Saudi Ministry of Energy: Localization of Products Reached 60%

Riyadh – Localization of products associated with the industry of electricity reached 60 per cent and prices of domestic energy are very close to current global levels, according to an official at the Ministry of Energy, Industry and Mineral Resources in Saudi Arabia.

Deputy Minister of Energy, Industry and Mineral Resources and Chairman of the Board of Directors of Saudi Electricity Company (SEC) Saleh al-Awaji stated the past years witnessed the localization of heavy industries in cooperation with the entities related to the energy sector.

He pointed out that there are factories specialized in assembling gas turbines of capacity exceeding 300 megawatts.

During a press conference on the sidelines of the announcement of the meeting of Saudi Electricity Forum scheduled for October 10 to 12, Awaji confirmed that high-tension sectors will be localized in Saudi Arabia. He added that the process of localizing industries related to electricity will continue until needs of local markets have been met, noting that increasing energy efficiency will be reflected on the prices.

During the Forum, achievements of Custodian of the Two Holy Mosques program which was launched a year ago, will be presented, stated Awaji. He said that the Forum will see a number of investment opportunities related to renewable energy and the settlement of services.

The Deputy said that renewable energy is a primary and important source for electricity and will help enhance electric energy. 

“Reconstructing sector of electricity is developing properly, and within a year, the general features of the structure of it will be completed,” Awaji said.

He pointed that some developments came up which required a revision of the structure with an inclination towards privatization of the electricity sector.

The Deputy explained that the forum will discuss challenges facing the sector and propose the appropriate solutions within the framework of Vision 2030. It will also review incentives and appropriate legislation aiming to introduce additional revenues to the national economy.

Awaji stressed that the ministry is concerned with encouraging and enhancing the localization of the electrical industries supporting these sectors, especially with industries related to the equipment, materials, electrical spare parts used in generating, transmitting, and distributing electric power. 

The forum and its associated Exhibition provide great opportunities for the local and international companies to directly market their innovative technologies and expertise to decision-makers, participants, and visitors. Also, they present a good chance to conduct meetings with companies, businessmen, and officials during the event.

International and local specialists will attend and give speeches in this Forum which represents an opportunity for senior officials, experts and investors to exchange experiences and enrich knowledge in the field of electricity, in addition to identifying investment opportunities in the Saudi market within the framework of Kingdom of Saudi Arabia’s Vision 2030.

Saudi Electricity Secures $1.75bn Loan

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London- Minutes after signing the greatest joint international funding agreement in the history of Saudi Electricity Company (SEC), Ziyad Mohammed Al-Shiha, president and chief executive officer of SEC, described the deal as an international expression of trust in the company’s performance and the kingdom’s economy in general.

Saudi Arabia’s national electricity company on Wednesday announced it had secured USD1.75 billion (SAR6.56 billion) in international loans to finance future plans. The banks that took part in the funding are: HSBC, Standard Chartered, NATIXIS, Citibank, First Abu Dhabi Bank, the Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Banking Corporation and Mizuho Bank.

In statements to Asharq Al-Awsat, Shiha said that SEC earning of such a huge loan in a record period of time – less than two months – is an international voting in favor of the company’s achievements, the kingdom’s economy, Saudi Vision 2030 and the National Transformation Program 2020.

He added that the loan aims at funding the basic programs and that “we invest every year between 30 to 40 billion riyals within capital expenses to fulfill the kingdom’s demand. This loan will help us fund expenses related to electricity generating, transporting and distributing.”

Commenting on dividing SEC into four firms, Shiha pointed that the plan is being studied by competent governmental authorities.

SEC is considered the biggest electric service facility in the MENA and the one of the greatest services’ facilities in the world – it also has a large assets base that reached 441.2 billion riyals (usd117.6 billion) at the end of June.

Saudi Arabia Pushes for Wind Energy Project

Saudi

Riyadh- Advancing renewable energy in the desert nation, Saudi Arabia announced on Sunday moving forward with the first of a kind wind energy project.

The move comes to embolden the private sector’s contribution to the vital domain of green energy.

Energy and industry ministry offices released a statement on receiving bids for the “Dumat al-Jandal” energy project in Al-Jawf province, expected to let out an average of 400 megawatts (MW) of electricity produced by wind turbines.

