulatory frameworks, such as Nitaqat quotas and other programs, have played a significant role in improving Saudization because they have rewarded businesses who are in compliance with the Saudization programs.”

He added: “For example, HRDF has provided programs and products that allow the provision and exchange of guidance, training and empowerment services efficiently and effectively to increase the stability and development of the workforce in the Saudi labor market.”

Arthur D. Little is driving local talent development through initiatives like AFAQ, dedicated to Saudi nationals. Alnesayan explained, adding: “Our tailored mentorship and coaching programs focus not just on filling positions but on grooming future leaders. The goal is clear: attract and elevate Saudi talents to top-tier roles with specialized skills, setting new benchmarks in various industries.”

As Saudi Arabia continues its journey toward economic diversification and global competitiveness, the empowerment of Saudi nationals through Saudization remains a cornerstone of its strategic vision.

By nurturing a skilled and adaptable workforce, the Kingdom not only mitigates economic dependencies but also positions itself as a hub for innovation, entrepreneurship, and technological advancement in the region.

“The future potential of Saudi nationals in driving innovation and entrepreneurship is incredibly promising. Saudization is not just about increasing employment numbers; it’s about cultivating a generation of skilled, innovative leaders,” Alnesayan added.
 


Startup Wrap – Health, HR, and e-commerce firms eying Saudi expansion after funding rounds

Updated 26 July 2024
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Startup Wrap – Health, HR, and e-commerce firms eying Saudi expansion after funding rounds

CAIRO: Startups from across the region and beyond have set a clear path for Saudi expansion after completing successful funding rounds.

UK-based healthtech startup Bioniq is set to leverage its latest $15 million series B funding round to bolster its presence in Saudi Arabia.  

With a current valuation of $75 million, Bioniq aims to make its personalized supplements based on blood test data and patented algorithms available in key cities in Saudi Arabia as a significant portion of the funding is allocated for the Middle East region. 

“Saudi Arabia is an absolute focus as is the further integration and localization of our offerings,” Vadim Fedotov, CEO and co-founder of Bioniq, told Arab News. 

“Our strategic partnership with Al Borg Diagnostics is pivotal in this effort, enabling us to enhance our reach nationwide and deliver tailored health solutions to the local population,” he added. 

The partnership with Al Borg, a provider of diagnostic health services in the Kingdom, made Bioniq’s blood test panel available in 28 Saudi cities. 

The company plans to embed its solutions within athletic organizations and explore collaborations with governmental health initiatives.  

“Additionally, we have further integrations in the pipeline with Saudi Arabia’s leading medical institutions and medical insurance providers,” he added. 

Bioniq’s expansion in the Middle East does not stop at Saudi Arabia. The company aims to solidify its position as the leading premium personalized supplement brand across the region. 

“Given the dynamic growth of the region, especially in the health and wellbeing sector, a significant portion of our recent funding round will be dedicated to our Middle East expansion including strengthening our local office,” Fedotov said.  

Vadim Fedotov, CEO and co-founder of Bioniq. Supplied

According to the CEO, the expansion strategy includes broadening the firm’s geographical reach and enhancing service offerings such as laboratory testing, client support, and strategic on-site partnerships with top medical and athletic institutions.

The company has also established long-term partnerships with key opinion leaders and public figures in the region, with announcements expected soon. 

The oversubscribed round was led by Principal Investors HV Capital and Unbound, both leading European VCs. Bioniq also aims to utilize the funding to boost its expansion into the US market. 

UAE-based HR tech Ogram raises new funding for Saudi expansion 

UAE-based human resources tech startup Ogram has secured new funding from Oraseya Capital, the venture capital arm of Dubai Integrated Economic Zones Authority, along with Aditum Investment Management and Everywhere VC, to support its expansion plans in Saudi Arabia.  

Founded in 2017 by Karim Kouatly and Shafiq Khartabil, Ogram is a digital staffing marketplace that allows businesses to book and manage staff on-demand.  

The company, which launched in Greece in 2023, previously closed a $3 million series A funding round in 2022. Ogram is also in the process of closing its series B round and potential merger and acquisition activities by the fourth quarter of the year. 

Kemitt expands into Saudi Arabia after new funding round 

Egypt-based e-commerce platform Kemitt has expanded into Saudi Arabia following an undisclosed funding round.  

