Egypt Inaugurates Mediterranean Union Investment Forum of Renewable Energy

Egypt

Cairo – Mediterranean union investment forum of renewable energy began in Egypt on Wednesday aiming to launch several opportunities in the field of renewable energy in the Euro-Mediterranean region, enhance cooperation on energy and climate actions, and create a more active involvement of the private sector in the regional-European-Mediterranean collaboration.

Egyptian Minister of Electricity and Renewable Energy Mohamed Shaker el-Markabi, Egyptian Minister of Investment and International Cooperation Sahar Nasr inaugurated on Wednesday the forum at the presence of Portuguese Secretary of State for Energy Jorge Seguro Sanches, Secretary General of the Union for Mediterranean (UfM) Fathallah Sijilmassi, official representatives, international financial institutions and private sector investors.

Minister Nasr said that the Electricity Ministry reforms in the energy field, including feed-in tariffs, contribute in attracting the investors to invest in the renewable energy, as well as in attracting a number of development partners such as the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

She added that a renewable energy strategy has been followed through diversifying energy sources and allocating subsidies for the field.

“Renewable energy projects include providing job opportunities and contributing to achieving the sustainable development goals,” according to Nasr.

Nasr stressed that there are huge regional cooperation opportunities, human and natural resources and huge markets that qualify the region to integrate more with the European partner.

On the other hand, the Minister of Electricity said that the energy strategy will link between Egypt, Asia, Africa, and Europe.

Minister Markabi highlighted the importance of the role played by the private sector and the Euro-Mediterranean cooperation in the fields of renewable energy and energy efficiency.

PIF Establishes New Energy Service Company ‘Super Esco’

Saudi Arabia’s Public Investment Fund (PIF) has announced the establishment of a new energy service company, Super Esco, designed to increase energy efficiency across government and public buildings and stimulate the growth of the Kingdom’s energy efficiency industry in line with the objectives of Vision 2030 to diversify the economy and drive environmental sustainability.

In partnership with the Ministry of Energy, Industry and Mineral Resources, the Ministry of Finance, and the Saudi Energy Efficiency Center, Super Esco will provide new investment opportunities by creating partnerships with the private sector to deliver projects.

Projects in the Kingdom of Saudi Arabia’s energy efficiency sector have an estimated value of SAR 42 billion, or around SAR 3 billion annually. Internationally, the sector is valued at SAR 130 billion, with projects in the US, Europe, and China accounting for 90 percent of the global market share.

Super Esco has been established with a capitalization of SAR 1.9 billion. The company will fund and manage the retrofit of government and public buildings, which represent over 70 percent of overall projects in the sector.

These projects will help reduce government spending on the electricity sector, which will in turn reduce natural resource consumption while rationalizing capital investments in expansion projects for the production, generation, transmission, and distribution of electricity.

CESI: Saudi Arabia has Potential to Lead Regional Energy Production

Riyadh — Italian Chief Executive Officer of CESI Matteo Codazzi said that Saudi Arabia enjoys all the conditions needed to become a leading energy production giant—especially in light of its ambitious programs on technology and localization of the renewable energy industry on an international scale.

Codazzi said in an interview with Asharq Al-Awsat that Saudi Arabia is taking serious and driven steps based on Kingdom Vision 2030 concerning the transport and development of experiences in renewable and solar energy.

CESI, a global technical consulting and engineering company which started its operations in the Middle East in 2012 and is among the few notified bodies in the industry involved in regulatory framework development, envisions to ‘shape a better energy future.’

Codazzi added that CESI’s presence in Saudi Arabia is a key building block in the energy industry and will become one of the most important contributors to Vision 2030’s vision for localization of the electrical, renewable and solar industries in terms of international standards.

“We are committed to facilitating the region’s ambition of ecological footprint reduction,” said Matteo Codazzi, Chief Executive Officer of CESI. “We address the region’s critical sustainability issues and work towards achieving green goals including that Vision 2030 Kingdom of Saudi Arabia.”

He pointed out that Saudi Arabia is moving forward in the development of its industrial capabilities to become a more sustainable country, taking into consideration the security and safety measures, and applying them, providing testing services related to the electromechanical industry, as well as consulting and engineering services related to the energy sector.

He said that the agreement signed by the company with the Gulf Laboratory for testing electrical equipment recently in Riyadh, including the establishment and development of the first laboratory equipped with the latest technical and electromechanical specifications for the conduct of electrical tests for high and low voltage.

Global technical consulting and engineering company Cesi and GCC Electrical Testing Laboratory (GCC Lab) have signed a term sheet for the development and operation of a state-of-the-art electrical testing facility in Saudi Arabia.

The testing platform will perform a wide range of electromechanical testing activities and provide technical services. The lab will be a key asset to support the policies promoted by Saudi Arabia in order to sustain the electrical industry in the GCC region.

