Saudi Arabia plans to add 9.5GW of renewables to grid by 2023 as it looks to spare more oil for export. Reuters
Saudi Arabia plans to add 9.5GW of renewables to grid by 2023 as it looks to spare more oil for export. Reuters
Saudi Arabia plans to add 9.5GW of renewables to grid by 2023 as it looks to spare more oil for export. Reuters
Saudi Arabia plans to add 9.5GW of renewables to grid by 2023 as it looks to spare more oil for export. Reuters

Saudi leads renewable energy developments with $7bn in new tenders


  • English
  • Arabic

Saudi Arabia, the world’s biggest oil exporter, is expected to lead renewable energy developments this year with up to $7 billion worth of new tenders, according to an official from the International Renewable Energy Agency.

“Saudi Arabia has huge potential because it has a big market and has very ambitious renewable energy targets,” said Rabia Ferroukhi, head of policy unit at the Abu Dhabi-based agency “The regulatory environment is well established now to conduct auctions and attract investors.”

Saudi Arabia is expected to tender over 4 Gigawatts of renewable projects this year, which could be worth anywhere between $5bn to $7bn, she added.

Saudi Arabia, which largely burns oil to generate power, has set ambitious targets to add 9.5GW of renewables by 2023, as it looks to sell more of its crude to export markets. The Saudi energy ministry’s renewables office is expected to tender 3.25GW of solar and 800 Megawatts of wind capacity this year alone.

Saudi Arabia is set to break ground on its first ever solar plant later this year, a $302 million, 300MW solar photovoltaic facility that will be developed by Riyadh-based Acwa Power on the basis of an independent power producer model.

Saudi Arabia’s inaugural 400MW wind project received four bids in April with the kingdom likely to award the scheme later this month.

But Saudi Arabia’s biggest project is a $200bn, 200GW solar development, set to be the world’s largest. Japan’s Softbank and Saudi Arabia’s Public Investment Fund are leading the development, which will be completed by 2030, create 100,000 jobs and reduce the cost of generating electricity.

“The talks between PIF and Softbank become quite important because it shows there is a clear interest from one of the largest investment funds in the world to be involved in renewables in Saudi Arabia,” said Ms Ferroukhi. “But other institutions will be needed, foreign banks, to be involved in the project.”

______

Read more:

China's Silk Road Fund is investing in Dubai solar project, Acwa says

Middle East renewables sector to register 24% CAGR by 2025, says GE

Saudi Arabia's first wind project receives four bids

______

Saudi Arabia is also expected to include elements of localisation in future projects, including Softbank’s development, where winners of  contracts use local services and products in the ventures they are undertaking, according to analysts.

“The localisation requirements for this [Softbank project], if imposed as envisaged, would result in Saudi Arabia gaining the critical mass required to become one of the largest export bases for many components/ products in the solar value chain,” said Abhay Bhargava, director and business head of the Middle East and Africa Industrial Practice at consultancy Frost & Sullivan.

“It would also result in an unprecedented transfer of technology to Saudi Arabia, for not just the products and components, but also for skills and information technology - spurred by the need to integrate such a large base of renewables into the existing grids. Storage solutions would be a critical requirement for solar at this scale - we can expect many grid scale solutions to be tried in the Saudi Arabia for the first time ever in the region.”

For example, the $302m solar project included a 30 per cent local content requirement and the involvement of local banks. The 30 per cent target is expected to be increase further in future tenders.

“Saudi Arabia is in a good place in terms of creating a domestic industry and probably in the long run even exporting at least to the region if not further,” said Ms Ferroukhi.

Saudi Arabia is benefitting from record low prices for solar and wind.

According to Irena, costs for solar PV could drop by a further 60 per cent, offshore wind by 35 per cent and Concentrated Solar Power by 45 per cent over the next decade. CSP comes with storage, which allows the solar power to be fed into a grid even when the sun is not shining. But this also means that CSP is more expensive than PV, which has a quicker installation time because it has fewer moving parts.

Analysts are also bullish on Saudi Arabia’s renewables ambitions and lower prices, given their recent trajectory.

“It is only a question of time when prices for solar PV will drop below 1 cents,” said Cornelius Matthes, senior vice-president of Dii Desert Energy. “Both solar and wind in countries with good yield are now significantly lower than conventional electricity generation. Who would still invest in fossils from now on? Existing conventional assets will have hard time to compete in the daily load curve.”

Citizenship-by-investment programmes

United Kingdom

The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).

All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.

The Caribbean

Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport. 

Portugal

The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.

“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.

Greece

The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.

Spain

The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.

Cyprus

Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.

Malta

The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.

The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.

Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.

Egypt 

A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.

Source: Citizenship Invest and Aqua Properties

Building boom turning to bust as Turkey's economy slows

Deep in a provincial region of northwestern Turkey, it looks like a mirage - hundreds of luxury houses built in neat rows, their pointed towers somewhere between French chateau and Disney castle.

Meant to provide luxurious accommodations for foreign buyers, the houses are however standing empty in what is anything but a fairytale for their investors.

The ambitious development has been hit by regional turmoil as well as the slump in the Turkish construction industry - a key sector - as the country's economy heads towards what could be a hard landing in an intensifying downturn.

After a long period of solid growth, Turkey's economy contracted 1.1 per cent in the third quarter, and many economists expect it will enter into recession this year.

The country has been hit by high inflation and a currency crisis in August. The lira lost 28 per cent of its value against the dollar in 2018 and markets are still unconvinced by the readiness of the government under President Recep Tayyip Erdogan to tackle underlying economic issues.

The villas close to the town centre of Mudurnu in the Bolu region are intended to resemble European architecture and are part of the Sarot Group's Burj Al Babas project.

But the development of 732 villas and a shopping centre - which began in 2014 - is now in limbo as Sarot Group has sought bankruptcy protection.

It is one of hundreds of Turkish companies that have done so as they seek cover from creditors and to restructure their debts.

Should late investors consider cryptocurrencies?

Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.

They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.

“It has produced eye-watering returns for some, whereas others have lost substantially as this has all depended purely on timing and when the buy-in was. If someone still has about 20 to 25 years until retirement, there isn’t any need to take such risks,” Rupert Connor of Abacus Financial Consultant says.

He adds that if a person is interested in owning a business or growing a property portfolio to increase their retirement income, this can be encouraged provided they keep in mind the overall risk profile of these assets.

UAE currency: the story behind the money in your pockets
Racecard

6.35pm: American Business Council – Maiden (PA) Dh80,000 (Dirt) 1,600m 

7.10pm: British Business Group – Maiden (TB) Dh82,500 (D) 1,200m 

7.45pm: CCI France UAE – Handicap (TB) Dh87,500 (D) 1,400m 

8.20pm: Czech Business Council – Rated Conditions (TB) Dh105,000 (D) 1,400m 

8.55pm: Netherlands Business Council – Rated Conditions (TB) Dh95,000 (D) 1,600m 

9.30pm: Indian Business and Professional Council – Handicap (TB) Dh95,000 (D) 1,200m