Founded in 2018 by Mahmoud Fouad, Mohamed Rashwan, and Mohamed Hedayat, Kemitt connects product and furniture designers with consumers and handles manufacturing, overhead, and last-mile logistics. 

The recent funding will be used to enhance the platform’s user interface, scale logistics and customer service operations in Saudi Arabia, diversify its product portfolio, and establish local partnerships. 

Saudi startup TechMal secures $1m in pre-seed funding 

Saudi-based startup TechMal has raised $1 million in a pre-seed investment round led by Al Majidiya Investment Co., along with other investors.  

Established in 2024, TechMal is a micro-consumer finance company licensed by the Central Bank of Saudi Arabia, offering financing solutions for the residential rental sector.  

The company enables tenants to convert annual or semi-annual rental payments into manageable monthly installments through the Ejar platform. 

Pathfinder raises $325m from Silver Rock Group ahead of NASDAQ listing 

UAE-based retail technology solutions provider Pathfinder has secured a $325 million investment from Silver Rock Group ahead of its planned NASDAQ listing.  

Founded in 2000 by Ahmed Hussain, Kristin MacDermott, and Sadique Ahmed, Pathfinder offers solutions to enhance customer engagement and drive business success.  

Silver Rock Group will provide the funding over the next three years, starting in the fourth quarter of 2024, to support the continuous development and global rollout of the RetailGPT platform. 

UAE fintech Mamo secures $3.4m in funding 

UAE-based fintech startup Mamo has closed a $3.4 million funding round with participation from existing investor 4DX Ventures, the Dubai Future District Fund, and Cyfr Capital.  

Co-founded by Asim Janjua, Imad Gharazeddine, and Mohammad El-Saadi, Mamo supports small and medium-sized businesses by consolidating their payment collection, corporate cards, and expense management needs. 

The newly raised capital will be used to expand Mamo’s product offerings within the UAE and support its regional expansion efforts. 

Zyp Technologies secures $1.5m pre-series A funding led by Shorooq Partners 

Pakistan’s mobility startup Zyp Technologies has raised $1.5 million in a pre-series A round led by UAE-based VC fund Shorooq Partners, with participation from existing investor Indus Valley Capital and several angel investors.  

Founded in 2022 by Hassan Khan and Imran Afzal, Zyp Technologies specializes in electric motorcycles designed for deliveries, equipped with advanced fleet management software.  

The funding will enable Zyp Technologies to deploy more than 60 battery swap stations and launch over 1,000 Zyp Utility Motorcycles in Pakistan over the next 12 months. 


Oil Updates – prices set for third weekly decline, pressured by Gaza ceasefire hopes

Updated 26 July 2024
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Oil Updates – prices set for third weekly decline, pressured by Gaza ceasefire hopes

LONDON: Oil prices slipped on Friday and were on track for a third consecutive weekly decline, pressured by muted demand in China and hopes of a Gaza ceasefire deal that could ease Middle East tensions and accompanying supply concerns.

Brent crude futures for September dipped 56 cents to $81.81 a barrel by 2:50 p.m. Saudi time. US West Texas Intermediate crude for September fell 40 cents to $77.88.

For the week, Brent is trading down almost 1 percent while WTI is down more than 2 percent.

Recent data, such as July 20 figures showing that China’s total fuel oil imports dropped 11 percent in the first half of 2024, have raised concern about the wider demand outlook in China.

In the Middle East, hopes of a ceasefire in Gaza have been gaining momentum.

A ceasefire has been the subject of negotiations for months, but US officials believe the parties are closer than ever to an agreement for a six-week ceasefire in exchange for the release by Hamas of female, sick, elderly and wounded hostages.

Oil price declines were capped, however, by threats to production from Canadian wildfires, a large US crude stocks draw and continued hopes of a September cut to US interest rates after strong economic data, said PVM oil analyst Tamas Varga. 


SAMA chief lauds global efforts to contain inflation

Updated 25 July 2024
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SAMA chief lauds global efforts to contain inflation

RIYADH: Saudi Central Bank governor praised the “well-calibrated” monetary policies adopted by global financial institutions to tackle inflation and bolster the resilience of the world economy amid diverse challenges.

