ACWA Power won’t start other hydrogen projects before NEOM venture advanced: CEO

ACWA Power's Nooro III solar. Company launched its IPO on Sept. 2. (Supplied)
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Updated 12 September 2021

ACWA Power won’t start other hydrogen projects before NEOM venture advanced: CEO

  • “For us it’s about making sure we deliver the first project to give us the confidence and then the capabilities and capacity to then start replicating it,” CEO says

RIYADH: ACWA Power, the energy producer backed by Saudi Arabia’s sovereign wealth fund, sees big opportunities in the hydrogen market but the company isn’t planning to add another hydrogen project to its portfolio for some time until its venture with NEOM and Air Products is at an advanced level, its CEO said.

“The world is projecting a massive green hydrogen market ahead of us, so the market is there for us – we don’t need to worry about the market,” Paddy Padmanathan said in an interview with Arab News last week.

“For us it’s about making sure we deliver the first project to give us the confidence and then the capabilities and capacity to then start replicating it,” he said.

Air Products, in conjunction with ACWA Power and NEOM, signed an agreement last year for a $5 billion venture to produce 650 tons per day of green hydrogen by heating water using renewable energy, as well as 1.2 million tons per year of green ammonia for exporting the hydrogen to the global market. The project, which will be built in NEOM, is scheduled to be onstream in 2025.

“There is a lot of work that is going on by the three partners in order to prepare the site, get on with the engineering, and develop the design. Because it’s the first project of its kind we really want to spend the time to optimize it,” he said.

The venture has already appointed advisers, including Lazard, for the financial planning, and there are numerous other technical advisers, Padamanthan said.

Lazard, which advised Saudi oil giant Aramco on its initial public offering in 2019, approached banks early this year to sound out their appetite for the project, Reuters previously reported, citing sources familiar with the matter.

Acwa Power went into the hydrogen project at NEOM for three main reasons, said Padamanthan. First, its ability to reduce the cost of energy used in the project. Second, the advantage it gets from selling power on a long-term basis, and finally, its expertise in building complex projects from scratch.

"Over 60 percent plus or minus of the cost of producing green hydrogen using electrolysis is the cost of electricity, so... we have learned how to deliver competitive renewable energy, both solar and wind," he added.

Securing long-term offtake contracts for its power is a core principle in Acwa's business model, something it will keep in its NEOM's project. "So as we go forward with the hydrogen venture we are looking for that long offtake contract," he said. 

ACWA, an equal partner with NEOM and Air Products, will focus on the production of energy to feed it into the electrolyze to produce hydrogen, while Air Products will handle the production of hydrogen and convert it to liquid ammonia ready for customers at loading points. Through this strategy, ACWA is transferring the market risk to Air Products, he added. Market risk is therefore transferred from ACWA to Air Products.

Despite all this interest in hydrogen, ACWA's CEO thinks hydrogen still needs time to become a major source of energy on a global scale.

"Let's not overplay hydrogen. The fact of the matter is that hydrogen is in its early days," he said. 

Hydrogen can lower the emissions from the industrial sector which is responsible for roughly 40 percent of all global emissions, but this can happen if we can make hydrogen cost competitive, and "then if we can find storage solutions. The world needs to develop that for hydrogen, and then transportation solutions," he said, adding that there is loss of efficiency when transporting hydrogen, which requires shipping it in the form of ammonia to the final user.

Saudi digital transformation strategy enters the final phase

Updated 01 October 2022

Saudi digital transformation strategy enters the final phase

  • The plan aims to create a new seamless government experience for beneficiaries by 2024

CAIRO: As worldwide business leaders integrate automation and digitalization into their strategies, the Kingdom has been calling for local initiatives to drive digital transformation into its economy.

Since 2006 Saudi Arabia has had an established plan for digitization, called to the National Strategy for Digital Transformation.

As the world swiftly adopted digital strategies after the pandemic put in place a huge need for physical interaction alternatives, Saudi Arabia itself was able to quickly establish a framework for digital transformation in sectors including finance, commerce, logistics and information technology.