The agreement will also cover the needs and objectives of the local market to form the basis for advanced capabilities of the electrical testing market in the region and increase the quality of manufacturing to bring this industry and sector to the highest level.

Official Says Saudi Arabia to Offer Nuclear Reactor Construction Project in 2018

Saudi Arabia plans to award a construction contract for its first nuclear reactors by the end
of 2018, a senior government official said on Tuesday.

“With sponsorship from the highest levels in the state, the contract will be signed by the end of 2018,” Maher al Odan, the chief atomic energy officer of King Abdullah City for Atomic and
Renewable Energy, told a news conference in the capital Riyadh.

On that note, TASS reported last week that Russian state nuclear corporation Rosatom has sent its proposals to the Saudi party for the construction of a nuclear power plant in Saudi Arabia, head of Rosatom Alexei Likhachev.

“Of course, we have sent it,” he said, when answering the relevant question.

“I hope that we will reach an agreement on cooperation in peaceful atom and other areas, such as mobile sources of nuclear energy, small and medium-sized power sources, scientific research,” he noted.

“Saudi Arabia has got down to creating its own nuclear power industry. The first step has been taken – a request was sent for a parade of vendors prepared to build a major nuclear power plant,” he said.

Likhachyov said Rosatom hoped for cooperation with Saudi Arabia in building nuclear power plants and in creating mobile power sources.

Saudi Arabia’s population has grown from 4 million in 1960 to almost 30 million in 2014. It is is the main electricity producer and consumer in the Gulf States, with 312 TWh gross production in 2014, 152 TWh from oil and 160 TWh from gas – a 32% increase over the previous two years.

Algeria: Exceptional Measures to Cover Budget Deficit

Tunisia

London- Algeria’s government has approved draft amendments to a law aimed at securing new funding sources to cover budget deficits as it struggles to cope with a sharp fall in energy earnings.

Amendments to the Money and Credit Law were endorsed at a cabinet meeting on Wednesday, chaired by President Abdelaziz Bouteflika, and plans for the newly appointed government of Prime Minister Ahmed Ouyahia were discussed.

The OPEC member country has been facing financial pressure since crude oil prices started falling in mid-2014, halving its oil and gas revenue, which accounts for 60 percent of state budget.

The amendment will “authorize the central bank to lend directly to the public treasury so as to finance budget deficits and internal public debt and provide resources to the National Investment Fund,” the presidency said in a statement late on Wednesday.

This type of “exceptional funding” will be implemented for five years and “accompanied with financial and economic structural reforms,” it said, without elaborating.

“Algeria will temporarily turn to this funding after resisting for three years the effects of a severe financial crisis caused by a serious collapse in hydrocarbons prices,” the statement added.

Bouteflika in June called for “internal unconventional funding” to avoid turning to foreign debt, estimated now at less than $4 billion. Algeria expects its budget deficit at 8 percent for 2017 down from 15 percent in 2016.

The cabinet meeting also approved government action plan, which aimed at “improving business environment and boosting investment in all sectors”. The amendments and government plans will still need final approval by parliament, where Bouteflika’s backers have an overwhelming majority.

Algeria has cut public spending by 14 percent for this year after a 9 percent reduction in 2016, and is struggling to reduce its imports bill despite increasing restrictions since early 2016.

That coincides with failures to implement reforms and diversify the economy away from oil and gas, which account for 94 percent of export revenue.

Energy, Real Estate Lead Sectors Luring Foreign Flows into Egypt

Egypt

Cairo – International investment institutions expected Egypt to witness a significant economic improvement starting next year in terms of foreign investment inflows, especially in the oil and gas, real estate and consumer product sectors. They also forecast inflation rates to fall sharply in the Egyptian markets followed by a sharp cut of interest rates by the Central Bank of Egypt, from nearly 20 percent now to around 10 percent by the end of 2019.

In a report on the Egyptian economy, Renaissance Capital, an investment firm specialized in emerging markets, predicted that in the coming period Egypt would witness an increase in inflows driven by the new discoveries of oil and gas fields, especially after the Egyptian government solved the debts crisis with the international oil companies and paid the largest share of dues. The real estate, retail and consumer product sectors come next on the list of foreign investors’ interests.

Renaissance Capital said more than 50 percent of foreign direct investment that flowed into Egypt in the fourth quarter of 2016 ($ 4.1 billion) went to the oil and gas sector. The firm pointed out that Britain, the United States and Belgium are among the biggest contributors to foreign direct investment in Egypt, while the UAE is the largest contributor among the Gulf Cooperation Council countries. It also noted that Britain has always been the largest contributor to foreign direct investment in Egypt, as its investments during the first quarter of 2017, acquired 55 percent of the total foreign direct investment of $1.8 billion, followed by the United States by 14 percent and $482 million.

