Pakistan, Egypt and other developing countries facing a debt crisis

Burqa-clad women wait for free bread at a distribution point in Peshawar, Pakistan, on April 3, 2023. (AFP)
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Updated 06 April 2023

Pakistan, Egypt and other developing countries facing a debt crisis

  • Months of political turmoil, worsened by crippling floods last year and record inflation, put Pakistan in danger zone
  • Talks with IMF for a delayed $1.1 billion loan tranche, part of $6.5 billion bailout agreed in 2019, have dragged on

LONDON: The record number of developing nations at risk of a debt crisis will be high on the agenda next week when central bankers, finance ministers and political leaders convene for the World Bank Group and International Monetary Fund (IMF) spring meetings.

Ballooning inflation, escalating borrowing costs and a strong dollar have made repaying loans and raising money significantly more expensive for dozens of developing nations, pushing several into default last year.

Below is a look at countries that face a debt crunch or have already defaulted on international loans.

Months of political and economic turmoil, worsened by crippling floods last year and record inflation, put Pakistan in the danger zone.

China agreed to refinance $1.8 billion already credited to Pakistan’s central bank, and last month rolled over a $2 billion loan that had matured earlier in March, providing relief during Pakistan’s acute balance of payments crisis.

But talks with the IMF for a delayed $1.1 billion loan tranche, part of $6.5 billion bailout agreed in 2019, have dragged on and foreign exchange reserves have fallen to less than four weeks of imports.

Egypt’s tourism-dependent economy was hammered by the one-two punch of COVID-19 and soaring food and energy prices, leaving it short of dollars and struggling to pay rising debts.

Cairo secured a new $3 billion IMF package in December by committing to a flexible currency, a greater role for the private sector and a range of monetary and fiscal reforms.

Import and currency restrictions have weighed on economic activity, and a foreign currency shortage continues despite three sizable devaluations since March 2022 that halved the value of the pound. Inflation stands now at a more than five-year high above 30 percent.


El Salvador cleared a $600 million bond payment hurdle in January. The Central American country has roughly $6.4 billion in outstanding Eurobonds. While the next payment is not due until 2025, concerns about El Salvador’s high debt service costs and its financing plans and fiscal policies have pressed its bonds into deeply distressed territory.

The country’s move to make bitcoin legal tender in September 2021 effectively closed the doors to IMF financing. However, the risks over El Salvador’s embrace of bitcoin “have not materialized,” the IMF acknowledged.

Ghana is in its worst economic crisis in a generation, spending over 40 percent of government revenues on debt payments last year. In January, it became the fourth country to seek a rework under the Common Framework.

The West African country secured a $3 billion agreement with the IMF in December, though it still needs to get financing assurances from bilateral lenders to clinch the final sign-off. The cocoa, gold and oil producer has already reached a deal to write down domestic debt and last week kicked off formal debt talks with international bondholders.

Lebanon’s financial system began unraveling in 2019 after decades of mismanagement and corruption, and in early 2020 it defaulted. Lebanon has had neither a head of state nor a fully empowered cabinet since Oct. 31.

It reached a provisional $3 billion IMF agreement in April 2022, but the fund recently warned Lebanon was “in a very dangerous situation” due to delays on a range of reforms, including banking and exchange rate overhauls. Beirut devalued the official exchange rate for the first time in 25 years in February. Last month its central bank said it would begin selling unlimited amounts of US dollars to halt spiralling devaluation.

Malawi is grappling with foreign exchange shortages and a budget deficit of some 1.32 trillion kwacha ($1.30 billion), or 8.7 percent of GDP.

The donor-dependent southern African nation is trying to restructure its debt in order to secure more funding from the IMF, which approved emergency funds in November.

The tourism-dependant North African economy is in the throes of a punishing crisis that led to a shortage of basic food items.

