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Mideast’s share of renewables in energy mix to double by 2030: SAEE chairman

Saudi Arabia is leapfrogging in sustainable energy generation while setting a net-zero target for 2060. (SPA
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Updated 05 February 2023
  Reina Takla & Nirmal Narayanan 

Mideast’s share of renewables in energy mix to double by 2030: SAEE chairman

  • Region plays crucial role as it continues supplying hydrocarbons as the world enters a new energy system
Updated 05 February 2023
  Reina Takla & Nirmal Narayanan 

RIYADH: Saudi Arabia is committed to driving energy transition using renewables but not at the cost of traditional fuels as the world needs adequate supply to meet its demand, according to a top official of a Saudi energy body.  

In an exclusive interview with Arab News, the Saudi Association of Energy Economics Chairman Majeed Al-Moneef said that the Kingdom, and the Middle East region as a whole, will be at the forefront of both traditional and renewable energy sources, as it steadily progresses in achieving sustainable goals.  

“We will follow the world trend in increasing the share of renewables in our energy mix. But that will not be done by sacrificing our oil and gas sectors, but along with the development of our oil and gas sectors,” said Al-Moneef.  

The chairman of SAEE which works toward building capabilities in energy economics said the Middle East region is playing a crucial role in the energy transition journey, as it continues supplying hydrocarbons which are pivotal as the world enters a new energy system. 

“We have the Saudi Green Initiative and Middle East Green Initiative. So, we are an important player in traditional energy sources and renewable energy sources. We will be in the forefront of both.”  

He further pointed out that countries in the Middle East region are now heavily investing simultaneously in traditional fuels like oil and gas and renewable energy sources including hydrogen.  

Al-Moneef expects that the share of renewables in the energy mix in almost all regional countries will double or triple by 2030.  

Talking about Saudi Arabia’s Vision 2030, the SAEE chairman said a massive socioeconomic and institutional transformation is taking place across all sectors including energy as the objective is to diversify the economy. “We have got new energy resources like renewables, hydrogen, carbon sequestration and carbon management. They are the sectors of tomorrow. So, we are investing in future energy.”  

This comes as Saudi Arabia is leapfrogging in sustainable energy generation while setting a net-zero target for 2060. 

Al-Moneef pointed out that the region’s financial institutions including corporates, government financing, and multi-regional financing institutions have a crucial role to play in renewable energy projects to achieve sustainable goals within the stipulated timeline.  

IAEE International Conference 

SAEE which works toward facilitating dialogue among various stakeholders is hosting the International Conference of the International Association for Energy Economics for the first time in the Middle East and North Africa region in Riyadh with the King Abdullah Petroleum Studies and Research Center. 

Al-Moneef sounded confident that the IAEE conference which begins on Feb. 4 will witness a record number of participants.  

“This conference will have the largest registration in the history of energy economic conferences. This is the first time that such a conference is being held in the region. So, this is a testament to the importance of Saudi Arabia and the region in the global energy sector,” he said. 

Al-Moneef revealed that regional universities will present scientific papers during the event, and added that events like these hold significance as “they will accelerate the participation of more regional research institutions, individuals and students in the energy sector.”  




Majeed Al-Moneef, chairman of the Saudi Association of Energy Economics. (Supplied)

He disclosed that they had two major meetings involving all the universities in Saudi Arabia to encourage them to submit papers. “We tried to have a wide representation of the region. So, we have good numbers. As a matter of fact, something close to 40 percent of papers is from Saudi Arabia and the region.”   

The SAEE chairman pointed out that the purpose of the conference is to encourage research in energy economics in the region. “That was our main goal. The field of energy economics is of crucial importance to the region, and we should have more researchers in the research institutions, individuals, and students who are engaged in that subject matter.”  

He revealed that the conference will hold special plenary sessions on investment and trade in the energy sector, “as the conflict in Ukraine has changed the trade flows of oil and gas globally.”  

Al-Moneef further pointed out that Saudi Arabia and the region as a whole will host more similar events related to energy economics in the future.  

