The development of Saudi Arabia’s renewable energy sector could result in the creation of up to 750,000 jobs over the next decade as the kingdom pushes to generate 7 per cent of its total electricity output from renewables by 2030, according to a study.
Solar power is set to account for 77 per cent of all renewables added to the grid by 2030, with clean energy capacity poised to increase to 5.3 gigawatts over the same period, the US-Saudi Arabian Business Council said.
“In order to achieve its medium- to long-term renewable energy objectives, the kingdom must prioritise the sector within its budgetary planning and allow for continued foreign investment attraction,” the report led by the council’s chief economist, Albara’a Alwazir, said.
“The level of ongoing investment in the sector is expected to create up to 750,000 jobs over the next 10 years, assuming renewables remain a priority sector. Localising the manufacturing base will provide for most of the employment opportunities as the kingdom aims to localise the sector to [between] 40 per cent [and] 45 per cent by 2028 and beyond.”
Saudi Arabia, a founding member of Opec, is the world’s largest exporter of oil. The kingdom has moved away from burning fossil fuel to generate electricity and has made the development of renewable energy for power generation a priority in its push to free up more crude for export.
The kingdom’s energy ministry set up a Renewable Energy Project Development Office in 2018 to oversee the development of solar and wind projects.
It is pursuing an ambitious renewable power strategy and plans to add 60 gigawatts of clean energy capacity to the national grid by 2030. Of this, 40 gigawatts will come from solar photovoltaic plants, 16 gigawatts from wind turbines and 2.7 gigawatts from concentrated solar power, according to the kingdom’s Ministry of Energy.
Earlier this year, Saudi Arabia launched the third round of its renewable energy programme, which is intended to add 1.2 gigawatts of solar photovoltaic power capacity to the grid. The kingdom is also developing its first wind project, a 400MW plant in the Al Jouf region. The project, awarded to Abu Dhabi’s Masdar and EDF, reached financial close last year.
However, the US-Saudi Arabian Business Council said the kingdom’s renewable energy programme could be delayed due to coronavirus-induced project cancellations.
“The negative effects of the pandemic on the renewable energy sector have caused delays in the selection of winning bids for round two of NREP’s [National Renewable Energy Programme] auctions. The final selection for round two was expected to occur in April 2020 but was delayed,” the council said.
Covid-19 is expected to delay the completion timetable for projects tendered under the second renewables round by another year, provided the pandemic is brought under control.
Similarly, an 850MW IPP wind project that is part of the third round of NREP was expected to issue invitations to companies to qualify for bidding. The project was expected to be delivered in April.
“However, there have been no announcements regarding the entities that have been selected to the next round,” the report said.
Saudi Arabia has so far allocated 270 billion Saudi riyals (Dh264.2bn) to help the private sector navigate the coronavirus-induced challenges.
Squads
Pakistan: Sarfaraz Ahmed (c), Babar Azam (vc), Abid Ali, Asif Ali, Fakhar Zaman, Haris Sohail, Mohammad Hasnain, Iftikhar Ahmed, Imad Wasim, Mohammad Amir, Mohammad Nawaz, Mohammad Rizwan, Shadab Khan, Usman Shinwari, Wahab Riaz
Sri Lanka: Lahiru Thirimanne (c), Danushka Gunathilaka, Sadeera Samarawickrama, Avishka Fernando, Oshada Fernando, Shehan Jayasuriya, Dasun Shanaka, Minod Bhanuka, Angelo Perera, Wanindu Hasaranga, Lakshan Sandakan, Nuwan Pradeep, Isuru Udana, Kasun Rajitha, Lahiru Kumara
End of free parking
- paid-for parking will be rolled across Abu Dhabi island on August 18
- drivers will have three working weeks leeway before fines are issued
- areas that are currently free to park - around Sheikh Zayed Bridge, Maqta Bridge, Mussaffah Bridge and the Corniche - will now require a ticket
- villa residents will need a permit to park outside their home. One vehicle is Dh800 and a second is Dh1,200.
- The penalty for failing to pay for a ticket after 10 minutes will be Dh200
- Parking on a patch of sand will incur a fine of Dh300
Terminator: Dark Fate
Director: Tim Miller
Starring: Arnold Schwarzenegger, Linda Hamilton, Mackenzie Davis
Rating: 3/5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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