Requests to qualify for the 400 MW wind project in the north of the kingdom will close on Aug. 10, and proposals will be received from Aug. 29. Bidding closes in January next year, the ministry’s Renewable Energy Project Development Office (REPDO) said.

Saudi Arabia plans to develop 30 solar and wind projects over the next 10 years as part of a $50 billion program to boost power generation and cut its oil consumption. The country will produce 10 percent of its power from renewable energy by 2023, Energy Minister Khalid Al-Falih said in April.

“As we enter the second half of 2017, we remain committed to ensuring our ambitious program remains on-track to deliver the value and opportunities targeted,” Al-Falih said in the statement.

The government has announced plans to offer tenders for renewable energy projects to generate 700 megawatts this year. The country sought bids in April for a 300-megawatt solar project and aims to announce a winner in November, the ministry said.

Winning bidders will build, own and operate the power plants in partnership with the government; the Dumat al-Jandal project will be backed by a 20-year power purchase agreement and Sakaka, by a 25-year agreement.

Developing renewable energy is key to displace high-value oil it would rather export. It will also help the kingdom boost local manufacturing and create jobs.

Saudi Arabia aims to generate 9.5 gigawatts (GW) of electricity from renewable energy annually by 2023 involving 60 projects. The renewables initiative involves investment estimated between $30 billion and $50 billion. Shehri said he expects solar projects to be dominant in the near future.

The ministry has said the first round will be to generate 700 MW of renewable energy followed by 1.02 GW in the second round which will be split into 620 MW solar and 400 MW wind whose bidding could happen between the fourth quarter of this year and first quarter of 2018.

The 620 MW Shehri said will not be one site. It could be broken down into 2-3 projects.

Egypt: Major Increase in Electricity Prices

Cairo- Egypt announced a major increase (18-42 percent) in electricity prices on Thursday as authorities continue to implement an IMF-backed economic reform package.

Electricity Minister Mohamed Shaker announced the increase during a news conference, noting the decision will become applicable on the first of July.

He added that electricity subsidies were supposed to be phased out entirely by the end of the 2018-19 fiscal year, but considering the special situation related to the large increase in the exchange rate, the subsidies will be phased out more gradually by the end of 2021-22.

Shaker stated that Egypt spent EGP64 billion ($3.6 billion) on electricity subsidies during the 2016-17 fiscal year, more than twice the EGP30 billion initially expected in the budget. The price hikes will cut subsidy spending to EGP52.7 billion in the current fiscal year and then to EGP43.4 billion in the 2018-19 fiscal year.

Under the revised payment structure, Egyptians who consume below 50 kilowatts of electricity will see prices rise to EGP0.13 per kilowatt, prices for the second-highest usage tier of 50 to 100 kilowatts will go up to EGP0.22 per kilowatt, Shaker said.

Since November, Egyptian authorities have floated the country’s currency, resulting in a surge of the dollar value with one dollar worth EGP8.8 in November now worth more than EGP18.

This step led to an unprecedented inflation in Egypt, exceeding 25 percent by the end of 2016 and continued to rise until it reached a record level in April (33 percent).

In order to protect the poor and low income workers, the Egyptian Ministry of Finance announced recently an increase in allocations for the social protection program to reach EGP75 billion (around USD4.1 billion).

Aramco, Hyundai, Dussur to Make Engines and Pumps

Dammam- Saudi Aramco, Dussur and Hyundai said they had signed a memorandum of understanding to make engines and pumps in the kingdom.

In a joint statement, the three companies said the MoU stipulates that the mentioned parties cooperate in establishing a joint project to cover fields that include manufacturing engines and pumps.

The manufacturing facility will be located at the King Salman International Complex for Maritime Industries and Services, and is expected to contribute in reinforcing cooperation with other initiatives in Ras Al-Khair.

The joint venture will manufacture 4-stroke engines under HiMSEN brand licensing, serving as a regional production stronghold to support the growing demand for electricity in the MENA region as well as marine applications.