“As a matter of fact, one of the outcomes of this conference will be to have annual regional conferences in the Middle East. So, one of the outcomes will be to institutionalize a MENA Middle Easy symposium to be held every year,” he said.  




Saudi Arabia is leapfrogging in sustainable energy generation. (SPA)

Al-Moneef noted that Saudi Arabia will be on the organizing committee for the MENA Energy Economics conference that will be held every year, and the Kingdom will make sure that researchers from the institutions in the nation will participate in these upcoming events.  

Regional cooperation  

Talking about the necessity to ramp up power generation and increase the efficiency of energy usage, Al-Moneef stressed that sufficient investments are needed to elevate efficiency “so that the production process will be clean, and efficient with the least cost possible.”  

He also highlighted that international and regional cooperation is very crucial to ensure the growing power demand in the future.  

Al-Moneef who had served in multiple high-profile positions including the Secretary General of the Supreme Economic Council of Saudi Arabia, Governor of Saudi Arabia in the Board of Governors of OPEC, stressed the need to create a common grid that will solve power-generating issues. "It will allow countries with power scarcity to secure help from nations that produce excess power.”  

He added that a common energy market will be soon materialized in the Middle East region, supported by a proper regulatory framework.  

According to him, promoting regional cooperation in the energy field is the key to a new Middle East. “And we have to improve the transportation lines.”  

For Al-Moneef, what the region needs is the proper regulatory framework. “Europe has done it. They have put in place the regulatory framework to see to it that there is a common energy market. We can have someday a common Middle East energy market. We are capable of doing it,” he signed off.  

Topics: Saudi Vision 2030 Vision 2030 Saudi Green Initiative Middle East Green Initiative Saudi Association of Energy Economics Majeed Al-Moneef

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Pakistani, Russian officials negotiate deal to import crude oil from Russia

Updated 21 March 2023

Pakistani, Russian officials negotiate deal to import crude oil from Russia

  • Teams of Pakistan State Oil and Russia’s state-owned Operational Services Center met in Karachi on Tuesday
  • Petroleum minister said in January Pakistan wanted to import 35% of its total crude oil requirement from Russia 
Updated 21 March 2023
NAIMAT KHAN

KARACHI: Officials of the Pakistani and Russian state-owned oil companies on Tuesday held a meeting in Karachi to negotiate a deal under which Islamabad will acquire cheaper energy imports from Russia, an official with direct knowledge of the talks said.   

Russia this year conceptually agreed to supply crude oil and oil products to cash-strapped Pakistan at cheaper rates and signed several memoranda of understanding with Pakistan’s energy ministry.  

After the inter-governmental meeting in January, Pakistan’s state minister for petroleum Musadik Malik said his country wanted to import 35 percent of its total crude oil requirement from Russia. 

“Talks to negotiate government-to-government level deal were held in Karachi today,” the official, who is privy to details of the talks, confirmed to Arab News, adding that parlays were still underway and a deal may be signed “soon.” 

He added that the details would be shared after the deal was sealed. 

In the talks, officials of the Pakistan State Oil (PSO) are representing the country, while the Russian side is being represented by a team of Operational Services Center, a Russian state-owned company. 

Malik didn’t respond to Arab News' request for a comment on the matter. 

The current price of Brent crude has come down to $73 per barrel whereas the Russian crude oil price remained at $52 in February, which has further lowered between $42-48 in the international market, according to Pakistani media reports. 

“They [oil industry] urged Pakistan refineries to purchase Russian oil on their own in compliance with the G7 countries’ regulations,” Pakistan's Geo News channel reported. 

"However, the government is trying to secure a G2G (government-to-government) deal below the $60/barrel price cap imposed by G7 countries." 

Under the G2G deal, Pakistan's Petroleum Division wants to lock the deal at close to $50/barrel, according to the report. The G7 countries imposed the price cap on Russian oil in the wake of Moscow's invasion of Ukraine. 

