How Saudi Arabia is translating its climate-change ambitions into action

The Green Riyadh project is the largest urban reforestation scheme in the world. (AN archives)
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Updated 13 November 2022
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How Saudi Arabia is translating its climate-change ambitions into action

  • Crown Prince Mohammed bin Salman launched the Saudi Green and Middle East Green Initiatives in 2021
  • Projects include establishing more parks and planting millions of trees to help cool urban environments 

JEDDAH: Flying into the Saudi capital Riyadh, visitors cannot help but notice the patchwork of green spaces that have popped up across the city. Less than a decade ago, the scene from above would have more closely resembled the fictional Star Wars planet of Tatooine.

Although its territory is largely covered by desert, Saudi Arabia has worked hard in recent years to protect and restore its biodiversity, and has opted for a more sustainable future by turning whole swathes of its landscape into havens of green.

Last year, Crown Prince Mohammed bin Salman launched the twin Saudi Green Initiative and the Middle East Green Initiative, which feature the largest afforestation projects in the world, to capture carbon from the air, improve soil quality, and enhance quality of life.

The second edition of the Saudi Green Initiative Forum is taking place in the Egyptian resort town of Sharm El-Sheikh from Nov. 11 to 12 to coincide with the UN climate summit, COP27.

“As a leading global oil producer, we are fully aware of our responsibility in advancing the fight against the climate crisis, and that just as we played a leading role in stabilizing energy markets during the oil and gas era, we will work to lead the coming green era,” the crown prince said during the initiatives’ launch.

A warming climate is already taking its toll on the Kingdom and the wider Middle East, with less rainfall to water crops and refill groundwater aquifers, creeping desertification and soil degradation, and dust storms growing in scale and frequency.

The two initiatives are designed to help the Kingdom and wider region adapt to and mitigate for the effects of climate variation and to adopt technologies and practices that will reduce greenhouse gas emissions and other environmental pollutants.




Circular farms like these are spread across parts of the Kingdom. (AFP file photo)

By the end of 2021, around 60 community-based projects and private sector collaborations had already been launched under the initiatives to help improve public health, boost quality of life, and promote sustainable lifestyles. At the heart of it all is the city of Riyadh.

The growing metropolis is set to more than double its population in the coming decades thanks to an $800-billion project aimed at transforming it into an economic, social and cultural hub for the region. Such a transformation will of course come with environmental challenges. 

In 2019, the Green Riyadh Project, the world’s largest integrated urban reforestation project, announced an intention to plant 7.5 million trees across the capital, to increase green space from 1.7 to 28 square meters per capita, and to increase total green space to 9 percent.

The project aims to reduce ambient temperatures by an average of 8-15 degrees Celsius in afforested locations across the city, to improve air quality by 3-6 percent, and to improve the overall aesthetic of the urban center.

Given Riyadh’s location and high density, it will need time, hard work, and investment to become a sustainable city that fulfills the goals set out in the Kingdom’s Vision 2030 Quality of Life Program, Abdullah Aldakheelallah, an architect and urban researcher, told Arab News.




Community engagement is a key goal of Saudi green efforts. (AN archives)

“Urban areas must not only incorporate green spaces. They must also provide basic amenities, entertainment spaces through eco-friendly practices, afforestation on roads and in neighborhoods, the construction of sidewalks and pedestrian pathways,” said Aldakheelallah.

“Projects in the Kingdom should adapt and adjust themselves to the strategic keys of the Quality of Life Program in their unique way to add to the improvement of urban cities as a whole.

“Green pockets of land will help nourish a city, it can promote outdoor recreational activities, improve the health of citizens and help reduce the urban heat island (UHI) phenomenon, where surfaces absorb heat and retain the heat for longer hours.”

SGI objectives: 

Net-zero emissions by 2060. 

*Boost use of renewables to 50% by 2030.  Contribute to cutting global methane emissions by 30% by 2030. 

Plant 10 billion trees and rehabilitate 40 million hectares of land. 

Raise protected areas to more than 30% of total land. 