A $1.9 billion IMF loan has been stalled for months as Tunisia’s president has shown little sign of action on key reforms. Most debt is internal but foreign loan repayments are due later this year. Credit ratings agencies have said Tunisia may default.

Sri Lanka defaulted on its international debt last year after economic mismanagement, exacerbated by the COVID-19 pandemic, sparked a political crisis and left it without dollars for even essential imports.

The IMF signing a $3 billion bailout package last month could help the South Asian island country secure additional support of nearly $4 billion from the World Bank, Asian Development Bank and other lenders.

Government officials aim to complete debt restructuring talks by September. Sri Lanka is also reworking part of its domestic debt and aims to finalize it by May.

Ukraine just received the first $2.7 billion tranche under a four-year, $15.6 billion IMF loan program. This is part of a bigger $115 billion global package of support.

The country suspended all debt payments last year in the wake of Russia’s invasion, and will need to restructure its borrowings if and when the situation stabilizes.

The IMF estimates Ukraine needs $3-$4 billion a month to keep the country running. Rebuilding Ukraine’s economy is now expected to cost $411 billion, a recent report by the World Bank and others found.

The first African country to default during the COVID-19 era in 2020, Zambia is seen as a litmus test for the G20’s Common Framework initiative set up during the pandemic to streamline debt restructurings. But talks have been remarkably slow, and external debt crept up to $18.6 billion.

Western officials have blamed China, its largest bilateral lender, for the hold-up, something that China disputes. There have been broad disagreements about how much debt the country can afford going forward.

Zambia’s currency, the kwacha , has fallen more than 10 percent against the US dollar this year, which the central bank has said is adding to inflation. It blamed the drop partly on debt restructuring delays.

ACWA Power CEO ‘confident’ of China deal in next few months

Updated 04 December 2023

ACWA Power CEO ‘confident’ of China deal in next few months

DUBAI: Energy company ACWA Power is getting closer to securing its first deal in China, the firm’s CEO Marco Arcelli told Arab News on the sidelines of the UN Climate Change Conference. 

The Saudi-based firm has seen its ties with the Asian country grow in 2023, including signing seven cooperation agreements with various Chinese firms in October across multiple sectors, including solar energy, green hydrogen, and water desalination.

Speaking from the COP28 forum in Dubai, Arcelli set out how the expansion into the Chinese market is part of the company’s plan to increase the value of its asset book to $250 billion, as it is develops across Central and East Asia. 

“Right now, the single biggest country is Uzbekistan for the new activity, and all of Central Asia we see coming up with a lot of potential. The next target for us is China. And I am confident that within a few months we will be able to announce the first deal in China,” Arcelli said.  

Elaborating on the recently signed memorandums of agreement with Chinese firms, the CEO highlighted the firm has three main objectives when it comes to expanding into the Asian country.

The first is to keep working with the Chinese in regional and global projects, the second is to expand investments in the country itself, while the third is closer working on research and development.

Arcelli added: “We’re working a lot, particularly in the Shanghai area and with a lot of suppliers. To give you some idea of the activities we are working on. You know that here in the Gulf, temperatures are very high. The efficiency of the solar panels decreases.

“We are working with suppliers on how we can make the panels more suitable for installations to our region. It is going to benefit us, but it is also going to benefit all the industry in the end.” 

He further outlined that ACWA Power is discussing ways for Chinese companies to “localize in Saudi Arabia” by demonstrating the “solid program” they have integrated in the Kingdom.  

According to the CEO, the company is also in talks with other nations from Central Asia in hopes that they will develop the needed equipment locally, thus creating a strong ecosystem for growth in Saudi Arabia. 

ACWA Power signed Memorandums of Understanding with two Chinese firms in Riyadh in September

Outlining the Kingdom’s potential and role within the Saudi renewable sphere, the CEO highlighted that the company will be responsible for delivering the Public Investment Fund program of 70 percent of the renewable energy that will be installed in the country.  

