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News The Saudi Arabian Monetary Authority (SAMA) has released regulations governing buy now, pay later (BNPL) firms. Saudi Arabia’s financial technology sector is poised for expansion as the Saudi Central Bank, also known as SAMA, has introduced regulations governing buy now, pay later (BNPL) companies. These guidelines, issued on Dec. 17, are aimed at overseeing the licensing process and establishing minimum standards for BNPL firms. SAMA emphasized that these regulations will support the sector’s growth and sustainability while ensuring the protection of users’ rights. The guidelines define BNPL activity as a form of financing that allows consumers to purchase goods or services without immediate payment. They include provisions related to licensing prerequisites, the regulation of internal policies and procedures, information security standards, and measures to combat financial crimes. SAMA specified that BNPL companies must have a minimum capital of SR5 million ($1.3 million), with the flexibility to adjust this figure as needed. Additionally, the regulations mandate that at least half of the human resources employed by BNPL companies must be Saudi nationals at the outset of operations, with this requirement applicable across all departments and organizational levels. The guidelines also outline regulatory requirements aimed at safeguarding consumers, establishing credit boundaries, and ensuring compliance with supervision and compliance standards. SAMA stated its commitment to enforcing compliance with relevant laws, regulations, rules, and instructions, including conducting inspection visits to BNPL companies’ headquarters, meeting with staff, and reviewing their systems, procedures, and records. These regulations come amidst a rising number of companies offering pay-later services in Saudi Arabia. Recently, Jeel Pay, a Saudi fintech startup, obtained approval from SAMA, bringing the total number of authorized BNPL companies in the Kingdom to seven. This development underscores SAMA’s ongoing efforts to support post-paid companies and reflects its broader commitment to advancing the objectives of Vision 2030. As outlined in the National Fintech Strategy, Saudi Arabia aims to have 525 such companies, creating 18,000 jobs and generating SR13.3 billion in direct gross domestic product contributions. To achieve these goals, SAMA is dedicated to fostering innovation, promoting financial inclusion, and enhancing accessibility within the region.

News According to the central bank governor, Turkiye’s lira bonds are poised to generate favorable returns. Turkish Central Bank Governor Hafize Gaye Erkan is encouraging foreign investors to explore government bonds denominated in Turkish lira as the country approaches the final stages of its tightening monetary policy cycle. According to Erkan, Turkiye is nearing economic stability, and Turkish lira bonds are expected to offer substantial returns. She emphasized the importance of seizing the current opportunity, as yields are projected to decrease in the future. Erkan suggested that although the stringent monetary measures have begun to impact consumer prices, she anticipates inflation will not drop to single digits until at least 2026. Since assuming office in June, the central bank, under Erkan’s leadership, has implemented significant interest rate hikes, raising rates by more than 30 percentage points to 40 percent. This announcement follows a decade where foreign investors largely avoided lira-denominated bonds due to Ankara’s unconventional economic strategies aimed at stabilizing the currency. Erkan noted a recent increase in interest from foreign investors, particularly from the US, in Turkish government bonds over the past month. However, Erkan expressed a preference for direct investments over swap contracts, citing their limited impact on the country’s reserves. Her remarks coincide with the Monetary Policy Committee’s recent suggestion of a slowdown and potential conclusion to the ongoing monetary tightening cycle. Erkan highlighted a decrease in price hikes across various sectors such as automotive, electronics, and furniture, though she acknowledged that transportation and food sectors may require more time to exhibit similar trends. She also addressed persistent high inflation in sectors like education and housing, attributing it to supply shortages impacting housing market dynamics. As of November’s end, Turkiye’s annual inflation rate stood at 62 percent, with projections indicating a rise to 65 percent by year-end and a subsequent decrease to 36 percent by the end of the following year.