The report showed that with many multi-national companies operating in the Egyptian market in the food sector, the retail sector may see significant investments in the coming years, as Egypt is still in the early stages of growth in the modern retail sector. The banking sector is also witnessing great opportunities due to the operations of mergers and acquisitions taking place in the country.

London-based Capital Economics, expected the Egyptian central bank’s monetary policy committee to smoothen the monetary policy by the end of the year by cutting interest rates more than expected.

In a report issued on Sunday, it said the decision of the policy committee at its meeting last Thursday not to change the lending and deposit rates (18.75 percent for deposits and 19.75 percent for overnight lending) came with the possibility of a sharp drop in inflation over a period of six to nine months. It also expected interest rates to fall to 12.75 percent by the end of 2018 and 10.20 percent by the end of 2019.

Capital Economics said that the Central Bank’s decision to fix the interest rate came despite the significant increase in inflation in the past month on an annual basis, since the Policy Committee had not found any need for more policy restrictions. The last raise in interest rate was 200 basis points last month, which came in anticipation of the recent increase in inflation.

Capital Economics predicted that inflation in Egypt would begin to fall more quickly than expected, pointing out that inflation in Egypt had peaked, and that its decline promises a large financial recovery that would help the Egyptian economy.

We Must Prepare for an Upcoming Non-Oil Era

An oil pump jack pumps oil in a field near Calgary, Alberta.

Bahrain was once a rich market for pearl trade. One morning, things changed as the Japanese discovered cheaper and more productive industrial alternatives. The Bahraini main trade collapsed, the fishing boats stopped, and the Gulf region lost one of its most important financial resources.

This same story can happen again with oil, especially that alternatives have been developing and governments in a number of countries have been encouraged to support electric cars and plan to end the era of gasoline and diesel cars.

Britain, France, Germany, the Netherlands as well as India and China have announced their intention to get rid of petroleum fuels for cars. We have already witnessed how cars have replaced older means of transportation like horses and donkeys. Today, history is repeating itself.

This is what makes ideas and projects such as Vision 2030 of Saudi Arabia an existential matter because it is based on finding an alternative income for oil; otherwise, we would be in real danger.

The new area will require rationalizing a huge portion of government spending, educating people on how to manage their savings, reforming education and employment, and empowering women; or else the task will be a lot harder later on.

Although gasoline and diesel cars still have two decades in their lifespan in a number of major world markets, yet oil revenues are suffering today as prices continue to fluctuate and the alternative oil market such as crude oil expands.

This adds pressure on planners to accelerate the search for faster solutions. The economy cannot survive with these very high rates of foreign employment and local unemployment or with government support for various goods and services. All of which will make the task very difficult for the government and citizens over the next few years.

We will see the end of time for servants and drivers and the difficulty of acquiring a paid or guaranteed government job.

Planners will need to think deeply how any country can distinguish itself by means of industry or service. Does it need to head towards religious tourism or expansion of industrial oil products? Should the focus be on sciences from the early stages of education or rather on specialization and the declaration of the country in an urgent state of transition?

Nobody is aware of what is happening in the world or even doubts the need to move to a new stage relying less on oil. Therefore, announcing the inauguration of Vision 2030 came as a conscious and responsible reading before countries change history in the car industry, which will be a major blow to the oil market.

We will witness a heated race between reducing our reliance on oil resources and reducing dependence on its derivatives of car fuel.

Stopping gasoline and diesel cars does not mean the end of the oil age, but it strikes at the most important products and markets that happen to be the source of our main income.

Despite that, oil will remain a source of life in other areas for a long time. It is fuel for aircraft and ships. It operates electricity generators, runs desalination plants, used in the heating sector, used as asphalt and a key component in many industries from iron to shampoo, toothpaste, and even artificial hearts.

I have heard skeptics say that the 20-year time limit for gasoline and diesel is unrealistic, and oil will continue to be needed, arguing that the proportion of electric cars in Britain is only one per cent today. However, we have seen how the world has changed in short times and embraced modern techniques.

It may be repeated with electric cars, especially that its technology, as well as the electronic car, is moving forward with amazing speed. Hence, we must be optimistic that we are able to challenge and overcome the crisis.

Falih: Saudi Participation in Expo 2017 Reflects Kingdom’s Energy Drive

Astana- Saudi participation in Expo 2017 in Astana reflects the Kingdom’s drive to develop and use sustainable energy in line with Saudi Vision 2030 and the National Transformation Program (NTP) 2020, said Minister of Energy, Industry and Natural Resources Khalid al-Falih.

The Kingdom is participating in the expo in the Kazakh capital with a wing supervised by the King Abdullah City for Atomic and Renewable Energy (KACARE), in cooperation with public and private energy companies.