The action plan was divided into three phases. It is currently in its final stage, the Smart Government Strategy, which aims to create a new seamless government experience for beneficiaries by 2024.

In line with the action plan, several government authorities have established regulatory sandboxes using digital technologies to allow businesses and startups to experiment in a controlled environment. A sandbox is a testing environment in a computer system in which new or untested software or coding can be run securely.

One of the most active sandboxes is at the Saudi Central Bank, also known as SAMA, which aims to boost the financial sector and transform it into a smart financial hub.

SAMA has admitted 38 companies into its sandbox while providing licenses to several businesses that use financial technology in their operations.

The Communication and Information Technology Commission provides a sandbox for delivery applications, and the Digital Government Authority enhances organizational solutions in digital platforms and services.

The Kingdom has also encouraged using artificial intelligence to achieve Vision 2030 and Smart Government Strategy objectives.

The strategy is expected to set Saudi Arabia’s AI market to touch $135.2 billion by 2030, which is estimated to contribute 12.4 percent to the Kingdom’s gross domestic product.

Saudi Arabia also intends to transform its workforce by educating and establishing a reservoir of 20,000 AI and data qualified experts, of which 5,000 will be given deep expertise and highly certified.

The Global AI Summit held in Riyadh on Sept. 13 has been another significant leap into the evolution of the sector, with global leaders partnering with several Saudi-based companies.

The event witnessed the launch of Aramco’s Global AI Corridor project that aims to build and commercialize the AI ecosystem in the Kingdom, in addition to over 40 agreements and partnerships in the public and private sectors.


SABIC takes lead in blue fuel production, net-zero endeavors

Updated 01 October 2022

SABIC takes lead in blue fuel production, net-zero endeavors

  • It recognized SABIC’s Jubail facility for producing 37,800 tons of blue ammonia and Aramco’s wholly owned refinery in the same city, known as SASREF, for 8,075 tons of blue hydrogen

DUBAI: SABIC Agri-Nutrients Co., a Saudi Basic Industries Corp. subsidiary, has gained the world’s first independent certification for blue hydrogen and ammonia production, said a senior company official.

TÜV Rheinland, leading independent testing, inspection, and certification agency based in Germany, has certified the blue hydrogen and ammonia production facilities of SABIC AN and Saudi Arabian Oil Co.

It recognized SABIC’s Jubail facility for producing 37,800 tons of blue ammonia and Aramco’s wholly owned refinery in the same city, known as SASREF, for 8,075 tons of blue hydrogen.

Commenting on the certification, SABIC’s executive vice president of sustainability, technology and innovation, Bob Maughon, told Arab News that people will “see more examples of that from us to come.”

The chemical giant is on a path to ensure that it reduces its carbon neutrality by 20 percent compared to its 2018 baseline. 

The company is also well on track to achieve net-zero for scope 1 and 2 emissions by 2050, said Maughon on the sidelines of the Gulf Petrochemicals and Chemicals Association Research and Innovation Conference in Dubai.

The US Environmental Protection Agency defines scope 1 emissions as direct greenhouse gas emissions from sources owned by an organization.

Scope 2 emissions are indirect GHG emissions from purchased electricity, steam, heat or cooling.

SABIC currently emits approximately 53 million tons to 55 million tons of carbon per year, including scopes 1 and 2, he said.

These figures are well aligned with the Vision 2030 blueprint, which aims to reduce carbon emissions by 278 million tons per year by 2030, added Maughon.

Besides reducing carbon emissions and producing blue hydrogen, SABIC supports the transition to electric power and helps meet global climate change goals.

Maughon, who is also the chief technology and sustainability officer of SABIC, said the company recently launched the Bluehero initiative that focuses on solutions for the broader electrification market and electric vehicles.

The initiative supports the automotive industry’s mission to create better, safer and more efficient EVs, optimizing structural battery components with flame-retardant materials.

He said that materials for “lightweighting” EVs, encapsulating batteries and many other solutions, are being developed by the company to improve fuel efficiency and performance.