‘‘We have a goal of tripling the size of the company to about $250 billion of assets under management, up from less than $80 billion when I joined at the beginning of the year,’’ said Arcelli. 

The CEO flagged up the Red Sea Global project in Saudi Arabia as one of the key developments it is involved in, and said: “We just completed the first phase of the Red Sea Global, which is going to be one of the best and biggest tourist attractions in the world. 

“We are providing the utilities there to these resorts and that one is 100 percent powered by green electricity. That means not only the power generation, but also the desalination and the wastewater that we are using there. 

“That will go through a process where we are going to create mangrove wetlands so that basically that’s going to be part of the Saudi Green Initiative to plant the 1 billion trees by 2030.’’ 

Arcelli also underscored the various milestones and achievements registered by the company in 2023, saying: “I just joined in March this year. So, I have been here for eight months and the speed of growth and of activity in the company is just phenomenal. In the past eight months, we signed agreements for almost 10 gigawatts of power between Saudi Arabia, Uzbekistan and other countries.

“We have signed water agreements for 1.4 million cubic meters per day in Saudi Arabia and in the Emirates. We just broke ground this week on the second green hydrogen project that we participate in. All together we are growing in renewables and we’re growing in water by 20 percent this year.”

He also talked up the firm’s position as a “leading player” in the green ammonia industry, and its moves in transitioning facilities away from fossil fuels.

“For instance, recently in the Emirates, we converted a power plant that was built for using coal and we converted it to gas,” he said. 

ACWA Power also converted a water desalination plant that was running on oil to reverse osmosis power by electricity. This has led to a saving of 22 million barrels of oil per year, informed Arcelli. 

Together with the Saudi Electricity Co., ACWA Power has also recently bagged the deal for setting up a 3.6 gigawatts combined cycle plant.  

Like many companies emerging from a legacy of fossil fuels, ACWA Power was “practically producing 100 percent electricity from fossil fuel until six or seven years ago,” said Arcelli. 

Today, 43 percent of the company’s capacity, 53 GW, is coming from renewables, and the CEO expects that number to rise to between 70-80 percent.

As part of its mission to be an enabler of energy transition in countries that primarily only have access to coal or more polluting fuels, the company does not intend to entirely stop working with gas-fired combined cycles, Arcelli said. 

Operating in the Global South, Africa, South East Asia and Central Asia, as it stands, does not allow for a complete, 100 percent transition of the needed energy in the region to renewables. 

“We will do as many renewables as we can and complement that together with the goals and the plans of the local government to some combined cycles. We have a deadline for achieving net zero by 2050. Again, one of the reasons is that there is now a period where gas will still be required there – basically to fuel – but as we continue to add more renewables and more capacity over the long term, that is the goal,” he said.  

ACWA Power is also looking at other emerging dimensions of renewable energy, like the large capacity battery storage. “We believe that as you introduce more renewable energy into a system, the more you need to think about how to stabilize the grid,” Arcelli said.

He added: “There are multiple ways. One is the system itself. So, if you have combined cycles, flexible generation, as we call it, then you can use that as a backup solution in other areas where you are blessed by a lot of sun. 

“One of the greatest technologies is concentrated solar power. We do it here in the Emirates, so we do it in Morocco, we do it in South Africa, and we are exploring other countries.

Arcelli said having “the power of the sun 24 hours a day” would be of huge benefit as he talked up ACWA Power’s battery storage program, which he claimed is equivalent to the whole battery storage capacity installed in all of Europe in 2022. 

For ACWA Power, the biggest such project is the RSG, which has grids that detach themselves from the main grid. Since it is solar, the project needed to have battery storage. Arcelli said that it is a massive 1.2 GWH for 400 megawatts of solar, so that one can have it all the time. 

Arcelli was full of appreciation for the rapid transitions in energy provision being made by Saudi Arabia and the UAE, claiming the two countries are “leading the pack” in the transition. 

