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RIYADH: Saudi Arabia’s ACWA Power has closed a $123 million financing package with a group of international banks to develop the 200 megawatt Kom Ombo project, a utility-scale solar power plant in Egypt, the firm said in a statement.
The Kom Ombo project will be located about 20 km away from Africa’s biggest solar park, the 1,465 MW Benban complex — another ACWA Power development — the company said, adding that the new utility-scale plant will serve 130,000 households once it is commercially operational in January 2024.
The loan was obtained from several regional and international financial institutions, including $36 million from the European Bank for Reconstruction and Development, $14.6 million from the Organization of the Petroleum Exporting Countries’ Fund for International Development, and $14.4 million from the African Development Bank.
The EBRD had earlier provided $14 million in equity bridge loans to the project, with another $45 million coming from the Arab Petroleum Investments Corp., the firm said.
The package also includes $34.5 million from the Green Climate Fund, $4.8 million from the Arab Bank, and $10 million from the Sustainable Energy Fund for Africa as part of the COVID-19 innovation public procurement aid program.
“The Kom Ombo solar project further demonstrates the private sector’s active involvement in Egypt’s energy transition. This accomplishment highlights the shared vision and purpose of various global financing institutions in achieving the Republic’s targets, which would not be possible without the trust and support of the government, the Egyptian people, and communities,” Marco Arcelli, CEO of ACWA Power, said.
He noted that the financing documentation was initially signed in April 2021 with EBRD, the OPEC Fund, GCF, ADB, and Arab Bank.
However, the changes in global supply chains caused by COVID-19 resulted in Kom Ombo’s timescale being extended.
The Kom Ombo facility will support Egypt in reaching its goal of producing 42 percent of its electricity from renewable sources by 2035, while also offering one of the lowest generating tariffs in Africa.
RIYADH: Oil prices rose slightly on Thursday, finding some support after heavy losses in the previous two sessions driven by fears of a US recession and an increase in Russian oil exports.
Brent crude was trading at $77.93 a barrel, up 24 cents, or 0.31 percent at 10:30 a.m. Saudi time, while US West Texas Intermediate crude added 13 cents or 0.17 percent to trade at $74.43.
Oil prices dropped almost 4 percent on Wednesday, extending sharp losses from the previous session with recession fears overshadowing a bigger-than-expected fall in US crude inventories.
As of Wednesday’s close, Brent is down 4.9 percent for the week while WTI has lost 4.6 percent.
Russia says OPEC+ sees no need for further oil output cuts
Russian Deputy Prime Alexander Novak said on Thursday that the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, saw no need for further oil output cuts despite lower-than-expected Chinese demand, but that the organization can always adjust policy if necessary.
He said Russia reached its targeted output this month after announcing cuts of 500,000 barrels per day, or 5 percent of its oil production, until the year-end.
Russia is part of the OPEC+ group of oil-producing countries that announced a combined reduction of around 1.16 million bpd earlier this month, a surprise decision the US described as unwise.
Novak said Russian oil and gas condensate production is expected to decline to around 515 million tons this year from 535 million tons in 2022.
Novak said OPEC+ did not expect oil shortages in the global oil market after the production cuts, even though the International Energy Agency said they risked exacerbating a supply deficit expected in the second half of the year.
“My opinion is that now the market is balanced, taking into account the decisions made earlier, taking into account our reduction, the reductions that we saw in other countries,” Novak said.
Following severe Western sanctions against Moscow over Ukraine, Russia has maintained its oil production and exports by increasing sales of its energy products outside Europe, its traditional supply market for oil and gas.
Novak said that Russia will this year divert to Asia 140 million tons of oil and oil products that previously would have headed to Europe. He also said Russia will supply between 80 million tons and 90 million tons of oil and oil products to the West in 2023.
Repsol’s Q1 net profit shrinks on lower oil, gas prices
Spanish oil company Repsol said on Thursday that its first-quarter net profit fell 20 percent from the same period a year ago as oil and gas prices shrunk from the first three months of 2022.
