South African Minister of Electricity: Imminent Investments with Aramco, ACWA Power

South Africa’s Minister of Electricity Kgosientsho Ramokgopa (Reuters)
South Africa’s Minister of Electricity Kgosientsho Ramokgopa (Reuters)
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South African Minister of Electricity: Imminent Investments with Aramco, ACWA Power

South Africa’s Minister of Electricity Kgosientsho Ramokgopa (Reuters)
South Africa’s Minister of Electricity Kgosientsho Ramokgopa (Reuters)

 

South Africa’s Minister of Electricity, Kgosientsho Ramokgopa, said that Saudi Aramco is likely to pump $10 billion to invest in his country’s petrochemical sector, amid expectations that ACWA Power will announce more investments in the renewable energy sector.
Speaking on the sidelines of his participation in the World Economic Forum in Riyadh, Ramokgopa revealed that Saudi Arabia is the largest Gulf investor in the renewable energy sector in his country.
On Saudi-South African relations, he told Asharq Al-Awsat in an interview that “relations between the two countries improved from the time South Africa gained its freedom in 1994. This year this relationship coincides with a very important milestone in South Africa’s history as South Africa simultaneously celebrates 30 years of democracy it also celebrates 30 years of good bilateral relations between South Africa and the Kingdom of Saudi Arabia. 
“Following this in 1995 our first democratically elected President Nelson Mandela visited the Kingdom and his legacy since then has ensured that all subsequent Heads of State from my country have visited. Our current president Cyril Ramaphosa visited twice, the first time in 2018 and more recently in October 2022, when he met with His Royal Highness the Crown Prince and Prime Minister, Mohammed bin Salman. 
“Since then, there have been more than ten high-level visits between our two countries”, he said.
He added that investments from Saudi Arabia “shows significant progress with huge investments in SAs renewable energy sector. Saudi Arabia is SAs largest investor from the GCC region. Following President Ramaphosa’s State Visit in 2022, ACWA Power is expected to announce further investments in the renewable energy sector. A further US$10bn in investment is expected in the petrochemical sector, through Saudi Aramco. The recent investment was by Maaden investing in South Africa’s Chemicals sector in a Sales, Marketing & Support project.
“In March 2023, Saudia announced a resumption of direct flights to South Africa and earlier this month, the Saudi government announced that “It was agreed to include the Republic of South Africa [will be] among the group (A) countries where its nationals can obtain a tourist visa online (e-visa) or upon arrival.” As soon as this is implemented we will be the first African country to receive this privilege; whilst at the same time Saudi nationals do not require visas to visit South Africa for a ninety-day stay.”
“One of the key announcements made during the State Visit by President Ramaphosa in October 2022, was that Saudi Arabia will embark on importing red meat from South Africa. Robust engagements between the relevant authorities from the two countries have resulted in the uplifting of a 19-year-old ban and since February 2024, South African red meat and red meat products have been available on the shelves of major grocery stores throughout the Kingdom”, the Minister noted.
“In October 2023 Saudi Arabia announced the introduction of Saudi e-visas for citizens of 49 countries including South Africa, with a quick and easy-to-use online portal, and affordable fees. Making South Africa the first African country to receive the e-visa for Saudi Arabia”. 
“All of this is a clear indication of our strong growing relations. We look forward to ensuring that the work and effort that we as leaders of our countries continue to be reflected in the efforts being done by our support teams both economically and politically”, the Minister underscored.
On his participation in Davos in Riyadh, Ramokgopa stated that “participating in this WEF roundtable presents a significant opportunity to engage in critical dialogues on global economic and developmental challenges. It serves as a platform for exchanging ideas, forging partnerships, and advancing collective efforts towards sustainable development and prosperity”.
He added: “At the forefront of my participation are several pressing topics that concern not only South Africa but the entire global community. Firstly, ensuring access to reliable and affordable electricity remains a paramount concern. Electricity is the lifeblood of modern economies, essential for driving industrialization, powering innovation, and improving the quality of life for millions. Addressing energy poverty and enhancing energy access are imperative for fostering inclusive growth and development.
“Secondly, the transition towards renewable energy and the mitigation of climate change are central to our discussions. The world is facing unprecedented environmental challenges, and the urgency to decarbonize our energy systems cannot be overstated. Embracing clean and sustainable energy sources is not only an environmental imperative but also presents significant economic opportunities, particularly for regions abundant in renewable resources like South Africa.