“Both have, you know, very significant targets, Saudi Arabia to reach 50:50 renewables and combined cycles by 2030. That’s only seven years away. So that’s a massive programme. And the Emirates, they want to triple renewable energy capacity by 2030,’’ he said. 

He pointed out that ACWA Power was a big player in both countries, adding: “That is how we bring our contribution, by bringing all the technologies and the financing from around the world, choosing the best and applying it so that we can offer the most competitive rates. Europe started really 20 years ago.

"The region here, of course, had abundant fossil resources. So there was maybe not as much urgency 20 years ago as there is today.”

Arcelli continued: “But I see basically all the countries here in the region taking that direction. And as I mentioned, it is just a matter of when, not if. Some started earlier with the visionary leaders that, you know, we were blessed with, and others are certainly coming along very positively.” 

Looking at the state of the global energy businesses, Arcelli said that he felt the industry had taken to renewables as a whole for a variety of factors, but most notably due to its economic reasoning.  

“I think that in power generation I don’t even talk anymore about renewables because that’s what everybody wants to do. The only time where we are not installing renewables is because you need to either grow a lot quickly and so you need also other types of generation or you want to complement your system,” he said.

Arcelli added: “For instance, you may have some solar, some wind, some nuclear, some gas fired generation, but let’s not debate that because renewables are not built by ideology today, they are built because they are the most efficient, they are the most secure, and that they are the most affordable type of energy that you can install.’’ 

Construction capacity in Saudi Arabia needs to grow double-digits annually to meet demand, Egis CEO says

Updated 25 October 2023

Construction capacity in Saudi Arabia needs to grow double-digits annually to meet demand, Egis CEO says

RIYADH: Construction sector capacity available to Saudi Arabia must witness double-digit annual growth to cater to the Kingdom’s infrastructure expansion, according to the group CEO of France’s Egis.

Speaking in an interview with Arab News on the sidelines of the first day of the Future Investment Forum, Laurent Germain explained that foreign companies could meet this demand, particularly those from France.

The CEO clarified that such growth will help projects in the Kingdom to transition from the design to the construction phase easily.

When asked how much the construction sector needs to grow by in order to satisfy current and future demand, he replied: “I would say double digit every year. I think the capacities of the contractors should increase in Saudi Arabia, double digit, more than 10 percent per year to achieve, I would say, the transition from projects currently in design into the construction phase.”

Germain added: “I am doing my best to convince the big French contractors, and we have very big, you know, French contractors like Vinci, like Greg, Eiffage, to come more to Saudi Arabia, because I tried to convince them that the business environment is now very pro-business.” 

He continued that Egis is keen on utilizing advanced technical solutions at each stage of infrastructure development to propel the Kingdom’s trajectory towards its net carbon objective.

“Using digital like the digital twin, the digital replica of an infrastructure, which allows us at the stage of the design of the infrastructure to make calculations on the impact on the greenhouse emissions,” the CEO stressed.

He added: “We need to catch up with the pace with which the country is developing, which is absolutely wonderful.”

Germain highlighted that Saudi Arabia achieved 8 percent growth in gross domestic product in 2022, exceeding other G20 countries in performance. 

“This is why all the business community is now rallying at the FII,” he affirmed.

World leaders, industry titans, and global financiers are set to gather in Riyadh for the seventh edition of the FII from Oct. 24-26.   

Under the slogan “The New Compass,” the attendees will discuss climate, economy and technology issues.   

The FII acts as a catalyst for crucial talks around the macroeconomic challenges communities face.   

This year’s conference will also shed light on the role of governments and the transformative potential of technology, education, and healthcare in shaping a more prosperous future.