The company said its net profit was €1.11 billion ($1.23 billion).
On an adjusted base, Repsol booked a quarterly profit of €1.89 billion, which compares with €1.06 billion a year earlier and expectations of €1.51 billion, according to an average forecast provided by the company.
The uncertain economic outlook weighed on oil and gas prices, with crude oil prices down by an average of 20 percent compared with the first quarter of last year, when the war in Ukraine sparked a sharp increase in oil prices.
The sale of a 25 percent stake in its oil and gas exploration division helped the company cut its net debt to €880 million at the end of March. It was €2.26 billion at the end of last year
(With inputs from Reuters)
RIYADH: Silicon Valley Bank’s former owner may need to take out a bankruptcy loan amid uncertainty about the US Federal Deposit Insurance Company’s seizure of $2 billion in cash from the company, its attorney said Wednesday.
SVB Financial has about $180 million on hand and is not in “imminent danger” of running out of cash attorney James Bromley said at a court hearing before US Bankruptcy Judge Martin Glenn in Manhattan, who is overseeing the company’s Chapter 11 proceedings.
SVB Financial filed for Chapter 11 bankruptcy on March 17 after California regulators shuttered Silicon Valley Bank in early March and appointed the FDIC as a receiver, making it the largest collapse since Washington Mutual went bust during the financial crisis of 2008. The company replaced its CEO and chief financial officer with turnaround specialists last week.
The company has been forced to consider taking out a bankruptcy loan because the FDIC has not yet said whether it will return any of the $2 billion seized at the time of the bank failure, Bromley said. The FDIC has also not fully explained why the cash was seized, Bromley said.
“There is something fundamentally wrong with taking the money and not saying why,” Bromley said.
FDIC’s attorney, Derek Baker, told Glenn that SVB Financial’s bank accounts were properly seized as part of FDIC’s takeover of the failed bank.
The cash is being held as a set-off against the regulator’s costs in stepping in to protect SVB customer deposits, and FDIC is working to provide more detail about its claims against SVB Financial, Baker said.
Glenn said he needed more information about the FDIC’s authority to seize cash and how disputes related to the seizure should be resolved. He directed Baker to report to the court on those topics within a week.
SVB Financial is also still waiting for the full return of financial records that were seized as part of the bank takeover.
First Citizens BancShares, which bought the failed bank, said that it has hired a specialized financial adviser to speed up the transfer of information necessary to SVB Financial’s bankruptcy case.
RIYADH: Saudi firms are increasingly playing an important role in driving the economy, with the share of local content continuing to rise in various sectors as the Kingdom’s diversification efforts gain momentum, revealed an annual report tracking the Vision 2030 blueprint.
This comes as Saudi Arabia has achieved 59.5 percent of local content in the oil and gas sector as opposed to the targeted baseline of 37 percent in 2022.
Local content refers to the percentage of goods, services, and skills sourced from local suppliers and workforce within the Kingdom.
The aim of promoting local content is to increase the participation of local businesses and citizens in the industry’s supply chain, which can lead to economic growth, job creation and technology transfer.
According to the report, the Kingdom also surpassed its targets for the share of non-oil exports for non-oil gross domestic product by 6.3 percentage points.
While the target set for the share of non-oil exports in the non-oil GDP was 18.7 percent, the Kingdom achieved 25 percent in 2022.
Small and medium enterprises loans as a percentage of bank loans also outscored the baseline target of 2 percent last year by attaining 8 percent.
This helped the Kingdom reduce its unemployment rate to 8 percent among locals against the intended target of 12.3 percent.
Women’s participation was also brought to fruition, with their percentage reaching 34.5 percent compared to the planned 22.8 percent in 2022.
The report further revealed that the percentage of university graduates joining the labor market within six months of graduation touched 32 percent against the targeted 13.3 percent.
The Kingdom also excelled on the UN E-Government Development Index, securing 31st rank last year. Its target for 2022 was 44.