Another benefit of the urban afforestation project is that it will curb the effects of “unmanaged surfaces,” such as uninhabited land, roundabouts, and other empty spaces that tend to retain heat longer, said Aldakheelallah.

“Some 20 percent of Riyadh is made up of unmanaged surfaces. By shading such areas, their goal is to decrease the exposure of solar radiation to unmanaged surfaces, and decrease temperatures in the city during daylight. Studies predict that by doing so, you can decrease temperatures by 4-5 degrees during the day,” he added.

Beyond increasing tree cover, Aldakheelallah says the design and retrofitting of buildings can also have a significant impact on local temperatures.

“Roofs play a crucial role in the energy balance of buildings and the surrounding environment,” he said. “The total height-to-floor area ratio and width of the roof are key determining factors for reducing direct radiation exposure.

“Unfortunately, modern ways of building homes have given way to reducing the size and width of roofs, which has had adverse impacts.”

To create and sustain its new green spaces, Riyadh must guarantee plentiful and sustainably sourced freshwater — a limited resource in a country that lacks its own rivers and receives precious little rainfall.

Deep groundwater aquifers and desalination plants are the Kingdom’s primary water resources. In major Saudi cities, desalinated water consumption is extremely high, especially in Riyadh, where its share stood at 63-64 percent in 2020.




Local planting initiatives have been launched around the Kingdom, including in the Eastern Province. (AN archives)

Much of the capital’s drinking water came from desalination plants in Makkah, Jeddah and Taif — a practice which, until more plants are powered by renewable sources of energy, continues to contribute to the Kingdom’s carbon emissions.

Dr. Mark Tester, associate director at the King Abdullah University of Science and Technology Center for Desert Agriculture, says Riyadh needs to better integrate its wastewater management if it wants to irrigate its green spaces sustainably.

“Wastewater is a massive resource, especially in a country which has so little water,” Tester told Arab News. “You need to be able to, for example, separate greywater from blackwater and then use the greywater directly.

“This saves enormous amounts of money and greatly reduces the CO2 emissions from pumping and treating the wastewater. You can use the greywater locally and with minimal treatment and this gives you an opportunity to green the environment.”

Blackwater, also referred to as sewage or brown water, is the wastewater from bathrooms, which can carry disease and bacteria, both of which can be harmful.

Greywater, by contrast, is the wastewater that comes from sinks, washing machines, bathtubs and showers. It contains lower levels of contamination, making it easier to treat and process.

Recycled greywater is commonly used in irrigation and constructed wetlands. In fact, greywater that contains food particles can even nourish plants. Using treated greywater in Riyadh could lead to improved planning, regulations, and building codes, could irrigate tens of millions of trees, and significantly improve health and well-being.

Indeed, at the very heart of the greening strategy is the happiness and well-being of Saudi residents and foreign visitors, allowing them to experience the psychological benefits of the great outdoors in a safe and manageable climate.

“Green spaces should be prioritized where they can be safely and conveniently accessed and enjoyed by everyone, regardless of age, gender, or physical ability, for example, in a neighborhood park as opposed to a street median or traffic roundabout,” Huda Shaka, a sustainable cities adviser, told Arab News.

“Such spaces can improve the physical and mental health of the urban population as well as provide opportunities for improving biodiversity, air quality, and access to food.”

 


Oman’s capital market draws 135 nationalities; foreign investments up 19%: MSX data

Updated 49 min 50 sec ago
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Oman’s capital market draws 135 nationalities; foreign investments up 19%: MSX data

RIYADH: Oman’s capital market has attracted investors from 135 nationalities, up from 67 in 2023, supported by favorable policies including low tax rates and flexible capital transfer options. 

Newly released statistics from the Muscat Stock Exchange reveal a 19 percent increase in foreign investments as of May, including participants from the Gulf Cooperation Council, Arab countries, and beyond. 

Oman’s capital market has implemented policies favoring foreign investments, including unrestricted profit repatriation and exchange operations. This trend aligns with the nation’s economic resurgence and growing institutional confidence in government strategies aimed at reducing public debt, increasing investment in essential services, and launching infrastructure projects to bolster private sector participation. 