News Saudi and Korean industry ministers have signed a Memorandum of Understanding (MoU) to broaden industrial collaboration. In a significant step forward in bilateral trade discussions, Saudi Arabia achieved a milestone during a meeting between its Industry and Mineral Resources Minister, Bandar Alkhorayef, and South Korea’s Trade, Industry, and Energy Minister, Lee Chang-yang, in Seoul. During the meeting, the ministers inked a memorandum of understanding (MoU) between the Saudi Authority for Industrial Cities and Technology Zones (MODON) and the Korean GL Rapha Holding Co., with an investment totaling SR750 million ($199.93 million). This agreement aims to facilitate the manufacturing of vaccines, biotechnology, and chemicals by allocating 51,000 square meters of industrial land in Sudair City for Industry and Business. Moreover, discussions focused on exploring joint projects, agreements, and investment opportunities across various industrial sectors, with a particular emphasis on enhancing trade exchange and fostering the development of non-oil exports. The meeting underscored the historical ties between the two nations and highlighted the importance of reciprocal visits to further strengthen relations, particularly in the industrial and mining sectors. Concurrently, representatives from the Korean government and leaders from major Korean companies in the mining industry engaged in additional discussions on the sidelines of the forum. Minister Alkhorayef’s visit also included tours of factories in Changwon and Seoul. In Changwon, he interacted with officials from Doosan company and toured the factory premises, witnessing the company’s advancements in various sectors such as thermal power plants, turbines, generators, desalination plants, castings, and packaging. Furthermore, a separate MoU was signed between the Saudi National Automotive Manufacturing Co. and KG Mobility, a prominent automobile manufacturer in Korea. Minister Alkhorayef gained insights into KG Mobility’s production of multi-use vehicles, SUVs, crossover SUVs, and their plans for electric cars. The visit aimed to bolster Saudi-Korean relations and sustain collaboration. Notably, in 2022, Saudi Arabia’s non-oil exports to South Korea amounted to approximately SR7.2 billion, while non-oil imports from South Korea totaled SR18.4 billion for the same period.

News A contract valued at $17 million has been finalized for water initiatives in the Jazan area. In Riyadh, the sovereign wealth fund has inked a contract valued at SR64.19 million ($17.02 million) to support water projects in Jazan’s cities and villages, aimed at enhancing water security nationwide. The agreement, signed with Alkhorayef Water and Power Technologies Co., spans a period of 36 months and involves the operation and maintenance of water projects in the region, as disclosed in a stock market filing. This initiative is consistent with AWPT’s mission to develop, manage, and deliver sustainable water, environmental, and energy solutions, underscoring a commitment to excellence and innovation to surpass stakeholders’ expectations. It also aligns with the company’s vision of spearheading the advancement of water, environmental, and energy solutions for societal well-being. The financial ramifications of this new contract commenced in the fourth quarter of 2023. Previously in November, AWPT secured a 15-year contract valued at SR2.2 billion from the National Water Co. to manage and maintain sewage treatment plants in Heet and Al-Hayer regions of Riyadh. The financial impacts of this project are expected to materialize in the second quarter of 2024. As part of this agreement, AWPT will undertake the design, rehabilitation, testing, and maintenance of four sewage plants, collectively capable of treating 780,000 cubic meters of sewage daily in Heet and Al-Hayer. The rehabilitation process will unfold in two phases over 36 months, with operation and maintenance commencing upon contract commencement. Prior to this, in April, AWPT secured an SR1.62 billion contract from the National Water Co. to operate and maintain sewage treatment plants in Riyadh. The 15-year contract encompasses the modernization of Manfouha Northern, Manfouha Eastern, and Al-Manfouha sewage treatment plants. Rehabilitation activities are slated to be completed in two phases within 36 months from the contract’s initiation.