Malik recently said that Pakistan would receive its first consignment of crude oil from Russia in the first week of April.

“The first consignment of crude oil from Russia will arrive in the first week of April,” the state-run Radio Pakistan broadcaster reported on March 17, citing the state minister.    

Pakistani officials last year visited Russia to negotiate the oil deal at a discounted rate. Islamabad and Moscow then agreed that the oil and gas trade transaction would be structured to ensure mutual economic benefit. 

In October last year, Russia's consul general in Karachi, Andrey Viktorovich Fedorov, said that sanctions imposed by Western countries on Moscow had impacted economic cooperation between Pakistan and Russia. The sanctions came in response to Russia’s invasion of Ukraine in February last year. 

Former prime minister Imran Khan, who arrived in Russia the day it launched a full-scale invasion, has previously said that Russia was willing to offer oil at cheaper rates to Pakistan. 

Miftah Ismail, who has now been replaced by Ishaq Dar as the finance minister, had rubbished Khan’s claims, saying Islamabad would be willing to buy oil at cheaper rates from Russia provided Moscow made the offer and Islamabad would not have to face sanctions on the deal. 

Pakistan denies IMF linked bailout loan deal to nuclear program

Updated 20 March 2023

Pakistan denies IMF linked bailout loan deal to nuclear program

  • Finance minister says delay in reaching staff level agreement with IMF “purely due to technical reasons”
  • Dar says last week’s comments about Pakistan’s nuclear program should not be linked to ongoing IMF negotiations
Updated 20 March 2023
KHURSHID AHMED   

KARACHI: Pakistani Finance Minister Ishaq Dar said on Monday neither the International Monetary Fund (IMF), nor any foreign country, had raised issues related to the country’s nuclear program, and a delay in signing a bailout deal with the IMF was due to "technical reasons."

Dar was addressing his own remarks from last week in the upper house of parliament when he said no country or institution had a right to tell Pakistan” what range of missiles or what nuclear weapons it can have, we have to have our own deterrence.”

The remarks were widely linked to a months-long delay in signing a staff level agreement with the International Monetary Fund for a bailout package of $1.1 billion, that has been delayed since November mainly over issues related to fiscal policy adjustments.

In a statement issued by the ministry of finance on Monday evening, Dar said his comments on Pakistan’s nuclear program were being “quoted out of context.”

“My comments with regards to Pakistan’s Nuclear Program was in response to a colleague Senator’s specific question, wherein, I emphasized that Pakistan has sovereign right to develop its nuclear program, as it best suits our national interests, without any external dictation, which, by no means should in any way whatsoever be linked with the ongoing negotiations with the IMF,” the finance minister said.
 
“It is clarified that neither IMF nor any other country has attached any conditionality or made any demand from Pakistan with regard to our nuclear capability … The delay in IMF staff level agreement is purely due to technical reasons, for which we are continuously engaged with the IMF in order to conclude it at the earliest.”

On Sunday, the IMF country representative also denied any link with past or current IMF supported programs and decisions by any Pakistani government over its nuclear program.

Last week, Dar said an assurance from "friendly countries" to fund a balance of payment gap was the last hurdle in securing the IMF deal, which will offer a critical lifeline to avert an economic meltdown.

The latest tranche of funds are part of a $6.5 billion bailout package the IMF approved in 2019.

The latest deal will also unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves, which have fallen to four weeks worth of import cover.

The IMF wants Pakistan to get the assurance for up to $7 billion to fund this fiscal year's balance of payments gap. Dar has been saying it should be around $5 billion.