The MSX data also indicates that foreign investments are predominantly focused on the industrial and service sectors, accounting for 15.8 percent and 15.7 percent respectively. 

Gulf investors are particularly focused on the services sector, accounting for 15.4 percent, and the financial industry at 8.5 percent. 

Conversely, non-Gulf Arab investments are primarily directed toward the financial sector, comprising 3 percent. 

Local investments heavily favor the financial industry at 87.6 percent, followed by the industrial sector at 75.6 percent and the services sector at 67.7 percent. 

The first half of this year has seen significant growth in trading activity at MSX, underscoring heightened market dynamism.  

Trading volumes surged to 3.1 billion securities, surpassing 517 million Omani rials ($1.3 billion) in value by the end of May, marking a notable 38.4 percent increase from the previous year.

Executed transactions also rose, reflecting increased market participation and liquidity. 

The exchange is expanding its database on listed companies to enhance transparency and advocate for disclosure standards among publicly traded entities, the Oman News Agency reported.  

Additionally, efforts are underway to encourage government and family-owned businesses to transition into privately held entities, enriching market diversity and investment opportunities. 

Foreign investors can invest in shares of MSX-listed companies or investment funds without prior permission, under the oversight of an independent supervisory body ensuring market fairness, investor protection, and transparency.  

Foreign investment in MSX-listed public joint-stock companies is permitted up to 100 percent, with significant interest observed in the industrial and services sectors, highlighting diversified investor preferences. 

Reflecting positive sentiment, the market capitalization of MSX-listed public joint-stock companies reached 9.4 billion rials by May’s end, up 448.5 million rials since the start of the year.  

The broader market value of all MSX-listed securities rose to 24.48 billion riyals, a gain of 676 million riyals year-over-year, bolstered by contributions from closed companies and the bond and sukuk market. 

Market indices reflected this growth, with the main index climbing to 4845 points by May’s close, up 331 points from the previous period.  

Successful IPOs by entities like Abraaj Energy Services and OQ Gas Networks have attracted new investors and boosted market liquidity, with OQ considering IPOs for two more subsidiaries this year, according to Bloomberg. 

This upward trend underscores investor confidence in MSX’s growth potential, supported by Oman Investment Authority’s plans to offer additional companies for public subscription in the coming years.  

The OIA reported a 7.4 percent year-on-year increase in Oman’s sovereign wealth fund assets, reaching 19.24 billion rials in 2023, with a 9.95 percent return on investment, as disclosed in a statement on X. 

This performance underscores the authority’s pivotal role in fostering economic growth and stability in the Middle Eastern country.  

The robust results also reflect the OIA’s strategic investment approach and effective management of its diverse portfolio, in line with its mandate to manage national funds and assets, build financial reserves, and advance targeted economic sectors through government policies. 

At a media briefing in Muscat earlier this month, the authority affirmed its commitment to contributing over 6 billion rials annually to the state’s general budget from 2016 through 2023.  

The statement further outlined the OIA’s plans to geographically diversify its new foreign and local investments across various sectors, while facilitating technology transfer and modern techniques to bolster targeted local industries. 

Looking ahead, MSX aims to strengthen its regulatory framework, expand investor outreach initiatives, and cultivate an environment conducive to sustainable economic growth, the Oman News Agency reported.  

By enhancing its reputation as a gateway for international investment and adhering to global best practices in financial markets, MSX aims to maintain its position as a leading choice for investors interested in opportunities in Oman’s dynamic capital market, it added.


Closing Bell: Saudi main index rose to close at 11,729

Updated 23 June 2024
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Closing Bell: Saudi main index rose to close at 11,729

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 231.04 points, or 2.01 percent, to close at 11,729.97.

The total trading turnover of the benchmark index was SR5.18 billion ($1.38 billion) as 79 of the stocks advanced, while 151 retreated.

Similarly, the Kingdom’s parallel market Nomu gained 71.63 points, or 0.27 percent, to close at 26,825.62. This comes as 32 of the listed stocks advanced while 36 retreated. 

Meanwhile, the MSCI Tadawul Index also gained 38.14 points, or 2.65 percent, to close at 1,475.68.