Millions of MENA livelihoods under threat as temperatures rise: WEF report

Updated 19 October 2023

Millions of MENA livelihoods under threat as temperatures rise: WEF report

  • New World Economic Forum report urges action to close climate gap by increasing decarbonization and energy transition in Middle East and North Africa
  • Temperatures rising at twice global rate, impacting agriculture and livability

DUBAI: The livelihoods of over half a billion people in the Middle East and North Africa are under threat if current projections are realized of a 4 Celsius temperature increase by 2050.

This is according to the World Economic Forum’s report “Closing the Climate Action Gap: Accelerating Decarbonization and the Energy Transition in MENA,” which highlights sustainability challenges in the region, while also laying out a plan to fuel new economic opportunities.

Developed in collaboration with Bain & Company, the report features contributions from more than 40 policymakers, climate actors, business leaders, as well as banking and industry experts from the private and public sectors who form the WEF’s Leaders for a Sustainable MENA.

“The MENA region has been one of the fastest growing regions over the past decade and there is a pathway for the region to position itself at the forefront of sustainability efforts while maintaining its upward economic trajectory,” said Borge Brende, president of the WEF.

“As global markets continue to shift, and energy demands rise, the region requires bold and coordinated action from policymakers and businesses to lead a just energy transition and meet both climate- and development-related goals,” he added.

The report’s research found that temperatures in MENA are rising at twice the global average rate, presenting myriad challenges that could threaten the livelihoods of the region’s population of 575 million people — 70 percent of whom live in low-income countries.

Rising temperatures and prolonged droughts are among the climate shocks that could impact agriculture and livability in the MENA region, the report indicates.

It also found that MENA countries trail behind comparable regions in terms of their sustainability progress. While local governments have pledged to bring 60 percent of MENA’s emissions under the net-zero ambition in the last two years, businesses overall have yet to follow suit and bridge the gap with comparable global markets.

In the past two years, an estimated 60 percent of the region’s emissions and gross domestic product have come under net-zero pledges. However, when it comes to businesses, only 12 percent have set up a net-zero target and 6 percent have established a roadmap to reach net zero.

“Successfully transitioning to a sustainable future will hinge on bold measures from policymakers and companies, raising awareness and multi-stakeholder partnerships,” said Tom De Waele, managing partner of Bain & Company Middle East.

Although sustainability action for the region requires “significant investment of time and resources, it also represents a significant economic opportunity, which could well position the MENA region at the heart of global energy transition and unlock doors to economic diversification, high-quality job creation, and global leadership in low-carbon technologies,” he added.

The MENA region contains almost half of proven global oil reserves and delivers around 30 percent of global oil production, making it crucial for it to take responsibility in leading decarbonization efforts on conventional energy.

Moreover, its key export markets, such as the EU, China and the US, among others, are tightening emissions-related regulations.

Thus, while decarbonization could be seen as an added cost or risk, it also provides a huge opportunity for MENA, the report asserts.

The region also has abundant natural resources like solar and wind energy, as well as land availability, which paves the way for it to become a global leader in new energy, such as renewables and clean hydrogen.

To safeguard economic growth and global energy influence, Gulf nations should focus on technology-based solutions that reduce emissions in challenging sectors, optimize consumption, transition to renewables and implement carbon capture at scale, the report suggests.

The report added that non-Gulf countries should prioritize affordable energy, particularly in low-income areas, by increasing renewable energy usage, phasing out regressive fossil fuel subsidies and supporting carbon credit projects.

