Sudan PM hopes to settle $60bn foreign debt this year

Sudanese worshippers gather to perform the Eid Al-Fitr prayers in Al-Jarif, utside the capital Khartoum, on May 13, 2021. (AFP)
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Updated 13 May 2021

Sudan PM hopes to settle $60bn foreign debt this year

  • ADB arrears paid with $425 million loan from U.K., Sweden and Ireland
  • The Paris Club of major creditors make up around 38 percent of foreign debt

Khartoum: Prime Minister Abdalla Hamdok hopes Sudan can wipe out its staggering $60 billion foreign debt bill this year by securing relief and deals at an upcoming Paris conference that could bring much-needed investment.
The seasoned UN economist-turned-premier took office at the head of a transitional government shortly after the 2019 ouster of president Omar Al-Bashir whose three-decade iron-fisted rule was marked by economic hardship, deep internal conflicts, and biting international sanctions.
In the past two years, Hamdok and his government have pushed to rebuild the crippled economy and end Sudan’s international isolation.
“We have already settled the World Bank arrears, those of the African Development Bank, and in Paris, we will be settling the International Monetary Fund arrears,” Hamdok told AFP at his office in Khartoum.
Arrears due to the African Development Bank were cleared through a bridging loan worth $425 million from Sweden, Britain and Ireland, while debts to the World Bank were paid off with a $1.1 billion bridging loan from the US.
“Paris also is home to the Paris Club, our biggest creditors... and we will be discussing debt relief with them,” Hamdok said.
Sudan’s debts to the Paris Club, which includes major creditor countries, is estimated to make up around 38 percent of its total $60 billion foreign debt.
Hamdok and top Sudanese officials will be attending Monday’s Paris conference along with by French President Emmanuel Macron, and World Bank and IMF representatives.
The aim is to draw investments to Sudan including in the energy, infrastructure, agriculture and telecommunications sectors.
“We are going to the Paris conference to let foreign investors explore the opportunities for investing in Sudan,” Hamdok said.
“We are not looking for grants or donations.”
Sudan was taken off Washington’s blacklist of state sponsors of terrorism in December, removing a major hurdle to foreign investment.
The government has also embarked on tough measures including subsidy cuts and introducing a managed currency float to qualify for an IMF debt relief program.
Though widely unpopular, the premier says the measures were necessary to move toward debt relief “by the end of the year.”
But many challenges still lie ahead.
His government has been pushing to forge peace with rebel groups to end conflicts in far-flung regions.
In October, it signed a landmark peace deal with rebels from the western region of Darfur as well the southern states of South Kordofan and Blue Nile.
Only two groups including one which wields substantial power in Darfur refused to sign the deal.
To Hamdok, the peace deal represents “50 percent on the road to peace.”
Efforts are underway to sign deals with the remaining groups, and talks with a faction of the Sudan People’s Liberation Movement-North (SPLM-N) are slated for later this month.
Hamdok acknowledged the slow pace of implementing the peace deal, but said Sudan is “steadily moving forward.”
In February, Sudan appointed three ex-rebels to the ruling sovereign council and announced a new transitional cabinet including seven ex-rebels.
“We have come a long way... and in my view the second stage of talks will go much faster.”
Simmering tensions with neighboring Ethiopia over a fertile border region and a gigantic dam on the Blue Nile pose another challenge.

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UAE’s RAW Coffee Co. expands to Saudi Arabia

Updated 11 sec ago

UAE’s RAW Coffee Co. expands to Saudi Arabia

  • The company is not planning to distribute through supermarkets but instead plans to replicate its business model in the UAE

JEDDAH: Saudi Arabia is the fastest-growing coffee market in the Middle East, expanding at an annual rate of 9.6 percent, according to research in late 2019 carried out by the organizers of the Middle East Coffee Conference held in Riyadh.

As a result, UAE-based RAW Coffee Co. has expanded its distribution network to Saudi Arabia and is eventually hoping to set up a physical presence in the Kingdom.

“We would say that the KSA specialty coffee scene is catching up to the more established UAE industry both in quality and knowledge, which is a very exciting time,” Kim Thompson, the co-owner and managing director of RAW Coffee Co., told Arab News. The company has teamed up with DHL to process its orders in the Kingdom.

“We have completed establishing our KSA business licensing and are currently exploring opportunities based out of Riyadh. At the moment, we roast and deliver fresh from our roastery in Dubai to the commercial customers in KSA that we supply, one of which is L’ETO Cafe, which has branches in Riyadh, Jeddah and Dammam,” Thompson said.

