Foreign direct investment inflows to KSA hit $5.17b

RIYADH, Mar 28 (Arab News): Foreign direct investment inflows to Saudi Arabia rose 17 per cent in the fourth quarter of 2023 compared to the previous period, according to recent data.

The analysis, released by the General Authority of Statistics, utilizes an updated approach characterized by heightened transparency and governance standards. FDI inflows were shown to have reached SR19.38 billion ($5.17 billion), up from SR16.6 billion in the third quarter.

FDI outflows, representing the Kingdom's investments in foreign countries, also increased by around 17 per cent to SR6.19 billion during this period. Consequently, the net inflow, reflecting the difference between the two, reached SR13.187 billion.

The updated methodology for calculating FDIs aligns with international standards and was developed to enhance accuracy and comprehensiveness through collaborative efforts by the Ministry of Investment, the General Authority for Statistics, and the Saudi Central Bank, in conjunction with the International Monetary Fund.

The new methodology reflects the Kingdom's commitment to enhancing investment promotion and transparency, aiming to create an attractive global financial environment.

This effort includes initiatives such as the National Investment Strategy, the Regional Headquarters Program, and zero-income tax incentives for foreign companies. These measures are seen as essential for advancing Vision 2030, which aims to expand and diversify Saudi Arabia's economy.

In 2023, the Kingdom saw a 12 per cent increase in FDI inflows, reaching SR72.28 billion compared to SR64.6 billion in 2022. This excludes a major SR58.1 billion deal with Aramco in 2022, where a consortium led by BlackRock Real Assets and Hassana Investment Co. acquired a 49 per cent stake in a new gas pipeline subsidiary.

Meanwhile, Abu Dhabi National Energy Co., also known as TAQA, together with JERA Co., Inc, Japan's largest power generation company, announced Thursday that they have entered into a Power and Steam Purchase Agreement with Saudi Aramco Total Refining and Petrochemical Co., or SATORP, a joint venture company owned by Saudi Aramco and TotalEnergies.

According to the Emirates News Agency, they will develop a greenfield industrial steam and electricity cogeneration plant that will produce electricity and steam for the Amiral petrochemical complex to be developed in Jubail in the Eastern Province of Saudi Arabia.

The Amiral petrochemical complex is expected to house one of the largest mixed-load steam crackers in the Arab Gulf region.

The Amiral cogeneration plant will include state-of-the-art power and steam generation systems, gas and water receiving systems, and gas-insulated switchgear interconnections while meeting stringent efficiency standards imposed by the Saudi Energy Efficiency Centre.

The project also provides for the future installation of a carbon dioxide capture plant and is capable of hydrogen cofiring, WAM reported.

The Amiral cogeneration plant will be developed by a special purpose entity owned by TAQA, holding 51 per cent, and JERA, holding 49 per cent. It will operate on a build, own, and operate basis for 25 years, with the possibility of extension by five years upon mutual agreement.