News What is the reason behind China dominating the majority of business dealings with Saudi Arabia? The recent roadshow held by the Saudi Ministry of Investment in China saw Minister Khaled Al-Faleh meeting with Chinese counterparts to discuss expanding trade, investments, and technology collaboration. During these discussions, both sides expressed a willingness to jointly promote China’s Belt and Road infrastructure investment program and Saudi Arabia’s Vision 2030 initiative. The two nations also committed to enhancing cooperation in various sectors including energy, aviation, solar energy, artificial intelligence, and safeguarding global industrial supply chains. This deepening relationship builds upon the initial foundation of hydrocarbon ties and has led to the signing of a comprehensive strategic partnership agreement and multiple investment deals between the two countries. At the recent conference, deals worth over $25 billion were signed, encompassing agreements in energy, agriculture, tourism, mining, financial services, logistics, infrastructure, technology, and healthcare. Notably, the Saudi Esports Federation and Chinese Esports Tournament Operator VSPO signed a memorandum of understanding worth $8.5 billion to promote electronic sports opportunities and cooperation. Additionally, Ajlan & Bros Holding Group, a prominent family office in China, inked a $7.5 billion agreement with Oriental Energy Co. to explore collaborative opportunities in manufacturing. The Saudi Ministry of Investment also struck a $2 billion deal with China’s CRRC Group to develop renewable energy and sustainable mobility projects in the Kingdom. The partnership between Saudi Arabia and China has gained momentum, with bilateral trade surpassing $106 billion last year, marking a significant increase from the previous year. China’s active participation in Saudi Arabia’s investment roadshows underscores its growing presence in the Kingdom’s business landscape.

News Moody’s forecasts a consistent annual growth rate of 4% for Saudi Arabia’s non-oil economy until 2030. Saudi Arabia’s endeavors in economic diversification are poised to yield significant results, with projections indicating that the non-oil sector will witness annual growth rates ranging between 3 percent and 4 percent until 2030, according to insights shared by an economist from Moody’s Analytics, Catarina Noro, during a recent webinar. Over the past decade, there has been a notable shift in Saudi Arabia’s economic landscape, with the non-oil sector increasingly contributing to the Kingdom’s GDP growth. Noro emphasized that this trend is expected to continue, with the non-oil economy projected to constitute approximately 56 percent of Saudi Arabia’s GDP by 2030. Moody’s Analytics also anticipates a relatively modest growth rate of between 0.5 percent and 1.5 percent in Saudi Arabia’s oil sector from 2025 onwards until 2030. Noro highlighted the critical importance of bolstering the non-oil private sector to align with the objectives outlined in Vision 2030, emphasizing that the continued provision of credit facilities to small and medium-sized enterprises (SMEs) by Saudi Arabia is vital. This support is anticipated to stimulate growth, particularly in sectors such as tourism and construction. To sustain the momentum of growth in the non-oil private sector, Noro suggested a focus on expanding the labor force, emphasizing the significance of increasing the female participation rate and accommodating the growth of the expatriate population. A burgeoning labor force is expected to foster further growth in the private sector and the non-oil economy. Recent reports affirm the positive trajectory of the non-oil private sector in Saudi Arabia. The General Authority for Statistics disclosed that non-oil activities in the Kingdom expanded by 3.5 percent in the third quarter of the current year. Additionally, the Small and Medium Enterprises General Authority (Monsha’at) reported a 3.5 percent increase in the number of SMEs in the Kingdom, reaching 1.27 million by the end of the third quarter. Notably, more than 40,000 new businesses were launched during this period, with Riyadh accounting for 43.3 percent of SMEs in the Kingdom.