Falih expressed delight for the participation of 115 countries and 18 global organizations in the three-month event titled “Future Energy”, stressing that the Saudi role aims to exchange expertise and strengthen relations in the energy sector within an international framework.

He also declared that the Saudi participation in the exhibition aims to reveal the ambitious development projects and plans that were launched by the kingdom in the energy field, for the sake of diversifying economic resources and achieving sustainability.

The wing was inaugurated by Falih in the presence of Russian Energy Minister Alexander Novak and others.

The Kingdom is in a quest to diversify energy resources in a manner that bolsters its leading position on the global energy map, based on competitive advantages that will attract more local and global investors.

Saudi Arabia plans to produce 3.5 gigawatts of electricity from renewable energy sources by 2020, reaching 9.5 gigawatts by 2023 in line with Saudi Vision 2030 and the National Transformation Program.

Saudi Arabia Emboldens Renewable Energy Investments, Localization is Condition to Advanced Industries

Solar

Riyadh – Projects aimed at producing a sufficient power supply for local demand and international exports are underway in Saudi Arabia, said Saleh Al-Awaji, the Saudi undersecretary for electricity affairs at the Ministry of Water and Electricity.

The ministry had promised the private sector investment openings in the renewable energy sector.

Speaking to Asharq Al-Awsat, Awaji clarified that the abovementioned efforts are part and parcel of an initiative endorsed by the Custodian of the Two Holy Mosques King Salman bin Abdulaziz for increasing power production reliant on renewable energy sources.

Power output by the renewable energy sector is meant to bridge the gap between oil-dependent energy and the shortage in electricity supplies worldwide. Renewable energy production, when ready, will move to the international and regional markets on exported power supplies.

“Through this initiative, we seek to strengthen the role played by the private sector, its participation in renewable energy projects and the localization of advanced industries,” Awaji said.

The energy official added that “doors are open for the private sector to invest in green energy– the construction of power plants and tapping into renewable sources such as solar energy, wind and waste.

Next to numbered goals, Awaji said that power production will be stepped up by the initiative.

One of the program’s basic terms and conditions is increasing power production, next to localizing the power supply chain.

Awaji stressed the need of entrepreneurs planning to invest in renewable energy is to work on the localization of related advanced industries, and to provide associated expertise.

“We recognize that in the first stages, it is difficult to achieve large percentages of localization, but with incremental progress through time this can be achieved by developers, reaching a 100 percent which is projected by the National Transformation Program, Saudi Vision 2030,” Awaji added.

Expanding energy programs in Saudi Arabia, making it at best inclusive, will not only promote vigorous diversity within the sector, but also help put the oil-rich country’s economic wheel at a refreshing advantage.

Saudi Arabia has announced its national program on the premise of stepping out from oil-dependency by expanding each of its economic private and public sectors.

Many investments and initial public offerings have taken the media by storm since, with the latest being the largest issuance of Islamic sovereign bonds ever noted. The bonds were offered under what is known the Sukuk program.

“The initiative (revitalizing renewable energy) does not only benefit the electricity sector but profits developing small and medium enterprises,” Awaji said.

“Most of the works needed by renewable energy programs are services and products that can be delivered by these companies in cooperation with relevant authorities,” Awaji explained.

Aramco Aims to Increase Energy Refining to 10 Million bpd

Dhahran- Amin Nasser, president and chief executive officer of Saudi Arabian Oil Company (Saudi Aramco), affirmed that the company is committed to crude oil projects and to reinforcing prime businesses in chemicals.

The long-term vision of oil and gas markets is positive, and strategic investments are urgent to fulfill the global future demand on energy, Nasser said at the Columbia University’s Global Energy Summit.

“In the short term, the oil market has a surplus but supplies are falling behind what will be required in coming years,” he added.

Nasser added that encouraging investments is not the responsibility of major oil producers, especially that several long-term projects are still suspended although prices revived recently. He noted that the imminent shortage of supplies will have a tangible effect.

“The future market situation will be increasingly on firmer grounds, though volatility could continue until the rebalancing takes firmer hold and inventory withdrawals assume a more consistent trend,” he said.

He added that the company will continue to encourage investments and reinforce businesses in the oil and gas fields, going in tandem with the company’s long-term vision regarding energy investments and Saudi Vision 2030.

Nasser pointed out that this strategy includes doubling gas production during the coming ten years to reach 23 billion cubic feet per day, in which the kingdom has the highest level of gas usage in utilities sector among the G20s.

“We are working on expanding processes of refining, treating and marketing. We also aim at increasing international capability of Aramco in the refining sector from 8 million bpd to 10 million bpd,” Nasser added.

His speech focused on basic topics and affairs where policies of energy, financial markets, environment and geopolitical considerations intersect.