New York Community Bank to buy failed Signature Bank

Updated 20 March 2023
AP

New York Community Bank to buy failed Signature Bank

  • The 40 branches of Signature Bank will become Flagstar Bank. Flagstar is one of New York Community Bank’s subsidiaries
  • Signature Bank was the second bank to fail in this banking crisis, roughly 48 hours after the collapse of Silicon Valley Bank
Updated 20 March 2023
AP

NEW YORK: New York Community Bank has agreed to buy a significant chunk of the failed Signature Bank in a $2.7 billion deal, the Federal Deposit Insurance Corp. said late Sunday.
The 40 branches of Signature Bank will become Flagstar Bank, starting Monday. Flagstar is one of New York Community Bank’s subsidiaries. The deal will include the purchase of $38.4 billion in Signature Bank’s assets, a little more than a third of Signature’s total when the bank failed a week ago.
The FDIC said $60 billion in Signature Bank’s loans will remain in receivership and are expected to be sold off in time.
Signature Bank was the second bank to fail in this banking crisis, roughly 48 hours after the collapse of Silicon Valley Bank. Signature, based in New York, was a large commercial lender in the tristate area, but had in recent years gotten into cryptocurrencies as a potential growth business.
After Silicon Valley Bank failed, depositors became nervous about Signature Bank’s health due to its high amount of uninsured deposits as well as its exposure to crypto and other tech-focused lending. By the time it was closed by regulators, Signature was the third largest bank failure in US history.
The FDIC says it expects Signature Bank’s failure to cost the deposit insurance fund $2.5 billion, but that figure may change as the regulator sells off assets. The deposit insurance fund is paid for by assessments on banks and taxpayers do not bear the direct cost when a bank fails.

Topics: Signature Bank New York Community Bank Federal Deposit Insurance Corp. Flagstar Bank

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Munjz takes pivotal step in its business model, secures $5 million in funding 

Updated 19 March 2023
Nour El-Shaeri 

Munjz takes pivotal step in its business model, secures $5 million in funding 

  • Company provides property management system for community managers
Updated 19 March 2023
Nour El-Shaeri 

CAIRO: Saudi Arabia’s Munjz joins the property technology sector after taking a pivot that has changed the company’s mission and opened doors to new opportunities. 

Established in 2017, Munjz first started as a platform for homeowners to connect with certified home service providers but, by the end of 2021, the company took a pivotal step after the founder recognized that the property management sector holds a large opportunity as it is worth over $1.8 trillion globally. 

In an exclusive interview with Arab News, Abdullah AlDaij, CEO and founder of Munjz, said, “We pivoted our business model to be in the business-to-business sector and to classify our company as a proptech company seeing that around $25 billion were invested in the global proptech industry, which is around 27 percent from the global funding in 2021. Our vision is to digitalize vertical industry businesses by providing software and services at the same time.”

Capitalizing on the new trend, he decided to create a property management system software while incorporating the home services platform to bring the best of both worlds. 

The company provides a property management system for community managers to run everything from financial to operational functions through the software. In addition, managers also have access to the marketplace of service providers like house cleaning, maintenance and material supply, which can be utilized to better operate the business. 

Residents also have access to the home services marketplace that is white labeled under Munjz to also cater to its direct-to-consumer segment. 

FASTFACT

$1.8 trillion

Munjz took a pivotal step after the founder recognized that the property management sector holds a large opportunity as it is worth over $1.8 trillion globally.

“We have three different customer segmentations,” AlDaij explained, “in residential, I’m talking about compounds, real estate, developers, community association, hospitality, and property managers.” 

“The second segment is commercial where we are targeting retailers, offices, food and beverage, warehouses, healthcare centers and education centers. The third segment is the service companies that are in our marketplace, we are talking about professional services, cleaning services, hospitality services and logistics,” he added. 

Through its new customer segmentation pivot, Munjz managed to open room for more revenue streams to support the business. 

Abdullah AlDaij, Munjz chief executive officer. (Supplied)

“We have three main revenue streams,” he explained. “The first is from the marketplace, from our service providers. We are capturing a commission base from every service closed.” 
“The second revenue stream is the subscription fee to access the platform and the third revenue stream is from the end user who is requesting a service from the property manager,” he continued, explaining that the third revenue stream is the company’s white label services that are provided to property managers to cover residential orders. 