“The future of the Kingdom is blessed and promising. Our country deserves more than what has been achieved. We have capabilities; we will double their role and increase their contribution in making this future,” Crown Prince Mohammed bin Salman is quoted as saying in the report.
“Our history records the greatest and most successful collection of directed purposes to building a modern state whose foundation is the citizen, its pillar is development and its goal is prosperity,” King Salman added in the report.
RIYADH: Saudi families have received more support to own their homes after SR933 million ($248 million) was deposited into their Sakani accounts in April.
The amount — paid out by Saudi Arabia’s Real Estate Development Fund in conjunction with the Ministry of Municipal and Rural Affairs and Housing — is in line with the Kingdom’s Vision 2030 goals which aim to provide adequate housing opportunities for Saudi families.
The amount was allocated to support various housing support contracts, according to the REDF CEO Mansour bin Madi.
Sakani is a real estate initiative to support and enable Saudi citizens to own their first home.
In January, the fund deposited SR912 million in the accounts of Sakani beneficiaries.
The CEO further indicated that the total amount deposited in the accounts of Sakani beneficiaries since the program’s announcement from June 2017 until April 2023 exceeded SR47.1 billion.
Over half of the total beneficiaries who completed an initial period of up to three years after signing their financing contracts were able to update the construction stages through the fund’s website, Madi disclosed.
Madi also stressed the importance of updating stages of self-construction to ensure that the fund supports the beneficiaries of the product as well as the continuity of housing support for them.
The Sakani program seeks to raise the proportion of housing ownership for Saudi families to 70 percent by 2030.
Ongoing initiatives implemented by the government, including access to finance and regulations standardizations, are reforming the housing market and improving access for Saudi families, according to a report from PwC Middle East.
Saudi Arabia’s housing demand stood at 99,600 houses in 2021 and is expected to increase by more than 50 percent to reach 153,000 by 2030.
RIYADH: Danish shipping giant Maersk has stopped taking new bookings of goods and cargo for Sudan in light of the ongoing conflicts in the country, according to a company statement.
The firm will monitor the situation and search for solutions to stabilize its supply chain services in the country, it added.
Due to the escalating violence and political unrest in Sudan, global supply chains strained by the Russia-Ukraine crisis are now experiencing additional disruptions, reported specialist news agency The Loadstar.
It added that other significant container carriers, including German shipping company Hapag-Lloyd, have halted cargo bookings for the African country until further notice out of concern for operational risks.
Hapag-Lloyd stated: “Any bookings placed up to this date will be honored and shipped to Jeddah, Saudi Arabia.”
French container transportation company CMA CGM announced this morning that it would add a $500 “extra risk coverage surcharge” for dry and reefer shipments from Europe, the Middle East, and India starting May 1.
Currently, all roads and bridges of Port Sudan are open for the transportation of goods, and load and discharge operations are proceeding normally inside the port, reported leading maritime insurer West of England P&I Club on Tuesday.
Port Sudan is crucial for oil exports from the landlocked neighboring country of South Sudan.
“Furthermore, the oil terminal at Bashayer, an essential facility that handles Sudan’s oil exports located near Port Sudan, is operating normally,” added West of England P&I Club.
In December, a consortium led by AD Ports Group and Invictus Investment signed a preliminary agreement with Sudan to build and operate the Abu Amama port and economic zone on the Red Sea with a $6 billion investment.
As the Sudanese conflict unravels, it is unclear how the deal will develop further.
Moreover, most Gulf airlines stopped operating in Sudan following a recent incident involving a Saudia passenger flight being shot at earlier this month.
According to an industry advisory, Emirates has announced a prolonged suspension of flight connections to Khartoum, the busiest airport in Sudan, through to May 31.
“The air space has been closed, disrupting air cargo shipments to Khartoum. Supply chain managers are dealing with difficult times to fulfill their customers’ requirements.” Joy John, director of sea and air freight at Mumbai-based Jet Freight Logistics, told The Loadstar.