Ayman Al-Sayari spoke at a session titled “Global Economic Outlook and Ongoing Challenges” during the third meeting of Finance Ministers and Central Bank Governors of G20 held under the Brazilian presidency, according to statement issued on the apex bank’s X handle.

He presented a comprehensive perspective on global economic challenges and policies.

The top Saudi official stressed the importance of ensuring that the nominal growth rate exceeds the interest rate to mitigate risks to global growth in the near term. This principle advocates for sustaining economic expansion while managing debt dynamics effectively.

Al-Sayari highlighted significant medium-term risks confronting the global economy, including ongoing geopolitical conflicts and trade fragmentation. These factors contribute to uncertainty and potential volatility in the international economic landscape.

Regarding energy transition efforts, he acknowledged the global scale-up of renewable energy usage but expressed concern over increased fossil fuel consumption and carbon emissions in 2023. Al-Sayari cautioned against rushed actions and underscored the need for a balanced approach toward achieving sustainability goals without compromising economic stability.

“We are all for reducing greenhouse gas emissions,” the SAMA chief said.

Al-Sayari identified rising income inequality as a critical issue. He underscored the importance of implementing targeted social benefits and well-designed labor market policies to bridge this gap.


Saudi airline flynas to buy 160 Airbus planes

Updated 25 July 2024
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Saudi airline flynas to buy 160 Airbus planes

  • Deal includes order of 30 wide-body A330neo aircraft and 130 narrow-body A320 family aircraft
  • Head of flynas, Bander Al-Mohanna, said agreement ‘reinforces our determination to establish flynas as a leading global low-cost carrier’

RIYADH: Saudi low-cost airline flynas has signed a deal to purchase 160 Airbus aircraft, doubling the volume of its orders to 280 planes. 

The “landmark agreement,” signed at the UK’s Farnborough International Airshow, includes an order of 30 wide-body A330neo aircraft and 130 narrow-body A320 family aircraft, the carrier said in a statement.

This falls in line with the Saudi Vision 2030 aimed at transforming the aviation sector and supporting flynas’ ambitious expansion under the slogan “We connect the world to the Kingdom.” It also cements the carrier’s status as one of the top four low-cost airlines worldwide.

The deal also aligns well with the Kingdom’s aviation goals, including tripling annual passengers to 330 million, expanding connectivity to over 250 destinations, and boosting air freight capacity to 4.5 million tons of cargo per annum by 2030.

“I congratulate flynas on this significant agreement, which reflects the rapid development and transformation of Saudi Arabia’s aviation sector under Vision 2030,” President of the General Authority of Civil Aviation Abdulaziz Al-Duailej said. 

“This deal is pivotal for achieving the National Civil Aviation Strategy’s goal to connect the Kingdom with over 250 international destinations and increase passenger traffic to 330 million annually by 2030,” he added, also describing the growth and expansion of flynas as “truly remarkable.”

Bander Al-Mohanna, CEO and managing director of flynas, said: “This agreement to purchase 160 Airbus aircraft reinforces our determination to establish flynas as a leading global low-cost carrier.”

He added that this is his firm’s first order for the wide-body A330neo with Airbus, with deliveries starting in 2027.

“By doubling our order volume to 280 Airbus aircraft, we ensure sustainable growth across our network of regional and international routes, spanning short, medium, and long-haul flights,” said the CEO, explaining that that this will enable the carrier to explore new long-haul markets and offer more seat capacity, with diverse and innovative products to their passengers.

Airbus CEO of Commercial Aircraft Christian Scherer described thee deal as “a significant milestone” for both A320neo and A330-900 aircraft.

“The A330neo will allow flynas to further grow into widebody markets by building on the A320, benefiting from Airbus’ unique commonality,” Scherer said. 

“Both aircraft types offer flynas the perfect versatility and economics to expand into new markets while offering their passengers the latest cabin experience and comfort,” he added. “We look forward to continuing our successful collaboration with flynas as they embark on this exciting new chapter.”

Earlier this month, flynas received its 53rd A320neo aircraft out of an order of 120 from Airbus as part of its strategic expansion plan. 

The next-generation model airplane touched down at King Khalid International Airport in Riyadh at the time, further consolidating the company’s position as the leading low-cost airline in the Middle East and one of the top four low-cost airlines globally, according to UK-based consultancy firm Skytrax.