As the company pivoted to its new model just seven months ago, AlDaij predicts to hit profitability in 18 to 24 months through expansion plans into the aforementioned segments. 

“We operate in 15 cities in the Kingdom. By the first quarter of next year, we will expand to Egypt and Abu Dhabi. Our shift is going to be more convenient for us for global expansion because now we are focusing on our software as a service solution,” AlDaij stated. 

He added that the company will only focus on the PMS software in its expansion plans because of its convenience.  

“Inside the Kingdom, we are strong enough in terms of the marketplace because we have already built this network for the last five years. So, we have more than 3,500 service providers that are working with us, and all these companies are now available to our B2B clients,” he stated. 

As the company expands, AlDaij stated that Munjz will go through a shortlisting process for its service providers to offer better experiences to its clients. 

The company currently has 79 business accounts that include “Dunkin Donuts, McDonald’s, DHL and one of the biggest development companies in Saudi Arabia called Almajdiah, which has more than 20,000 units under its umbrella,” AlDaij added. 

Moreover, he stated that the company is expected to reach 300 business clients by the end of this year. 

Last month, Munjz raised $5 million in a series A funding round led by undisclosed investors with participation from Vision Ventures, Almajdiah Investment Co. and Watheeq Proptech Fund. 

AlDaij shared that the company will utilize its funding in product development and technology as well as structuring Munjz. 

“Because our customers are different it means the company is different. Therefore, the structure and the team members should be taken into consideration to look after the talent who can run this new strategy. The investment is going to be mainly in structuring the team members and looking after the talents and engineers,” he stated. 

Munjz currently has 50 employees and will reach 85 staff members by the end of this year. 

AlDaij concluded by stating that the Saudi property management sector will grow significantly in the coming years, as it was worth $23 billion in 2021 and is projected to reach $35 billion by 2028. 

Topics: Start-up of the Week Saudi

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Riyadh Cables expects to maintain double-digit profit driven by giga projects

Updated 19 March 2023
SYED AMEEN KADER

Riyadh Cables expects to maintain double-digit profit driven by giga projects

  • Firm recorded impressive net profit of SR351.9 million for 2022, an increase of 46.6 percent over the previous year
Updated 19 March 2023
SYED AMEEN KADER

RIYADH: In its first-ever public result after being listed on the Saudi Stock Exchange, Riyadh Cables Group Co. announced an impressive net profit of SR351.9 million ($93.84 million) for 2022, registering an increase of 46.6 percent over the previous year. 

The Riyadh-based firm recorded revenue growth of 40.3 percent to SR6.9 billion during the same period, while its sales volumes increased by 37.1 percent to 190 kilo tons.  

The robust performance prompted RCG’s board to propose dividends of SR225 million at SR 1.50 per share for the financial year 2022, in line with its previous guidance and subject to shareholders’ approval at the Annual General Meeting.  

In an exclusive interview with Arab News, the company’s CEO Borjan Sehovac, said: “Strong local and regional demand drove an increase in sales volumes, resulting in a boost to sales growth. Profitability was enhanced by successful SG&A (selling, general and administrative expenses) optimization measures and overall cost management.”  

Riyadh Cables Group Co. CEO Borjan Sehovac. (Supplied)

He went on to add that RCG’s ability to win a larger share of bids locally and regionally was due to its “stellar reputation which we built along the decades.”  

With strong activity expected to be sustained in RCG’s core Middle East markets, he said they anticipate substantial demand-led growth in revenue in 2023, remaining healthy in the range of 3 percent to 5 percent, “while capex of SR200-plus million is expected to support the strong order backlog.”  

The company expects its net profit to increase by a double-digit figure in the financial year 2023. 

Tadawul listing 

Founded in 1984, RCG got listed on Tadawul on Dec. 19, 2022, after successfully raising $378 million from an initial public offering.  

After a long and strong track record, in which the company has achieved a leadership position in its sector, Sehovac said the IPO was a “natural next step on our growth journey – increasing our profile, strengthening our institutionalization drive and positioning us for future expansion.”  