The company is not planning to distribute through supermarkets but instead plans to replicate its business model in the UAE, where it will distribute directly to customers and through third-party cafes, before eventually setting up its own operations in the Kingdom and potentially a chain of branded cafes.

RAW is not the first UAE-based coffee brand to announce expansion plans in the Kingdom this year. Emirati Coffee in April told Arab News it plans to open its first Saudi branch in July. CEO Mohammed Ali Al-Madfai reported that the company had seen a 3,135 percent increase in online sales in 2020.


Startup of the Week: Botola Meals offers healthy diets

Updated 5 min 3 sec ago

Startup of the Week: Botola Meals offers healthy diets

JEDDAH: Obesity is a growing issue in Saudi Arabia. A study by the Sharik Association for Health Research found that the rate of obesity among Saudi adults totaled 35.6 percent in 2020.

Besides health issues, another study by the US-based University of North Carolina at Chapel Hill, in collaboration with Saudi Health Council and the World Bank, found that obesity increases the risk of death by COVID-19 by 48 percent, and may make vaccines against the disease less effective.

In a bid to help those suffering with their weight, entrepreneurs Mohammad Faden, Nofal Al-Jefri and Mohammad Al-Harthi in November 2019 set up Botola Meals, a healthy meal-prepping service. 

Botola is the Arabic word for heroism. “It may directly symbolize athletes and achievements, but in fact it is a deep philosophy,” Faden told Arab News. “Whatever the individual’s ambition to reach that goal is, it is in itself an achievement and a mark of heroism,” he added. Al-Jefri highlighted the fact that consumers are prone to purchasing meals that are quick to prepare. “We believe that the market needs and lacks this type of project specialized in healthy fast food, and when you specialize in a particular field, it enhances consumer confidence in your product,” Al-Jefri said. “Clean Eating Matters” is the restaurant’s slogan. Al-Harthi said that Botola Meals offers healthy diets that are not about depriving yourself, but about balance. “We also want to educate people about the importance of investing in themselves and their health in an easy and convenient way,” he said. Botola Meals also prepares customized plans to cater to the specific needs of customers, such as monitoring ingredients that cause allergies and eliminating carbohydrates if a customer is following a paleo diet.

“We sit down with the customer and cooperate as much as possible in providing what suits them,” Faden said.

The startup meal service sold about 45,000 meals in 2020 — roughly 120 meals a day.Botola Meals has one branch in Jeddah’s Al-Salama district, and is planning to open a second branch in Riyadh in 2023. The startup’s long-term plan is to expand across the Gulf and beyond.


Saudi Arabia aims to be Egypt’s top trading partner

Updated 50 min 3 sec ago

Saudi Arabia aims to be Egypt’s top trading partner

  • Saudi investors are especially interested in the water desalination and water treatment sector, says Egyptian Trade Minister

RIYADH: Saudi Arabia plans to be Egypt’s top trading partner within five years, said Saudi Commerce Minister Majid Al-Qasabi.

He made the pledge at the Egyptian-Saudi Joint Trade Committee on Monday.

The minister highlighted the presence of 6,225 Saudi companies operating in Egypt with investments amounting to some $30 billion.

At the same time, 518 Egyptian are estimated to operate in the Saudi market, with 285 Egyptian brands in the Kingdom.

Saudi investors are especially interested in the water desalination and water treatment sector, Egyptian Trade Minister Nevine Gamea told Asharq Business.

She added that the cooperation between the two countries was reflected in the trade volume, which exceeded $5.5 billion in 2020.

The volume of Egyptian investments in the Kingdom reached $1.4 billion at the end of last year, she added.


Saudi Arabia’s FlyNAS to start direct flights to Seychelles

Updated 14 June 2021

Saudi Arabia’s FlyNAS to start direct flights to Seychelles

  • With the arrival of FlyNAS to our shores, the Ministry of Tourism is looking forward to (seeing) an increase in the number of visitors from the Saudi Arabian region

RIYADH: Saudi airline FlyNAS is starting direct flights to the Seychelles from July 1.

It will operate three times a week from Jeddah to Mahé, using an A320 Neo aircraft, on Tuesdays, Thursdays and Saturdays with up to 174 passengers. The flight time is five hours and 40 minutes.