The best-performing stock of the day was Rasan Information Technology Co. The company’s share price surged 10.60 percent to SR53.20. 

Other top performers include ACWA Power Co. as well as Fawaz Abdulaziz Alhokair Co.

The worst performer was Batic Investments and Logistics Co., whose share price dropped by 5.81 percent to SR3.08. 

Other worst performers were Etihad Atheeb Telecommunication Co. as well as Saudi Manpower Solutions Co.

On the announcements front, Yanbu Cement Co. has announced the signing of a non-binding memorandum of understanding with Southern Province Cement Co. to evaluate the feasibility of merging the two companies.

According to a Tadawul statement, both firms will commence the process of due diligence, examining operational, technical, and financial as well as legal and actuarial aspects. 

They will also engage in non-binding discussions regarding the details of the terms and conditions for the proposed merger.

The MoU shall terminate upon the signing of the merger agreement by both companies or upon the expiration of 12 months from the date of its signing. It may also be extended with the approval of both firms jointly.

Additionally, either company may terminate the MoU by providing written notice to the other party in this regard.

Moreover, Edarat Communication and Information Technology Co. has announced the receipt of a letter of award from Almoammar Information Systems Co. to provide facility management support services for Sahayeb Data Centers.

A bourse filing revealed that, under the terms of the agreement, Edarat will provide support services, including managing, operating, and maintaining Sahayeb Data Centers located in Riyadh and Dammam, starting in the second quarter of 2024 and continuing until the end of 2025.


Saudi Arabia’s FDI soars to $65bn post-pandemic, among top in West Asia: report

Updated 23 June 2024
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Saudi Arabia’s FDI soars to $65bn post-pandemic, among top in West Asia: report

RIYADH: Saudi Arabia attracted $65.1 billion in foreign direct investment in the three years post-pandemic until 2023, placing it among West Asia’s top recipients, according to new data.  

According to the latest World Investment Report by the UN Conference on Trade and Development, the Kingdom's FDI outflows totaled $73.1 billion over the same period, with $16 billion recorded last year alone. This places Saudi Arabia among the top 20 economies globally for FDI outflows, ranking 16th. 

In accordance with the goals set out in the National Investment Strategy and Vision 2030 targets, Saudi Arabia has enacted substantial legal, economic, and social reforms aimed at stimulating inflows of foreign direct investment.

Launched in 2021, NIS looks to develop comprehensive investment plans across various sectors such as manufacturing, renewable energy, transport and logistics, tourism, digital infrastructure, and healthcare.

Furthermore, it aims to increase annual FDI flows to over $103 billion and boost annual domestic investment to more than $453 billion by 2030.

The UN report also noted a 55 percent annual increase in the value of international project finance deals in Saudi Arabia in 2023, reaching $22 billion. 

Last year, the nation witnessed 19 deals, marking a 90 percent growth compared to the previous year. 

Additionally, Saudi Arabia saw 389 announced greenfield projects in 2023, totaling $29 billion, reflecting a 108 percent annual increase in value. 

On a global level, FDI experienced a marginal yearly decline of 2 percent in 2023, dropping to $1.3 trillion.  

The analysis highlighted that the overall figure was significantly influenced by substantial financial flows through a few European conduit economies. 

Excluding the impact of these conduits, global FDI flows were more than 10 percent lower than in 2022. 

Conduit economies refer to countries that act as intermediaries for financial flows, especially foreign direct investment. 

These economies attract multinational corporations with favorable tax laws and regulatory environments, allowing funds to pass through on their way to final investment destinations, often for tax optimization and regulatory benefits. Examples include the Netherlands, Luxembourg, and Switzerland, as well as Cyprus and Ireland.  

The challenges  

UNCTAD stated that the global landscape for international investment remains challenging in 2024. Factors such as declining growth prospects, economic fragmentation, and trade and geopolitical tensions are influencing FDI patterns. Industrial policies and the diversification of supply chains also present limitations.  

These factors have prompted many multinational enterprises to adopt a cautious approach to overseas expansion.  

“However, MNE profit levels remain high, financing conditions are easing and increased greenfield project announcements in 2023 will positively affect FDI. Modest growth for the full year appears possible,” the report stated.  