The three parties are targeting lower production costs by making use of machine-finished steel and iron components for engines and pumps from the casting and forging facility joint venture in Ras Al-Khair, and fixed and variable cost synergies related to the integration of two- and four-stroke engines in one shop, competitive advantaged related to the transportation of such engines from other international sources, increasing demand of 4 stroke engines either as complementary or backup power generation systems to support the growing demand for renewable power generation and remotely located new power plants, and the secured demand for engines and pumps in marine applications coming from the joint venture, in addition to a number of other internal advantages related to the contribution of each partner to the deal.

This project is expected to create over 650 jobs, in addition to other job opportunities in fields of engines and maritime exporting.

The companies hope to start operations at the new facility by the end of 2019. They will participate in preparing required studies to reach a final decision on investment in this project.

Aoun: Elections will be Held on Time

Lebanon

Beirut– Lebanese President Michel Aoun said that the new electoral law “might not fulfill all our ambitions, but represents a major breakthrough in the political path and a shift to the [proportional] system after 91 years of majoritarian systems.”

Aoun also stressed that the parliamentary elections would be held on time.

For his part, Prime Minister Saad al-Hariri said that the Lebanese have, for the first time, produced an electoral law that was “made in Lebanon”, stressing that the current law was the fruit of a “deep Lebanese political dialogue.

The statements of Aoun and Hariri came during a Cabinet session held on Wednesday at the Baabda Palace.

A meeting between the president and the premier preceded the session. The two officials tackled latest developments in the country and the region.

In a statement, Information Minister Melhem Riachi quoted Aoun as saying that the elections would be held on time. He also called for an awareness campaign to explain the new law for the public.

On a different note, the Lebanese president underlined the need to implement the electricity plan in the nearest time possible.
Hariri, for his part, called for a positive approach to the electricity issue.

Hariri: Economy, Electricity Are Government’s Priorities

Lebanese Prime Minister Saad al-Hariri meets with a delegation from Lebanese businessmen

Beirut – Lebanese Prime Minister Saad al-Hariri said that after the completion of drafting a new electoral law, the government’s priorities would focus on the economic situation and the reform of the electricity sector.

He noted in this regard that the privatization of some sectors was the only solution to provide citizens with better services.

Before heading to Saudi Arabia to perform the Umrah, the Lebanese prime minister welcomed on Wednesday a delegation of the Lebanese Businessmen Associations, headed by Fouad Zmokhol.

In remarks during the meeting, he said that the government was seeking to bolster the contribution of the private sector to the country’s economy, by encouraging private initiatives.

Hariri also stressed the need to reform the electricity sector, which is currently afflicting the state with heavy losses. He noted in this regard that the government would launch projects to renovate power plants and build the proper infrastructure for water, roads, and communications.

Asked about the Gulf crisis with Qatar, the Lebanese premier said: “Lebanon should not interfere in the emerging dispute between GCC states and Egypt on one side and Qatar on the other side.”

“Lebanon adheres to positive neutrality towards all Arab states,” he added.

He also underlined the importance to establish excellent relations with the different Arab countries.

On a different note, Hariri stressed the need to complete the work on drafting a new electoral law and move forward towards resolving pressing economic issues.

Tunisia to Invest $160 Million in Renewable Energies

Tunisia- The Tunisian Department of Energy issued this month a tender for projects that aim at providing 210 MW of renewable energy with a cost of TND400 million (USD160 million).

Minister of Energy, Mines and Renewable Energies Héla Cheikhrouhou said during an international conference on renewable energy in Tunisia that projects with a capacity of 1 MW, projects with a capacity of 30 MW and micro-projects that don’t exceed 5MW of wind energy are subject to authorizations and not conditions to grant more chances to the Tunisian promoters.

The minister said that the Tunisian Electricity and Gas Company (STEG) will buy 60 MW of solar-powered electricity from major projects, 10 MW and micro-projects, as well as projects with a capacity of 70 MW of the wind-energy projects.

“The production cost must be reasonable so that STEG customers can benefit from them,” Cheikhrouhou said.

Decades after the government had laid hands on this strategic sector, the Tunisian parliament approved in 2015 a law to generate electricity from renewable energy by the private sector.

Tunisia imports fossil energy to cover 99 percent of its energy needs. The share of renewable energies has not exceeded the 1 percent in providing energy. Up to 97 percent of electricity is generated by natural gas while the remaining – estimated as 3 percent – its major source is renewable energy.