MENA carbon market likely to reach around 150m tons by 2030

Updated 12 October 2023

MENA carbon market likely to reach around 150m tons by 2030

RIYADH: Expressing her optimism about the prospects of voluntary carbon credits, the CEO of Regional Voluntary Carbon Market Co. expects a positive response from the Middle East and North Africa region, with the market set to reach 100-150 million tons by 2030.
Efforts to mitigate the effects of climate change are also likely to get a boost, as Saudi Arabia is on track to establishing a carbon credit exchange platform by the second half of 2024.
Speaking to Arab News, Riham ElGizy highlighted three main offerings that the exchange market will provide. 
She said it is “going to be a spot market to help price discovery by 2024. We will have as well in that exchange over-the-counter (trading), we will have a marketplace for suppliers to sell their own product(s).”
ElGizy said before the establishment of the platform RVCMC will make available exchange and advisory services to buyers and suppliers. 
“We’re not waiting till the exchange comes online by 2024.” 
Referring to the carbon offset auction held in Nairobi in June, the CEO described it as the “biggest ever” in the history of the market in which 16 Saudi companies representing major economic sectors took part.
A carbon credit or offset credit is a transferrable financial instrument certified by governments or independent certification bodies to represent an emission reduction that can then be bought or sold. It is bought to compensate for the emissions of carbon dioxide or other greenhouse gases. 
“If you talk about the oil and gas sector, we had Saudi Aramco, the biggest oil and gas company in the world, and we had SABIC. If we talk about the construction sector, we had with us the cement company Yanbu Cement, and we had also ENOWA,” she said. 
Other companies that participated in the auction included Golf Saudi, Saudi telecom giant stc, Saudi Electricity Co., and the Saudi National Bank. 
“The aviation industry was represented by Saudia, which is a great partner to us as well,” she added. 
That auction witnessed a trade of 2.2 million tons of carbon credits. Putting that number into perspective, she noted that this is equivalent to the emissions of approximately 650,000 family cars for one year. 
Last year, the global trade in voluntary carbon market transactions amounted to 150 million tons of CO2 emissions, with a corresponding value of $2 billion, a quantity comparable to the emissions of a nation such as Algeria. 
“Which is very good, but not good enough,” ElGizy said. 
Zooming in on the MENA region, the CEO mentioned that when they first started there was no supply and no demand. She stated that their global market share reached 3 percent over the past year, primarily as a result of two successful auctions they conducted, with the first auction taking place during the first day of the 6th Future Investment Initiative held in Riyadh. 
ElGizy remarked “The (carbon credit) market globally is growing at 30 percent per annum and the MENA region will grow proportionately with that. We expect the market to reach 100 to 150 million tons by 2030, which represents the forestation for a country like Germany.” 
In voluntary carbon markets, companies or individuals use carbon offsets in order to meet self-defined goals for reducing emissions. 
RVCMC, established in October last year, is 80 percent owned by the Public Investment Fund, and 20 percent by Tadawul Group with a SR500 million ($133 million) capital.
The company, which allows carbon emitters to offset their emissions by purchasing carbon credits, seeks to be a global leader in the carbon market. 
“Not only serving the Saudi market or even the MENA region, we want to be a global market and we can do that,” she noted. 
Furthermore, it aims to accelerate climate action and to be the leader in the Global South. 
“What we provide is very different than a typical carbon market because we look at it holistically from an ecosystem perspective,” ElGizy said. 

NEOM Green Hydrogen Co. considering investments across the region

Updated 11 October 2023

NEOM Green Hydrogen Co. considering investments across the region


RIYADH: Energy firm NEOM Green Hydrogen Co. is considering investments and potential expansions across Saudi Arabia and beyond, a top official has revealed.

In an interview with Arab News on the sidelines of the Middle East and North Africa Climate Week in Riyadh, the company’s CEO, David Edmondson, discussed the energy transition journey in the MENA region, highlighting that a facility is slated to begin full-scale production of green ammonia by the end of 2026.

“We are interested in the next phase of investment. We’re doing various feasibility studies on what we could do, debottlenecking the existing plant and potentially looking at future investments. I can see additional investments in NEOM Hydrogen Co. but also across the whole of Saudi Arabia and in the MENA region,” said Edmondson.

He added: “No one has ever built a plant of this size or scale before. So this is the first of its kind, and we’re about four or five times bigger than any other plant that’s being considered even right now.

“We would like to provide additional investments to address the domestic market. However, the focus really right now is getting this project up and running and moving.”