Several major brands worldwide have announced that they will deprioritize investments in internal combustion engines and make significant investments in preparing for the conversion to EVs, according to Maughon.

As a result, he believes SABIC will benefit greatly from these lightweight trends with its differentiated material portfolio, which is crucial for reducing battery demand and increasing car range.

Maughon said that SABIC is investing significantly in research around low-carbon processes and circular plastic.

Earlier this month, it joined hands with European companies BASF and Linde to start the construction of the world’s first pilot plant for large-scale electrically heated steam cracker furnaces in Germany.

The new technology uses electricity from renewable sources instead of natural gas, which allows it to reduce carbon emissions of one of the most energy-intensive production processes in the chemical industry by up to 90 percent compared to technologies commonly used today.

The demonstration plant, scheduled to be launched in 2023, will be fully integrated into one of the existing steam crackers at BASF’s Verbund site in Germany’s Ludwigshafen city.

SABIC and BASF will handle the investment, and BASF will operate the plant. On the other hand, Linde will oversee the project’s engineering, procurement, and construction and will commercialize the developed technologies in the future.

The project has been granted €14.8 million ($14.7 million) by the German Federal Ministry for Economic Affairs and Climate Action to help overcome challenges caused by global conditions and energy costs.

With the new technology, BASF, SABIC, and Linde aim to develop full-scale commercial production plants “that can achieve significant reductions in carbon dioxide emissions, compared with today’s technology.”


Saudi real estate markets rise as ground realities change: JLL CEO

Updated 01 October 2022

Saudi real estate markets rise as ground realities change: JLL CEO

  • Demand for residential properties in Riyadh is expected to continue to strengthen in the longer term

RIYADH: Saudi Arabia’s retail sector witnessed an increase in retail space and a strong recovery in domestic demand following the relaxation of COVID-19 restrictions in the first half of 2022, according to the head of global real estate services firm Jones Lang LaSalle.

The underlying demand for residential properties in Riyadh remains strong, and it is expected to continue to strengthen in the longer term as the government fuels its ambitious target to make the city one of the 10th largest in the world by 2030, said a senior JLL official.  

In an exclusive interview with Arab News, Thierry Delvaux, CEO, Middle East, Africa and Turkey at JLL, said: “The real estate is reviving. Since the relaxation of the restrictions, we are seeing a greater movement of people. 

The office rates are very high at the moment. And when it comes to rents, we are seeing significant growth. Retail centers are reporting high levels of footfall.

Thierry Delvaux, CEO, Middle East, Africa and Turkey at JLL

“We are also seeing a comeback from firms that planned to open new offices.”

As a result, the demand for office real estate is rising — reflected in growing occupancy rates, which for Grade A buildings are nearly full, pointed out Delvaux.

Agreeing that the property market has reached the pre-pandemic level, the JLL CEO said: “The office rates are very high at the moment. And when it comes to rents, we are seeing significant growth.”

Demand for retail shops is also increasing. Delvaux said that retail centers are reporting high levels of footfall, especially malls.

Commenting on residential properties witnessing strong demand in Riyadh, Delvaux said: “Rents and prices for residential real estate in Riyadh is growing, and we are seeing single-digit growth for both.”

The northward trend is not just limited to Riyadh but also other major cities such as Jeddah.

“If you talk about Jeddah, we are seeing limited supply. Demand is growing, resulting in a significant impact on residential rents and prices,” added Delvaux.

Improving growth outlook

On the growth rate of the real estate market this year compared to last year, he said: “It depends from sector to sector. 

“For example, the residential sector is seeing single-digit growth in terms of rents. 

“Offices are also seeing very healthy rental growth due to higher demand levels and quite scarce supply for office space.” 

The outlook for the Saudi real estate market in the second half of 2022 remains encouraging.

“In the short to medium term, we expect the population of Riyadh to grow in line with the Vision 2030 program to double its population and increase homeownership to 70 percent by 2030, suggesting that the demand will continue to grow.”