Azraq Refugee Camp Now Runs on Solar Energy

Azraq, Jordan- The United Nations High Commissioner for Refugees (UNHCR) inaugurated a solar power plant at the Azraq camp hosting Syrian refugees in Jordan.

The plant, which was funded by the “Brighter Lives for Refugees” campaign organized by the IKEA Foundation, will provide partial supply of electricity to the camp’s residents who were deprived from power for three years. The plant will also contribute to accomplishing the Jordanian national energy strategy for a green economy by 2020.

The project will provide two-megawatt solar photovoltaic power to some 20,000 Syrian refugees who live in around 5,000 shelters in the camp. Each family will be able to light its home, refrigerate its food, and charge its phones, which is very important for refugees to keep in touch with their relatives abroad.

Refugees had complained about their isolation in camps lacking electricity, which became challenging for the camp’s caretakers, especially on security issues. Therefore, the UNHCR decided in 2015 to build a solar power plant, which was supposed to start operating in the same year. However, it was delayed to 2017.

The camp hosts over 20,000 refugees, 54 percent of whom are younger than 18. The camp extends over 14 square kilometers and comprises 8,029 caravans, a hospital with 130 beds, two schools enlisting 5,000 students, along with playgrounds for children, a library, and centers to treat refugees suffering from social and psychological abuse.

There around 1.39 million Syrian refugees in Jordan; 635,000 are registered in the UNHCR, and 130,000 live in six camps in the country, with the biggest among being Azraq and Zaatari camps.

Lebanese Forces, FPM Standoff over Electricity Plan

electricity

Beirut – The ministers of the Lebanese Forces (LF) announced on Tuesday that they will take the necessary measures at cabinet in order to put affairs related to the electricity file “back on track in order to preserve public funds and ensure the rise of the state of law.”

The declaration pits the ministers against those of their ally the Free Patriotic Movement (FPM) over Energy Minister Cesar Abi Khalil’s electricity plan.

The LF ministers said that the differences between the two parties over the plan will not harm relations because the end goal is ensuring the success of the government.

During a press conference on Tuesday, the LF ministers presented their reservations on the bidding process in the electricity file, which they said was contrary to a government decision and violated legal norms.

The LF officials at the press conference were Health Minister Ghassan Hasbani, State Minister for Planning Michel Pharaon, Information Minister Melhem Riachi and Social Affairs Minister Pierre Abou Assi.

Speaking on behalf of the ministers, Hasbani said: “During discussions on the state budget, it was evident that the electricity sector was costing the state losses that have accumulated over the years.”

These losses have exceeded 20 billion dollars and are now a large part of the public debt, he explained, saying that there has not been a “solution in sight” to this issue.

“We have repeatedly demanded that a permanent solution to this crisis be reached by cabinet in order to reduce the budget deficit and provide electricity to the citizens at the lowest possible cost,” he added.

“The electricity minister presented a plan to tackle this crisis on the short and long terms. It was submitted during the first cabinet session that was held after the conclusion of budget discussions. The government took a clear decision, which called for tasking the minister with taking the necessary measures and procuring tenders and gradually presenting them before cabinet according to the rules and procedures,” he continued.

This was however followed by a procurement process that violated the cabinet decision.

He explained that no contract conditions were presented before cabinet, but the Energy Ministry adopted amended ones that were approved by a past government.

“This led to a deal that had several legal and procedural flaws,” he said.

Hasbani added that the bidding process did not abide by legal norms, whether in the management of the tenders or in respecting the general accountability law or the Electricite du Liban company.

He revealed that in his capacity of deputy prime minister, he had twice contacted the cabinet to rectify this situation, but his demands were ignored.

“We were therefore forced to take this stand before the public in order to declare our commitment to the need to respect cabinet decisions and to return to them during each step of the implementation of the electricity plan, specifically in regards to the current conditions contract,” he stressed.

He also demanded the expansion of the conditions contracts in order to find better solutions related to costs, transparency and speed of execution.

FPM Secretary Ibrahim Kanann responded to the LF by asking: “What is the purpose of all this uproar over the electricity?”

He said that the LF ministers should present their case before cabinet, which is set to convene on Wednesday, “but it is unacceptable for them to question our reputation.”

“The upcoming days will reveal that we are keen on reform,” he stressed.