International project finance and cross-border mergers and acquisitions were particularly weak in 2023.  

M&As, which predominantly impact FDI in developed countries, fell in value by 46 percent, while project finance, a crucial factor for infrastructure investment, was down 26 percent.  

According to the report, the principal causes of this decline included tighter financing conditions, investor uncertainty, volatility in financial markets, and increased regulatory scrutiny for M&As.  

In developed countries, the 2023 trend was significantly influenced by MNE financial transactions, partly driven by efforts to implement a minimum tax on the largest MNEs.  

Regional deep dive  

Due to volatility in conduit economies, FDI flows in Europe shifted dramatically from negative $106 billion in 2022 to positive $16 billion in 2023.  

Inflows to the rest of Europe declined by 14 percent, while inflows in other developed countries stagnated, with a 5 percent decline in North America and significant decreases elsewhere.  

FDI flows to developing countries fell by 7 percent to $867 billion, primarily due to an 8 percent decrease in developing Asia.  

Flows fell by 3 percent in Africa and 1 percent in Latin America and the Caribbean. The number of international project finance deals dropped by a quarter.  

Although greenfield project announcements in developing countries increased by over 1,000, these initiatives were highly concentrated in specific regions.  

Greenfield project announcements refer to the initiation of new investment undertakings where companies build operations from scratch on undeveloped land, leading to the construction of new facilities and infrastructure.  

South-East Asia accounted for almost half of these projects, West Asia for a quarter, while Africa saw a small increase, and Latin America and the Caribbean attracted fewer initiatives.  

FDI inflows to Africa declined by 3 percent in 2023 to $53 billion. Despite several megaproject announcements, including Mauritania’s largest worldwide green hydrogen project, international project finance in Africa fell by a quarter in the number of deals and half in value, negatively affecting infrastructure investment prospects.  

In developing Asia, FDI fell by 8 percent to $621 billion. China, the world’s second-largest FDI recipient, experienced a rare decline in inflows, with significant decreases recorded in India and West and Central Asia.  

The report stated that only South-East Asia held steady, with industrial investment remaining buoyant despite the global downturn in project finance.  

FDI flows to Latin America and the Caribbean were down 1 percent to $193 billion.  

The number of international project finance and greenfield investment announcements fell, but the value of greenfield projects increased due to large investments in commodity sectors, critical minerals and renewable energy as well as green hydrogen, and green ammonia.  

Conversely, FDI flows to structurally weak and vulnerable economies increased. FDI inflows to least developed countries rose to $31 billion, accounting for 2.4 percent of global FDI flows, the report stated.  

“Landlocked developing countries and small island developing states also saw increased FDI. In all three groups, FDI remains concentrated among a few countries,” the report added.  

The global downturn in international project finance disproportionately affected the poorest countries, where such finance is relatively more important.  

Industry trends showed lower investment in infrastructure and the digital economy but strong growth in global value chain-intensive sectors such as manufacturing and critical minerals.  

Weak project finance markets negatively impacted infrastructure investment, and digital economy sectors continued to slow down after the boom ended in 2022.  

The report further stated that global value chain-intensive sectors, including automotive, electronics, and machinery industries, grew strongly, driven by supply chain restructuring pressures. Investment in critical minerals extraction and processing nearly doubled in project numbers and values. 


Saudi Arabia offers 5th round of ‘Sah’ savings product with 5.55% return 

Updated 23 June 2024
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Saudi Arabia offers 5th round of ‘Sah’ savings product with 5.55% return 

RIYADH: Saudi Arabia has opened its fifth round of the subscription-based savings product, Sah, for June, offering a 5.55 percent return, encouraging financial stability and growth among citizens.    

The Shariah-compliant, government-backed sukuk started on June 23 and will run until June 25, with redemption amounts scheduled within a year, as announced by the National Debt Management Center in a release on X. 

Organized by the NDMC and issued by the Ministry of Finance, these fee-free savings products provide low-risk returns and are distributed through digital channels of approved financial institutions. 