Riyadh aims to increase its residents from 7.5 million today to between 15 million and 20 million in 2030 under ambitious plans unveiled by Crown Prince Mohammed bin Salman at the Future Investment Initiative summit held in the Saudi capital last year.

Changing market dynamics

Speaking at the JLL roundtable on the importance of sustainability in enhancing the transparency of the real estate market, Delvaux said that he is witnessing a growing interest in transparency standards and sustainability, which could be a game changer.

“We understand the significant impact we can create through our work in Saudi Arabia,” he said, adding: “In addition to reducing our emissions, we are also making strategic investments in sustainability services and capabilities, leveraging the breadth and strength of our global platform and local expertise.”

According to JLL’s latest Global Real Estate Transparency Index, the Kingdom maintained its position in the top 50 global rankings, boosting its position at a regional level. It ranked 49 on the index.

The roundtable also focused on the vulnerabilities faced by the Middle East and North Africa region while highlighting the concerted efforts made by the Kingdom to bring about green innovation in real estate.

The initiatives include introducing the Mostadam Green Building Rating System tailored to the Kingdom’s local climate and environmental characteristics and the Saaf Certification Program.

Also noteworthy is the retrofitting of the Ministry of Municipal and Rural Affairs’ building in Riyadh by the National Energy Services Co., also known as Tarshid, with energy efficiency measures to reduce a facility’s energy consumption.

“With Saudi real estate industry’s momentum toward decarbonization and transparency, the country has emerged as one of the world’s top 50 most transparent real estate markets,” said Saud Mohamed Al-Sulaymani, the country head of JLL Saudi Arabia, while speaking at the roundtable. 

With Saudi real estate industry’s momen-tum toward decarbon-ization, the country has emerged as one of the world’s top 50 most transpa-rent real estate markets.

Saud Mohamed Al-Sulaymani, Country head of JLL Saudi Arabia

He also emphasized that hosting the upcoming UN climate conferences in Egypt and Dubai provided an excellent opportunity for the region to shed light on its climate change risks and vulnerabilities and showcase its action plans to mitigate and adapt to them.

Separately, the National Housing Co. recently signed nine agreements totalling SR2 billion ($533 million) with a number of national strategic partners on the sidelines of the Distinguished Cities Projects Exhibition in Riyadh.

The agreements with national partners aim to provide project management services, engineering supervision, design work implementation, housing unit construction, and evaluation services.

Furthermore, the agreements make it easier to manage the printing environment and control consumption, as well as ensure the quality of infrastructure, improve operational sustainability and develop projects.

Earlier this month, the company signed an agreement to finance and develop a portfolio of projects worth more than SR40 billion, which will result in the construction of more than 150,000 housing units in 11 cities across Saudi Arabia.


Top 10 most funded mobility-tech startups in MENA region

Updated 01 October 2022

Top 10 most funded mobility-tech startups in MENA region

  • After producing several unicorns, the shared mobility market is set to expand

CAIRO: The shared mobility technology landscape, which includes ride-sharing, car-renting and taxi-ordering models, has been on the rise in the Middle East and North African region ever since global players such as Uber and Lyft rode a wave of success in the business.

After producing several unicorns, the shared mobility market in the region is set to expand with a compound annual growth rate of 18.4 percent from 2022 to 2030 as the annual market is predicted to witness a 16.9 percent increase, according to Grand View Research Inc.

Arab News has compiled a list of the 10 most funded mobility-tech startups from the MENA region.

1. Careem

Total funding: $771.7 million

Founders: Mudassir Sheikha and Magnus Olsson

Investors: Alpha Partners, Arzan Venture Capital, BECO Capital, Bild Alternative Investment, Coatue Management and 22 others

Headquarters: UAE

Recognized to be the Middle East’s first unicorn startup, Careem has transformed the ride-hailing sector in the region, attracting global competition and acquisitions to the industry.

The company first started as a car-booking app. It later entered the food delivery space and now operates as a super app.

Founded in 2012, Careem is the second most funded startup in the region. It obtained unicorn status in 2018 and was later acquired by global ride-hailing giant Uber for $3.1 billion in 2020.