“Moreover, the importance of fostering innovation and leveraging technology in the energy sector cannot be overlooked. Embracing digitalization, smart grids, and energy storage solutions are pivotal for enhancing the efficiency, reliability, and resilience of our energy infrastructure”.
He continued: “This year’s Riyadh gathering holds immense importance for the region and the world at large. It provides a platform for African nations to articulate their priorities, showcase their potential, and attract investments that can drive sustainable development and economic growth. By engaging in constructive dialogues and forging partnerships, we can collectively address shared challenges, unlock opportunities, and pave the way for a more prosperous and sustainable future for all”.
On the prospects of cooperation with Saudi Arabia in the field of energy, clean energy and electric energy, the Minister stated that investment from Saudi Arabia shows significant progress with huge investments in SAs renewable energy sector. Saudi Arabia is SAs largest investor from the GCC region. According to FDI markets, Saudi investment into South Africa is estimated at $1.62 bn with 563 jobs created. The recent investment was in 2022 by Maaden investing in South Africa’s Chemicals sector in a Sales, Marketing & Support project. Maaden, a mining company and a subsidiary of Saudi Arabia-based Public Investment Fund, has opened a new regional office in South Africa. Saudi investment into SA is focused in sectors such as oil and gas, renewable energy, business and financial services, real estate, software and IT services and transportation. In this regard South Africa’s position is to attract investment from Saudi Arabia in the following areas: 
- Investment in the Special Economic Zones and Industrial Development Zones: Oil and gas, which involve oil storage and building of an oil refinery with opportunities in Saldanha Bay and Richards Bay Special Economic Zones (SEZs). 
- Green economy: Power generation in terms of independent power generation, energy infrastructure and alternative energy. 
- Renewable energy: Solar PV and Concentrated Solar Power - manufacturing/assembly.
About South Africa’s plan to secure energy and electricity, Ramokgopa said: “In addressing South Africa's energy security needs, the government has laid out a comprehensive plan guided by key policy documents such as the 2023 draft Integrated Resource Plan (IRP) and the 2022 Energy Action Plan. These documents serve as the cornerstone of our strategy to ensure a reliable, sustainable, and inclusive energy future for the nation”.
The South African Minister added: “Our plan focuses on several key pillars:
Diversification of Energy Sources: The IRP emphasizes the importance of diversifying our energy mix to reduce dependency on any single energy source. This includes increasing the share of renewable energy sources such as solar, wind, and hydroelectric power while also maintaining a balanced mix that includes coal, natural gas, nuclear, and energy storage technologies.
Promotion of Renewable Energy: The government is committed to significantly increasing the contribution of renewable energy to our energy supply. Through the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) and other initiatives, we aim to expand our renewable energy capacity, harnessing South Africa's abundant solar and wind resources.
Investment in Infrastructure: Ensuring reliable and efficient energy infrastructure is crucial for energy security. The Energy Action Plan outlines measures to invest in and upgrade our electricity transmission and distribution networks, enhancing their capacity and resilience to meet growing demand.
Whilst our efforts have focused on the supply and demand side of the energy value chain, we have now forged ahead to play a more aggressive role in mapping and planning for investment in the maintenance, modernization, and expansion of the national grid in Transmission infrastructure. This work includes the institutional and funding requirements in this regard. It is expected that 53GW will require a connection to the grid by 2032, which in turn requires over 14,000km of new transmission lines, amounting to planned investments of around $20b (USD) over the next ten years. 
Energy Efficiency and Conservation: The government recognizes the importance of energy efficiency and conservation in optimizing energy use and reducing demand. The Energy Action Plan includes initiatives to promote energy-efficient technologies, practices, and behavior among consumers and businesses.
The economic contribution of the energy sector is significant and multifaceted. Energy is a vital enabler of economic activity, contributing to sectors such as manufacturing, mining, agriculture, and services. In terms of growth rate, our National Treasury's medium-term outlook has improved slightly, with an average growth of 1.6% forecast, compared with 1.4% in the 2023 Medium Term Budget Policy Statement (MTBPS)”.