Sehovac calls 2022 a “historic year” for their business, not least for the successful debut of RCG on the Saudi Exchange, but for reporting significant growth in both sales volumes and revenues for the full-year 2022.

“The company’s strong sales, coupled with an unwavering focus on operational excellence and efficiency, have not only resulted in impressive profitability but also ensured sustainable long-term growth,” said the CEO.  

RCG is among the 18 companies or funds that offered parts of their shares through IPOs during last year as the Saudi Stock Exchange continues to drive market growth in the region.  

At the end of 2022, Tadawul had a total of 223 listed companies, with the total offered value reaching SR37.51 billion as 2.96 billion shares/units were offered for all IPOs.  

Sehovac said the Saudi capital market is the region’s largest, most liquid and most attractive market. 
“Backed by the ambitions of Saudi Vision 2030, the underlying evolution of the Kingdom is, and will always be reflected in its financial markets,” he said, adding that they are proud to be active participants in it. 

The Riyadh-based firm recorded revenue growth of 40.3 percent to sR6.9 billion in 2022, while its sales volumes increased by 37.1 percent to 190 kilo tons. (Supplied)

Growth prospects   

RCG, which serves customers in Saudi Arabia, the Gulf Cooperation Council and international markets, is bullish about the growth prospects of the cables industry.  

“All global trends and indicators confirm that the power cables market is expected to grow globally based on the ambitious development plans and major demand drivers, such as energy transition and digital transformation,” said RCG CEO.  

On a local level, he said the power cables market in the Kingdom is expected to grow at a compound annual growth rate of 8.3 percent between 2022 and 2027 to reach SR16.8 to SR18.7 billion, driven by giga/mega projects as well as industrial and housing development.  

“RCG, being the largest player in the region, is ideally positioned to benefit from this growth,” he affirmed. 

Expansion strategy 

The company owns and operates 15 cable and related materials manufacturing and testing facilities, extending over 1.5 million sq. m in Riyadh, Sharjah and Baghdad. Its manufacturing infrastructure is integrated across the value chain including six factories to manufacture raw materials used in the cables industry to support its own nine cables factories. 

“This makes us self-reliant while also improving our manufacturing efficiency by being able to control the cost and quality of our manufacturing materials,” Sehovac said.

Asked about its expansion plan, he replied the company will expand its footprint in due course, and “we’ll make announcements to the market at the appropriate time.” 

RCG has a vast regional distribution network and a production capacity of 264,000 tons per year. 

Sehovac said the company is continuously looking to increase its market share by focusing on increasing sales of its primary products in existing markets and expanding to neighboring markets.  

He clarified that the company doesn’t have any immediate plans to raise funding as “we are a well-funded business with a strong balance sheet and plenty of headroom to grow.”   

With regard to the supply chain — as the raw materials are mostly imported —how does the company ensure smooth supply amid the volatile pricing of metal and aluminum?   Sehovac insists that the company always strives to increase the percentage of local content in its manufacturing process. 

“In fact, RCG sources its needs of aluminum, lead, and polymers locally. The company buys its core manufacturing materials through long-term contracts,” he revealed, adding that they also use a well-engineered hedging mechanism to offset commodity price volatility risk and stability of profits. 

ESG goals 

Divulging about the company’s environmental, social and governance strategy, Sehovac said the company owns state-of-the-art recycling facilities for the reuse of recyclable metals, polymers and cable drums, contributing effectively to the sustainability processes.  

“ESG is at the heart of RCG’s strategy. We are committed to reducing waste and CO2 emissions,” he said, adding that they are amongst key suppliers of renewable energy projects, supporting the Kingdom’s plans for generating 58.7 gigawatts of renewable energy with locally manufactured products. 

The CEO called Vision 2030 as “a roadmap for its investment plans, and to be a key player in delivering the vision’s objectives.” 

“This is a fantastic opportunity for our business and one that we are fully capitalizing on,” he concluded.

Topics: Riyadh Cables Group

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