Latest news with #NationalInfrastructureFund
Argaam
27-06-2025
- Business
- Argaam
Saudi Water Authority to finance SAR 2.4B Jubail, Al Khobar desalination systems
The Saudi Water Authority signed a financing agreement with the Asian Infrastructure Investment Bank (AIIB) and the National Infrastructure Fund (Infra) to support a strategic project aimed at developing the infrastructure of the first phase of the Jubail desalination system and the second phase of the Al Khobar system, at a total value of SAR 2.43 billion. According to SPA, AIIB will provide over SAR 1.6 billion in funding under the agreement, marking one of the largest non-sovereign institutional financing deals supported by the bank to date. This strengthens public-private partnerships in strategic infrastructure projects. Infra will contribute SAR 750 million. The water sector is one of the key focus areas of the fund, aligning with the goals of Saudi Vision 2030. The project aims to convert the Jubail Phase 1 and Al Khobar Phase 2 desalination systems from multi-stage thermal desalination to reverse osmosis (RO) technology. This shift is expected to improve energy efficiency, increase water production capacity, and extend the operational lifespan of both systems by around 20 years, in support of Saudi Arabia's sustainability and climate goals under Vision 2030. The Al Khobar Phase 2 desalination system has achieved a global milestone as the world's largest seawater desalination plant using RO technology, with a record production capacity of 670,852.4 cubic meters per day. It was also built on the smallest land area globally for a plant of its kind, thanks to the application of advanced technical methodologies and value engineering. This agreement follows a joint announcement made earlier this year between the AIIB and the Government of Saudi Arabia, which laid the groundwork for long-term cooperation in the areas of water, wastewater, renewable energy, sustainable transport, and urban development.
Argaam
28-02-2025
- Business
- Argaam
PPP model allows private sector to develop infrastructure with govt: Al-Jadaan
Minister of Finance Mohammed Al-Jadaan said Saudi Arabia adopted a public-private partnership (PPP) model, allowing private entities to collaborate with the government in developing and managing infrastructure projects. Speaking at the G20 Finance Ministers and Central Bank Governors Meeting, Al-Jadaan highlighted key initiatives such as the National Center for Privatization and the National Infrastructure Fund, which focus on attracting private investments in sectors like transportation, water, and energy. The minister emphasized that the global economy is at a critical crossroads. "The challenges, including slow growth and high debt, are intensifying due to economic fragmentation and trade tensions, highlighting the urgent need for effective coordination and multilateral cooperation," he noted. Al-Jadaan also noted the resilience of the economies in the MENA region despite their successive challenges, highlighting the opportunities and potential that the countries in the region possess for progress and prosperity. He explained that what happens in the region has a significant impact on the international stage.
Arab News
13-02-2025
- Business
- Arab News
Saudi Arabia launches new financing products to boost construction sector
RIYADH: Saudi Arabia has rolled out infra-guaranteed financing and surety bonds to support contractors in the construction industry, according to a senior official. In an interview with Arab News at the third Private Sector Forum in Riyadh on Thursday, Leyla Abdimomunova, head of the Real Estate and Construction Department at PIF's National Development Division, explained that her department is focused on strengthening the capabilities of contractors in the Kingdom through various upskilling initiatives and pre-qualification programs. This push to fortify the construction sector is critical to Saudi Arabia's broader economic diversification strategy, where infrastructure development plays a key role. According to Mordor Intelligence, the Kingdom's construction market is projected to reach $74.11 billion by 2025, with a compound annual growth rate of 5.37 percent, ultimately reaching $96.26 billion by 2030. 'One of the biggest issues that the contractors are facing is access to finance and resources, to be able to mobilize for their projects, to purchase materials, and to pay their workers throughout the whole project. And typically banks, they are not very eager to finance construction projects in general because they're high-risk and smaller contractors in particular,' said Abdimomunova. She added: 'So, we have created a number of products specifically targeting contractors. One of them is infra-guaranteed financing. National Infrastructure Fund guarantees up to 50 percent of the bank loans provided to contractors. We signed the first-ever infra-backed financing package. It was signed by the National Infrastructure Fund, Arab National Bank, and one of our contractors called Saudi Pan Kingdom Co.' Abdimomunova stated that the inaugural infrastructure-backed financing package will be utilized for a project within ROSHN. She also highlighted that Saudi Arabia is the first country in the Gulf Cooperation Council to introduce surety bonds, which serve as an alternative to traditional bank performance bonds. 'The second great achievement that we had on contractor financing is a completely new product in the GCC region. It is common across the world, but unfortunately, it was not previously available in the Kingdom, and it is called a surety bond. A surety bond is an insurance alternative to a bank performance bond,' said Abdimomunova. She added that the first-ever surety bond in the entire GCC region was signed between Walaa Insurance Co. and System Security Solutions Co. and it will serve one of the projects in Red Sea Global. Explaining more about surety bonds, she continued: 'Surety bond allows to function like an insurance, where it provides a guarantee to the contractor that they can present to their client as a guarantee that if something wrong happens with the project, then insurance company will step in and cover the losses.' Abdimomunova further explained that the primary role of the Real Estate and Construction Department is to develop products like surety bonds by collaborating with financial institutions, contractors, and development companies. She also emphasized the growing importance of localizing building materials, as demand for such products is increasing in the Kingdom due to the ongoing large-scale infrastructure projects. 'What we are trying to do and the target that we created for ourselves is that at least 50 percent of the supply gap should be covered through localization. We are working with Saudi development companies to aggregate and estimate the demand for building materials. We have now a demand estimate until 2040,' said Abdimomunova. She added that this information will be leveraged to attract investors and help expand capacity by establishing more factories. Abdimomunova also noted that her department is currently collaborating with 270 companies, half of which are based in the Kingdom, while the rest are international. This collaboration aims to increase the number of building material manufacturing factories in Saudi Arabia. 'Today, we have five factories already commenced last year. We expect about 20 more factories to open throughout the next two years. We have close to 100 companies already expressing their intent to localize,' said Abdimomunova. She added that her department is assisting companies in identifying investment opportunities, helping them conduct feasibility studies, facilitating connections with relevant ministries and financial institutions, and supporting them throughout the entire investment process. Abdimomunova also outlined additional efforts by the Real Estate and Construction Department to support contractors in the Kingdom. She explained that the department is responsible for developing the sector and the ecosystem surrounding the real estate development projects under PIF. 'So, what my department is doing is basically activating and mobilizing the whole ecosystem, attracting international contractors, working with the local contractors and helping them grow and prove their capabilities, attracting foreign direct investment into manufacturing of building materials, construction equipment, working with the local manufacturing partners to help them expand their capacity and build new factories, as well,' said Abdimomunova. She added that the primary goal of her department is to reach out to the private sector outside of the PIF, and bring them in to become the partners of the projects initiated by the wealth fund. According to Abdimomunova, the department is trying to strengthen medium-sized contractors through various initiatives and upskilling projects. 'We have a Contractor Prequalification Program. So it's a program that we run jointly with the Saudi Contractors Authority. It's a platform which allows local contractors to register and pre-qualify to work with our development companies. So today we have almost 3000 contractors registered on the platform and more than 300 contractors pre-qualified,' said Abdimomunova. She added: 'We also have contractor upskilling boot camps. So it's a training program. These boot camps are organized either by ourselves or by development companies. Through these camps, trying to give them the minimum skills that they need to be able to be invited to the projects and also to win this project.'