News The General Authority of Civil Aviation (GACA) initiates a project aimed at overseeing and supervising passenger traffic. Abdulaziz Al-Duailej, the president of the General Authority of Civil Aviation (GACA), has launched a pioneering digital initiative to streamline passenger movement in Saudi Arabia’s airports, as reported by the Saudi Press Agency. The initiative is part of GACA’s efforts to elevate the aviation industry in the Kingdom, aligning with its commitment to digital transformation and international service standards. It builds upon previous initiatives, including the establishment of travelers’ rights, aimed at enhancing service excellence. The project will cover 27 airports nationwide and is hailed for its innovative approach, according to Abdulaziz bin Abdullah Al-Dahmash, the executive vice president for Quality and Passenger Experience at GACA. It is aligned with the objectives of the National Aviation Strategy to enhance the visitor experience at Saudi airports. The initiative will introduce an integrated passenger flow management and analysis system, incorporating individual dashboards for each airport. This will streamline decision-making processes and enhance operational efficiency, particularly in measuring passenger wait times and improving various stages of departure and arrival procedures. The aim is to automate the measurement of waiting times for 99 percent of passenger traffic, ensuring a seamless experience throughout the airport journey, emphasized Al-Dahmash. The project represents a crucial step in keeping pace with digital advancements and enhancing the traveler’s experience, underscoring the aviation industry’s commitment to prioritizing customer satisfaction. Highlighting the significance of guest experience in the aviation sector, Al-Dahmash concluded that the initiative underscores GACA’s dedication to continuous improvement and adaptation to digital transformations. In June, GACA initiated the draft economic regulations for airports, aiming to enhance efficiency, competitiveness, and passenger experience within the Saudi aviation sector. These regulations seek to support the industry’s growth while ensuring transparency and fairness for all stakeholders involved.

News BlackRock plans to allocate as much as $400 million into Positive Zero, a company based in Dubai focused on decarbonization efforts. BlackRock has committed to investing up to $400 million in Positive Zero, a decarbonization company based in Dubai, as reported by Reuters citing a statement from Positive Zero on Monday. The investment aims to support Positive Zero’s efforts in advancing energy transition projects across Gulf countries. Established by Creek Capital, a climate investment-focused firm, Positive Zero emerged last year during the UN COP27 climate summit in Egypt. It was formed by merging three entities: solar company SirajPower, energy efficiency services provider Taka Solutions, and on-demand battery business HYPR Energy. Creek Capital, co-founded by Mohammed Abdulghaffar Hussain and David Auriau, is associated with Dubai-based family conglomerate Green Coast Enterprises. Auriau previously worked at Alstom Power and consultancy Oliver Wyman. According to Ed Winter, BlackRock’s head of Asia-Pacific and Middle East for diversified infrastructure, Positive Zero is well-positioned to benefit from the favorable conditions driven by ambitious economic growth and energy-transition goals set by the UAE and other Gulf nations. These remarks were included in the statement issued by Positive Zero. The investment aligns with the UAE’s objectives highlighted during the recently concluded COP28 summit, aiming to triple renewable energy capacity by 2030, as mentioned by Hussain in the statement. BlackRock declined to provide further comment beyond the release issued by Positive Zero.

News Saudi Arabia introduces a fintech initiative aimed at enhancing financial innovation. Saudi Arabia has rolled out a new initiative in the realm of financial technology named Makken, aimed at fostering and advancing the sector within the Kingdom. The official launch of this program took place on December 17, with Ayman Al-Sayari, the Governor of the Saudi Central Bank, and Mohammed El-Kuwaiz, the Chairman of the Capital Market Authority, leading the event. Makken represents an extension of the ongoing endeavors by the Saudi Central Bank, commonly known as SAMA, and the Capital Market Authority (CMA) to bolster and cultivate the fintech landscape. It operates under the broader scope of the Financial Sector Development Program. Over the course of three years, Makken seeks to empower 150 emerging fintech enterprises, thereby directly contributing to the sector’s growth trajectory and advancement. During the inauguration ceremony, Governor Al-Sayari underscored the Kingdom’s significant strides across various domains, with fintech emerging as one of the most rapidly evolving sectors. He emphasized the relentless dedication to fostering digitization and innovation within the financial realm. Al-Sayari highlighted, “We are witnessing rapid growth in the activities of fintech companies, reaching 207 companies by the end of November 2023, compared to 147 companies at the end of 2022, representing a remarkable 40 percent growth.” Additionally, he noted that since the beginning of 2023, approximately 3,000 direct jobs have been generated in the fintech sector, bringing the total employment figure to over 5,000 by the end of the third quarter of the year. The Governor also pointed out significant milestones, such as the establishment of SAMA’s Open Banking Lab in early 2023 and ongoing efforts towards releasing the second version of the regulatory framework for open banking payment services. He mentioned that the Saudi Central Bank and the Capital Market Authority have collectively issued and updated 16 documents, comprising instructions and regulations, to bolster fintech and drive digital transformation within the Kingdom’s financial sector. In terms of transactions, the Kingdom observed a 23 percent surge in point-of-sale services transactions during the first 11 months, totaling 8.1 billion compared to 6.6 billion in the corresponding period of the previous year. Moreover, the value of transactions from January to November witnessed a 5 percent increase, reaching SR560 billion ($135.68 billion) compared to SR509 billion in the same period last year. Al-Sayari concluded on an optimistic note, expressing confidence in the ongoing progress and future prospects of the fintech sector in Saudi Arabia.