Sah is the first government sukuk issued aimed at enhancing saving habits by motivating Saudis to deduct a portion of their income periodically and allocate it to their savings.   

The sukuk aligns with the goals of the Financial Sector Development Program, a key initiative of Saudi Vision 2030, which aims to increase the national savings rate from the current 6 percent to the international standard of 10 percent by 2030. 

Moreover, the release added that the minimum subscription amount is SR1,000 ($266.43), equivalent to the value of one bond, while the maximum is SR200,000, allowing up to 200 bonds per user during the program period. 

The Sah product is available to Saudi nationals aged 18 and above who open an account with SNB Capital, Aljazira Capital, or Alinma Investment. SAB Invest and Al Rajhi Capital are also eligible options. 

Moreover, it offers attractive returns aligned with prevailing market rates, leveraging government backing to ensure it remains a low-risk financial instrument. 

Participants can redeem their investments according to the published annual calendar; however, early withdrawals forfeit accrued returns and profits. 

In February, Hani Al-Medaini, CEO of the National Debt Management Center, highlighted that the sukuk aims to foster private-sector collaboration. Future initiatives include developing and launching tailored savings products for various individual categories through banks, fund managers, financial technology companies, and others. 

“I believe that issuing Sah is a great financial initiative led by the Saudi government to encourage people to save and enhance financial inclusion in the Kingdom. This initiative entitles everyone to access financial products and services that meet their needs, such as having a bank account or savings product like Sah,” Al-Madini said at the time. 

The CEO further added: “It will not only benefit Saudi individuals by encouraging them to save, but it will also have a positive impact on the national economy. It is expected to stimulate economic growth and elevate national savings rates to international standards.” 


Saudia tops Kingdom’s airlines in May for passenger satisfaction and resolution: GACA 

Updated 23 June 2024
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Saudia tops Kingdom’s airlines in May for passenger satisfaction and resolution: GACA 

RIYADH: Saudi Arabia’s flagship carrier, Saudia, registered the fewest complaints among the Kingdom’s airlines and documented a 95 percent resolution rate, according to official data. 

In its May rankings of air transport service providers and airports, the General Authority of Civil Aviation noted that a total of 1,318 complaints were registered against Saudi airlines. 

As part of its efforts to uphold passenger rights and promote transparency in the aviation sector, the authority has been conducting a monitoring and inspection program to ensure that Saudi airports and carriers adhere to international standards and recommendations. 

This monthly classification, based on traveler complaints received by GACA, considers Saudia, flyadeal, and flynas, as well as multiple airports across the Kingdom. 

Saudia emerged with the lowest incidence of complaints among airlines, with only 10 per 100,000 travelers and an impressive 95 percent resolution rate. 

Following closely, flyadeal recorded 11 complaints per 100,000 passengers, with a resolution rate of 99 percent, while flynas had 13 complaints per 100,000 travelers and a resolution rate of 100 percent. 

The primary grievances centered around issues concerning luggage, flights, and ticketing. 

Among international airports serving over 6 million passengers annually in the Kingdom, King Fahd Airport in Dammam demonstrated good performance, registering a mere three complaints per 100,000 travelers and achieving a 100 percent resolution rate. 

Similarly, Prince Sultan bin Abdulaziz Airport in Tabuk reported only one complaint per 100,000 passengers, with a 100 percent resolution rate. 

Najran Airport stood out among domestic airports with two complaints per 100,000 passengers and a 100 percent resolution rate. 

Emphasizing its commitment to transparency and service excellence, GACA reiterated that the monthly classification report serves to foster fair competition, enhance service quality, and bolster trust among travelers, the Saudi Press Agency reported. 

Furthermore, GACA has equipped airport operators with comprehensive guidelines for handling complaints, underscoring adherence to service agreements and regulatory standards, SPA added. 

Regular workshops conducted by GACA further empower airline and ground service company staff to implement passenger protection measures effectively. 

According to the authority, it maintains multiple communication channels, including phone, email, and social media, open around the clock to enable interaction with travelers and airport visitors. 

The complaints received through these channels often concern issues such as boarding passes, employee behavior, and services for persons with disabilities and limited mobility.