Edmondson added that Saudi Arabia will soon become a global leader in exporting green hydrogen, attracting investors in the sector.

“Technologies keep developing. The investment situation is constantly changing. But I think with the commitments that Saudi Arabia has made through its Vision 2030, the aspirations they have to become a leading exporter, it provides a very positive location for investing at this level and exporting green hydrogen to the world,” said the executive.

Edmondson confirmed that the first wind turbines have been delivered to the port of NEOM, with hydrogen storage tanks arriving in November.

“We’re expecting to start producing ammonia, that is green ammonia, by the summer of 2026 and expect full production by the end of 2026,” he added.

NGHC is a joint venture between ACWA Power, Air Products, and NEOM.

Apart from limiting carbon emissions and promoting sustainable development in Saudi Arabia, this project is expected to contribute to the country’s diversification efforts.

The firm is set to sell its goods through US-based company Air Products, which has agreed a 30-year offtake, according to Edmondson.

“They’ve made very specific downstream commitments in Europe, in the UK, Germany and the Netherlands. They’ve got receiving terminals. They’ll break that back down to hydrogen and then they will sell that locally. So those investments are already going on,” he said.

He further noted that the NGHC reached financial closure for its green hydrogen plant in May.

It finalized backing agreements with 23 local, regional, and international banks and investment firms to construct a green hydrogen production facility with a total investment value of $8.4 billion.

He added: “We actually committed back in 2020 to arrive at $900 million of shareholder funding to continue the work, to start placing the contracts that we needed to with financial close. We now have all the financing we need.”

The structure is being built at Oxagon, within Saudi Arabia’s $500-billion project NEOM.

Edmondson added that NGHC is currently in its next investment phase and is busy expanding its operating team.

“We’re already hiring our operations teams. We obviously have to provide training to those individuals. We want to provide opportunities for local Saudis. So yes, we are interested in the next phase of investment,” said Edmondson.

During the talk, the CEO noted that the plant aims to produce 600 tons a day of carbon-free green hydrogen by 2026.

“The project is really focused on the export market because back in 2019 and 2020, there wasn’t really a domestic market that was fully established. A lot is changing and I imagine in the next 2 to 3 years, the local market will continue to evolve and develop,” said Edmondson.

He added that all the products are for exports, saying: “If you look at that in light of the Vision 2030 commitments, the Kingdom is looking to export 4 million tons per year of low-carbon hydrogen by 2030. So we’re making 250,000 tons of that by 2026.”

Edmondson further emphasized that NGHC’s efforts will play a significant role in fulfilling the Kingdom’s adherence to becoming the world’s largest exporter of carbon-free hydrogen.

“Saudi Arabia is committed to being the largest exporter of low-carbon hydrogen. They've made some very bold aspirations. Clearly, NEOM Green Hydrogen Co. is at the beginning of that journey. We expect many others to follow,” said Edmondson.

He further highlighted that the world will soon see a variety of vehicles powered by hydrogen fuel, adding: “We'll see busses, trucks, trains even operated on hydrogen.”

Earlier in October, Saudi Arabia’s national railway company entered into an agreement with French rail transportation giant Alstom to commence testing for its ambitious hydrogen train project.

According to a Saudi Press Agency report, both entities will embark on operational experiments and studies to assess the trains’ compatibility with the environment, setting the stage for their future deployment.

Addressing the ongoing energy transition and climate-related concerns, Edmondson pointed out that the upcoming COP28 conference in the UAE this winter will act as a turning point for addressing the challenges posed by global warming.

“The dialogue on climate change has been going on for many years. I think there have been a lot of people who don't believe it. Increasingly it’s more obvious, and I think particularly to the younger generation will inherit the earth. So they see the urgency behind it,” he said.

Although significant investments are transpiring in green technology, the CEO added that limiting the global average temperature rise of 1.5 degrees Celsius as outlined in the Paris Agreement remains a challenge.