Seychelles foreign affairs and tourism minister, Sylvestre Radegonde, said: “The destination has recorded approximately some 300 Saudi Arabians since January 2021. With the arrival of FlyNAS to our shores, the Ministry of Tourism is looking forward to (seeing) an increase in the number of visitors from the Saudi Arabian region. The three weekly flights to Seychelles from Jeddah represent another great opportunity for our destination, as not only will the Seychelles be accessible directly to Saudi Arabian nationals but also the expatriates living in the Kingdom.”

All passengers must present a negative PCR test and proof of valid travel health insurance covering any potential coronavirus-related costs as part of the Seychelles COVID-19 measures.


Energy majors bid for Qatar LNG project despite lower returns

Updated 14 June 2021

Energy majors bid for Qatar LNG project despite lower returns

  • Qatar plans to grow its LNG output by 40 percent to 110 million tons per annum (mtpa) by 2026

LONDON: Six top western energy firms are vying to partner in the vast expansion of Qatar’s liquefied natural gas output, industry sources said, helping the Gulf state cement its position as the leading LNG producer while several large projects around the world recently stalled.
Exxon Mobil, Royal Dutch Shell, TotalEnergies and ConocoPhillips, which are part of Qatar’s existing LNG production were joined by new entrants Chevron and Italy’s Eni in submitting bids on May 24 for the expansion project, industry sources told Reuters.
The bids show energy giants continue to have appetite for investing in competitive oil and gas projects despite growing government, investor and activist pressure on the sector to tackle greenhouse gas emissions.
Unlike Qatar’s early LNG projects in the 1990s and 2000s when the country relied heavily on international oil companies’ technical expertise and deep pockets, the country’s national oil company Qatar Petroleum (QP) has gone ahead alone with the development of the nearly $30 billion North Field expansion project.
It is, however, seeking to partner with the oil majors in order to share the financial risk of the development and help sell the additional volumes of LNG it will produce.
“I don’t think QP need the IOCs expertise in the upstream or midstream construction of the project but they will be glad to see someone take some LNG volumes off their hands,” a senior source in one of the bidding companies said.
Qatar plans to grow its LNG output by 40 percent to 110 million tons per annum (mtpa) by 2026, strengthening its position as the world leading exporter of the super-chilled fuel.
An Eni spokesperson confirmed the company is participating in the bidding process. QP, Shell, Chevron, TotalEnergies, Conoco declined to comment.
Exxon said it did not comment on market rumors, but added: “We look forward to continuing success in future projects with our partners Qatar Petroleum and the State of Qatar. ExxonMobil affiliates are working with Qatar Petroleum to identify international joint venture opportunities that further enhance the portfolio of both.”
Leading energy companies see natural gas as a key fuel in the world’s efforts to cut carbon emissions and replace the more polluting coal, although the International Energy Agency said in a report last month that investments in new fossil fuel projects should stop immediately in order to meet UN-backed targets aimed at limiting global warming.
Activists say that expansion in natural gas delays a transition to renewable energy that is needed to meet UN-backed targets to battle climate change. The European Union is in the midst of a debate about what role gas should take in the energy transition.
The outlook for global LNG supplies tightened sharply in recent months after Total suspended its $20 billion LNG project in Mozambique due to a surge in violence.
It followed a string of delays of LNG projects in North America as COVID-19 hobbled demand last year.
Global LNG demand has increased every year since 2012 and hit record highs every year since 2015 mostly due to fast-rising demand in Asia. Analysts have said they expect global LNG demand will grow about 3-5 percent each year between 2021 and 2025.
Lower returns
The interest from companies in the Qatari expansion comes despite relatively low returns.
QP offered international bidders returns of around 8 percent to 10 percent on their investment, down from around 15 percent to 20 percent returns Exxon, Total, Shell and Conoco have seen from the early LNG facilities, according to sources in three companies involved.
Qatar project returns have never previously been disclosed.
The six companies and QP declined to comment on the terms of the bids.
“Clearly Qatar has become more competitive,” a source said. “But it remains very low risk from the resource perspective.”
The results of the tender process are not expected to be announced before September, two of the sources said.
In March, QP said it will take full ownership of Qatargas 1 LNG plant when its 25-year contract with international investors including Exxon and TotalEnergies expires next year, in a sign of its growing confidence.
Qatar is also in talks to make Chinese firms partners in the project, sources told Reuters last month.
QP last month hired international banks for a multi-billion dollar debut public bond sale by the end of June, two sources said, to help in part development the Northern Field project.