2. Swvl

Total funding: $264 million

Founders: Mostafa Kandil, Mahmoud Nouh and Ahmed Sabbah

Investors: BECO Capital, Endeavor Catalyst, MSA Capital, Oman Technology Fund, Arzan Venture Capital, Sawari Ventures, VNV Global, Queen’s Gambit Growth Capital and others

Headquarters: Founded in Egypt, based in the UAE

Founded in 2017, Swvl is a tech-enabled mass transit solutions provider offering intercity, intracity, business-to-business and business-to-government transportation services.

The company is another unicorn founded in the MENA region, also listed on the Nasdaq.

Currently operating in 20 countries across four continents, Swvl went public after it completed a merger with special purpose acquisition company Queens Gambit Growth Capital and was valued at $1.5 billion in March 2022.

3. Yassir

Total funding: $43 million

Founders: Noureddine Tayebi and El-Mahdi Yettou

Investors: Y Combinator, P1 Ventures, French Partners, ACE & Co., Venture Souq, WndrCo, DN Capital, Kismet Capital, Spike ventures, Quiet Capital, Endeavor Catalyst, FJ Labs, Venture Souq, Nellore Capital, Moving Capital and other investors

Headquarters: Algeria

Established in 2017, Yassir offers on-demand services such as ride-hailing and last-mile delivery in 25 cities across Algeria, Canada, France, Morocco and Tunisia, with over 3 million users.

The startup started as a ride-sharing platform and later became a super app adding last-mile delivery and financial services for its users.

The company raised $30 million in series A funding in June 2021 in a bid to expand into Western Africa and Europe in 2022.

4. ekar

Total funding: $34 million

Founder: Vilhelm Hedberg

Investors: Polymath Venture and other investors

Headquarters: UAE

Founded in 2016, ekar offers on-demand access to a network of car-share, subscription leasing vehicles and other mobility options, including peer-to-peer rentals.

Operating across seven cities with a fleet of 2,300 vehicles and 250,000 users in Saudi Arabia and the UAE, the company is one of the region’s first fully contactless car-sharing apps.

The company raised $17.5 million in series B funding in 2019, announced its launch in Thailand in 2022 and plans to expand into Malaysia, Turkey and Egypt later in the year.

5. Udrive

Total funding: $17.3 million

Founders: Nicholas Watson and Hasib Khan

Investors: Cultiv8 and Oman Holding International

Headquarters: UAE

Another car rental app Udrive provides a pay-per-minute rental service for UAE residents and tourists, clocking in over 2 million trips.

Founded in 2016, the company allows users to pick up a car from any location available and is then returned to any parking location in the same city.

In its latest funding round, Udrive raised $5 million to support its plans to expand in the Middle East and enhance its technology.

6. Fenix

Total funding: $5 million

Founders: Jaideep Dhanoa and IQ Sayed

Investors: Emkan Capital and Panthera Capital Ventures

Headquarters: UAE

Established in November 2020, Fenix provides a different kind of mobility using electric scooters on a subscription-based service.

Founded by two ex-Careem executives, the company has one of the largest electric vehicle fleets in the region as it operates in four cities.

In 2021, the company raised a $5 million seed funding to support its goals to become the first national micro-mobility operator in the Gulf Cooperation Council.

7. Telgani

Total funding: $4.2 million

Founder: Abdulkader Almkinzy

Investors: 500 Startups, Saudi Venture Capital Co., Impact46 and others

Headquarters: Saudi Arabia

A car rental platform, Telgani allows users to rent a car through its mobile app that is then delivered to their doorstep.

Founded in 2018, the company also enables users to pick the car and the location they want to travel to and provides them with nearby options.

In November 2021, Telgani secured a $2.5 million pre-series A funding led by Saudi venture capital firm, Impact46.

8. Ousta

Total funding: $3.1 million

Founder: Nader El-Batrawi

Investors: Angel investors

Headquarters: Egypt

Founded in 2016, Ousta is Egypt’s first local ride-sharing application that was established to compete with ride-hailing companies Uber and Careem.

