World Islamic Finance Review gif Key Sectors and Investment Projects


Energy Sector Projects: Investment projects in the energy sector are marked by significant private sector participation, with private-sector energy projects under development worth US $79 billion. The Saudi Arabian General Investment Authority (SAGIA) Governor Amr Al-Dabbagh has claimed that the Saudi energy industry holds US $300 billion in investment opportunities between now and 2020, including petrochemicals, minerals, power and water. The Arab Oil and Gas directory has predicted major new energy investments in petrochemical projects (US $90 billion), power generation (US $90 billion), water de- salination plants (US $88 billion) and natural gas-related projects (US $50 billion).In addition to these energy-related investments, the sector is expected to attract investments worth US $140 billion for outlays on general infrastructure, including the country’s Economic Cities and the transport network.


Transport and Logistics Projects: Saudi Arabia recognises its potential to become a leading global transport and logistics hub. Saudi Arabia’s rapid domestic development, and its investment in the planned Economic Cities has increased the potential demand predicted for transport-based projects. The Economic Cities have the potential to contribute approximately 30 per cent of the expected growth in cargo flow. On the whole, domestic cargo demand within Saudi Arabia is expected to grow by a four to five per cent compound annual rate throughout 2020, while international flows are expected to grow by five per cent and seven to eight per cent for air and sea cargo respectively. Current infrastructure projects include airport renovations and massive rail development projects, such as the Medina-Mekkah monorail, the Land Bridge and the north-south Mineral Line. SAGIA has identified nineteen priority investment oppor- tunities for transportation facilities, fifteen of which would be based in the planned Economic Cities. Overall, an investment of US $100 billion is anticipated over the next 10 years, including sea ports, air transport, railway, road and logistics centres.


ICT Sector: Saudi Arabia is the region’s largest ICT market, displaying strong growth in consumer and enterprise end markets. Saudi Arabian telecommuni- cations and information technology industries represent over 55 per cent and 51 per cent of the total Middle Eastern markets respectively. Saudi Arabia’s ICT sector is rather under-developed by global standards, but is showing high growth potential. ICT spending has grown at over 10 per cent per year in the years 2001-2006, reaching US $7.3 billion in 2006. Deregulation, privatisation and WTO accession has promoted private-sector investment and provided significant investment incentives. Several Saudi Arabian IT industries are showing rapid growth, driven both by the committed support of major multina- tionals, and by the expanding skills and confidence of local companies. Recent examples of public-private funding partnerships include KACST’s R&D co- funding initiatives and the recent collaboration between SAGIA and Intel.


Education Sector: The world’s eighth highest education spender, Saudi Arabia has recently initiated a complete revamp of its educational system, costing around US $3.1 billion. Over 90 per cent of Saudi students are educated in public schools, while only affluent Saudi and expatriate children attend private schools. There is ample potential for private sector participation at the primary and secondary levels of Saudi Arabia’s education system. Tertiary education enjoys greater private participation. 80 per cent of engineers, doctors and scientists are foreigners. Until recently, foreign organisations were not permitted to directly educate Saudi students. Now, for the first time, the Economic Cities are providing students with opportunity to benefit from skills and knowledge from outside the country. There is significant demand within the country for a full range of educational and training services, including vocational programs, e-learning, content development, seminars, etc.


Life Sciences Sector: Saudi Arabia aspires to become a regional leader in life science industries such as pharmaceuticals, medical devices and agrochemi- cals. The government is supporting the development of these sectors through a range of direct and complementary investments. Research and Develop- ment activities are encouraged by significant development finance and research grants on offer from the government through institutions such as the King Abdulaziz Center for Science and Technology (KACST) and the King Abdullah University for Science and Technology (KAUST). The region is an excellent loca- tion for manufacturing activities in the life sciences sector, due to its high operating efficiency and low-cost access to livestock, one of the most significant and volatile cost components for pharmaceuticals and agrochemicals manufacturers. As the largest marketplace within the Arab world, Saudi Arabia forms an excellent forum for export to the vast healthcare and agrochemical markets within both Europe and Asia.


Healthcare Sector: Saudi Arabia is the Middle East’s largest market for healthcare consumers. Its aging, yet wealthy population provides an opportunity for investors to benefit from investment in healthcare. Private hospitals, pharmaceutical companies and medical device manufacturers in the country are all interested in developing international partners. The healthcare sector has a high growth potential; investment opportunities lie across the healthcare value chain, including medical education, research, facilities, provision and reimbursement.


King Abdullah Economic City (KAEC): The KAEC is the largest private sector project in the region. Located between the cities of Mecca and Medina and the commercial hub of Jeddah, the new Economic City (KAEC) is an upcoming future metropolis. With an investment worth US $27 billion, it will be home to two million people, and when completed will be the size of Washington DC. The city is being built by a consortium headed by global real estate player Emaar Properties in partnership with selected Saudi investors. Its activity will focus on ports, logistics, light industry and services, and will have a well-planned sea port, industrial, education and residential zones, central business district, and waterfront resort area. Key investment sectors in the planned city include the manufacture of a range of petroleum derivatives, including high-end plastics manufactured for automotive, biomedical, construction and food packag- ing applications.


Prince Abdulaziz bin Mousaed Economic City (PABMEC): PABMEC will be the largest modern transportation and logistics hub in the Middle East. PABMEC will occupy 156 million square metres of land, situated right by the key Middle Eastern trade and transportation routes. This planned Economic City will benefit from the region’s strong agriculture, minerals and climate. With an investment of US $8 billion, the city is expected to create 55,000 new jobs. It will provide investment opportunities for logistics, agribusiness, minerals, and construction material business.


Jazan Economic City (JEC): JEC is a planned state-of-the-art industrial zone for energy intensive industries. Located 60 kilometres north-west of the city of Jizan, Saudi’s most important port on the Red Sea, it is expected to attract over SAR 100 billion in investment and create 100,000 new jobs. It will focus on heavy industry, lifestyle industries, agricultural industries, and people development. Major investment zones include industrial parks planned to occupy two thirds of the city; a sea port; facilities for agriculture repackaging and distribution; fisheries; a business and cultural centre, and health and education areas.


2011 February Global Islamic Finance 43


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88