 



Saudi Bank Loans to the Private Sector Reach Record Highs

A general view of the Saudi capital, Riyadh. (SPA)
A general view of the Saudi capital, Riyadh. (SPA)
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Saudi Bank Loans to the Private Sector Reach Record Highs

A general view of the Saudi capital, Riyadh. (SPA)
A general view of the Saudi capital, Riyadh. (SPA)

Saudi banks’ lending to the private sector reached an all-time high in January 2025, reflecting ongoing efforts to strengthen the Kingdom’s non-oil economy in line with Vision 2030.

According to the Saudi Central Bank’s (SAMA) monthly report, bank claims on the private sector grew by nearly 14% year-on-year in January, reaching SAR 2.89 trillion ($770.6 billion), compared to SAR 2.54 trillion ($676 billion) in the same month of the previous year. These claims include loans, advances, and other credit facilities extended by banks, serving as a key indicator of available credit in the financial system.

Bank credit accounted for approximately 96% of total claims on the private sector, which also includes investments in private securities. Bank lending rose to SAR 2.79 trillion ($744 billion) in January, marking a 13% annual increase from SAR 2.46 trillion ($656 billion) in January 2024.

Meanwhile, deposit growth was comparatively lower, rising by 9.2% year-on-year to reach a record SAR 2.73 trillion ($728 billion) in January 2025, up from SAR 2.50 trillion ($666 billion) in the same period of 2024.

Speaking to Asharq Al-Awsat, Anton Lopatin, Senior Director for Banks at Fitch Ratings, explained that most Saudi private sector companies have limited access to public financing through bonds or sukuk issuances. As a result, bank loans remain the primary means of securing working capital and funding new projects.

Over the past five years, total private sector financing has nearly doubled, indicating a strong demand for credit from businesses and individuals. This growth is essential for further expanding Saudi Arabia’s non-oil economy and aligns with Vision 2030.

Despite the rapid credit expansion in recent years, Saudi Arabia’s economy remains less leveraged compared to other Gulf Cooperation Council (GCC) countries, such as the UAE, Qatar, and Kuwait. Lopatin noted that Saudi banks have significant room for further expansion, particularly given the strong projected growth of the non-oil sector, which is expected to exceed 4% in 2025–2026.

Lopatin also pointed out that anticipated interest rate cuts should theoretically lower borrowing costs. However, this will also depend on banking sector liquidity. He noted that in December 2024, Saudi banks experienced a monthly decline in deposits for the first time in five years, leading to upward pressure on funding costs. If the funding gap continues to widen—where loan book growth outpaces deposit accumulation—the benefits of lower interest rates for borrowers may be diminished.

SAMA’s report also highlighted a continued deficit in Saudi banks’ net foreign assets, which turned negative in July 2024 for the first time since 1993. In January 2025, the deficit stood at SAR 10.7 billion ($2.8 billion), compared to a surplus of SAR 70 billion ($18.6 billion) in the same month of the previous year.

Net foreign assets represent the difference between banks’ foreign investments and external liabilities, reflecting the banking sector’s exposure to the global economy and its ability to meet international obligations.

As part of Vision 2030, Saudi Arabia is aiming to increase the contribution of small and medium-sized enterprises (SMEs) to GDP to 35%, while raising the private sector’s share to 65%. Additionally, the Kingdom is seeking to boost foreign direct investment (FDI) to 5.8% of GDP and expand non-oil exports to 50% of total exports.

The International Monetary Fund (IMF), in its latest Article IV consultation, projected that Saudi Arabia’s public debt-to-GDP ratio will reach 30% in 2025. It also expects private sector credit growth to reach 9.7% in 2025, compared to 10.1% in the previous year.