News Top executives in the aviation sector will convene in Riyadh to deliberate on the future of the aviation industry. The second edition of the two-day Saudi Airport Exhibition is scheduled to take place in the capital city of Saudi Arabia. RIYADH: The second Saudi Airport Exhibition is set to bring together thought leaders and stakeholders from the global aviation industry in Riyadh. Scheduled for December 19-20 at the Riyadh International Convention and Exhibition Center, this event will host two co-located conferences aimed at enriching discussions on emerging trends and critical issues within the sector. Expecting over 6,000 aviation professionals, 250 global exhibitors, 50 participating companies, 200 regional buyers, and 2,000 pre-scheduled meetings, the co-hosted Global Aviation Issues Conference and Women in Aviation General Assembly will serve as platforms for industry leaders to engage in dialogue regarding challenges and collaborative opportunities. Organized by Niche Ideas with Matarat Holding, an arm of the General Authority of Civil Aviation, this event has experienced significant growth, expanding by over 75 percent since its inaugural edition last year. It will once again gather global aviation experts, innovation leaders, and industry expertise in the Middle East. Exhibitors from Saudi Arabia, Bahrain, the UAE, as well as the UK, Italy, Germany, and the US, among others, will showcase their latest innovations. This event will take place in a Kingdom whose economy has surpassed the $1 trillion mark for the first time. Daksha Patel, the Event Director, highlighted the dynamic nature of the Middle East’s airport development market, particularly in Saudi Arabia. She noted the region’s unprecedented pace of aviation transformation, characterized by new initiatives and plans announced every few weeks. The “Global Aviation Issues Conference” is expected to attract over 500 participants, including Saudi transport and aviation leaders, global experts, and suppliers. It aims to facilitate collaborative efforts toward delivering the Kingdom’s aviation strategy and promoting industry growth, sustainability, and profitability globally. Saudi Arabia is undergoing its largest-ever aviation expansion program as part of Vision 2030, aiming to triple the country’s airports capacity by 2030 and achieve the fastest passenger traffic growth in the Middle East between 2020-2040. Jihad Boueri, the Vice President of airports and communication at SITA, noted Saudi Arabia’s emergence as one of the most promising aviation markets in the Middle East, attributing it to the Kingdom’s commitment to transforming its aviation infrastructure and enhancing passenger experiences. The event will include discussions on various topics such as the current state and future of aviation, regional and global connectivity, airline industry trends and challenges, and emerging technologies. Additionally, the first-ever “Women in Aviation General Assembly” will underscore the role of women in advancing Saudi Arabia’s aviation goals and creating new employment opportunities across the Middle East. Featuring global speakers, this conference aims to promote greater diversity and opportunities for women in the regional aviation industry. Key themes of the event will include women’s empowerment under Vision 2030, initiatives by the Kingdom, an inclusive future for aviation, as well as women in leadership and technical operations. The event will also host an awards ceremony to recognize global suppliers for notable innovations and technologies that have enhanced airport passenger experiences and optimized airport operations. Award categories will include infrastructure expansion, sustainability, ground support solutions, innovation, technology, and passenger experience.