The company did not disclose any of its operations to the media since its fundraising of $1.5 million in 2016.

9. KOI Ride

Total funding: $3 million

Founder: Kayla Kroot

Investors: CEG Invest and Taurus Wealth

Headquarters: UAE

KOI Ride is a B2B ride-hailing service startup that offers end-to-end ground transport services and connects online booking portals with licensed transportation providers.

Established in 2015, the company offers services in Dubai, London, New York, Las Vegas, Cancun, Istanbul, Bodrum, Antalya, Izmir and Dalaman.

In June 2022, KOI Ride raised $3 million in an investment round to support its expansion into 24 cities across Europe, the Americas and the Middle East.

10. Urent

Total funding: $1.5 million

Founder: Omar Al-Ashi

Investors: Sheikh Saeed bin Ahmed Al-Maktoum

Headquarters: UAE

Urent, another player in the car rental space, is a UAE-based platform aiming to revolutionize the car rental industry in the region.

The company offers a peer-to-peer vehicle sharing platform, creating a whole community based on trust.

It is dubbed to be the Airbnb for cars.

In June 2019, Urent raised seed funding and, in 2020, raised an undisclosed pre-series A funding.

Gasoline price to shape EV demand in Kingdom: KAPSARC

Updated 01 October 2022

Gasoline price to shape EV demand in Kingdom: KAPSARC

  • KSA has implemented energy price reforms to unlock economic and environmental benefits for the country

RIYADH: Gasoline prices will play a significant role in shaping the demand for electric vehicles in the Kingdom, according to Anwar Gasim, a King Abdullah Petroleum Studies and Research Center researcher.

“The higher the domestic gasoline price, the more a consumer may be incentivized to switch to an electric vehicle,” he told Arab News.

According to Gasim, gasoline prices in the Kingdom seven years ago were a quarter of today’s prices.

“If you look at the 91-octane gasoline, it was SR0.45 ($0.12) per liter. Today, it’s SR2.18,” Gasim said in an exclusive interview with Arab News.

Since 2016, the Kingdom has implemented energy price reforms to unlock economic and environmental benefits for the country.

“Since gasoline prices ended up getting linked with the international price, the government had to put a cap on them when international prices went up very high last year,” said Gasim.

It means there is a limit that domestic gasoline prices will not surpass, no matter how high energy prices may hike internationally.

“I think it was becoming too high for people here, and then the government decided to put a cap,” he said.

According to Gasim, raising domestic energy prices can contribute to the Kingdom’s climate goals.

Saudi Arabia aims to reduce emissions and increase the share of renewables to 50 percent by 2030.

“Higher energy prices can incentivize more efficient behavior, more energy conservation, and therefore it can help save energy and reduce emissions,” he added.

KAPSARC was a part of the regulatory team led by the Ministry of Energy, which on Aug. 22 issued the completion of all legislative and technical aspects to regulate the EV charging market.

These stations will more likely charge the vehicles using the national grid. Still, there are possibilities that off-grid stations will be a requirement.

Some neighborhood distribution networks can no longer accommodate any additional load. They have reached the peak of the transformer capacity.

The only option is using off-grid solutions; renewable sources like solar and hydrogen can supply these off-grids.

Electromin, a wholly owned e-mobility turnkey solutions provider under Petromin, in May announced the rollout of electric vehicle charging points across the Kingdom.

In an earlier interview with Arab News, Kalyana Sivagnanam, the group CEO of Petromin, said that the network includes 100 locations across the Kingdom powered by a customer-centric mobile application.

Sivagnanam said that the company would set up most of its charging stations in Riyadh, Jeddah and Dammam and eventually branch out across the country.

Electromin’s charging network will offer a complete spectrum of services from AC chargers to DC fast and ultrafast chargers, catering to all customer segments.

The imports of EV charging equipment were permitted in the Kingdom in 2020.

As part of the Kingdom’s sustainability strategy, the Royal Commission of Riyadh launched an initiative last year to ensure that 30 percent of all vehicles in the capital would be powered by electricity by 2030.