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Oxagon CEO: NEOM Port to Redefine Global Trade

NEOM Port (Asharq Al-Awsat)
NEOM Port (Asharq Al-Awsat)
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Oxagon CEO: NEOM Port to Redefine Global Trade

NEOM Port (Asharq Al-Awsat)
NEOM Port (Asharq Al-Awsat)

Vishal Wanchoo, CEO of Oxagon, highlighted the city as a beacon of innovation and sustainability at the heart of Saudi Arabia’s transformation, saying that the NEOM Port is set to reshape global trade.

Oxagon, a reimagined industrial city within NEOM, offers a clean ecosystem attracting factories of the future, relying entirely on renewable energy to achieve net-zero emissions. Its strategic location on the Red Sea, near global shipping lanes, positions it as a key hub for major markets and urban centers.

Embracing Sustainable Solutions

Discussing Oxagon’s strategic vision, Wanchoo noted that traditional industries often pose environmental and health risks and contribute to climate change. He emphasized the urgency of adopting sustainable solutions, which has prompted sectors to accelerate the transition to clean technologies and green energy.

“Oxagon provides a clean industrial ecosystem that welcomes factories of the future from across the globe. By relying solely on renewable energy, we offer manufacturers a platform to achieve their net-zero goals,” Wanchoo explained.

Strengthening Local Supply Chains

Wanchoo underscored Oxagon’s alignment with Saudi Vision 2030, which prioritizes developing promising industries, enhancing logistics, and bolstering local, regional, and international trade networks.

“Our focus is on developing seven industrial zones, along with vibrant urban areas that stimulate economic growth through retail and hospitality,” Wanchoo stated. He emphasized Oxagon’s role in making Saudi Arabia a regional hub for imports and exports through the advanced NEOM Port on the Red Sea, connecting global trade routes.

He added: “With over 13% of global trade passing through the Suez Canal annually, NEOM Port’s location enhances its significance as a gateway between Europe and Asia.”

Attracting Foreign Investments

Looking ahead, Wanchoo outlined Oxagon’s goal of driving economic diversification, fostering innovation, and attracting foreign investments over the next five years.

“We are actively engaging with major manufacturers to enhance our industrial ecosystem, strengthen local supply chains, and establish Saudi Arabia as a regional and global manufacturing hub,” he said.

Environmental Commitment

Wanchoo highlighted Oxagon’s commitment to sustainable construction methods. The pilot integrated community, Oxagon Hive, exemplifies this by reducing waste, minimizing costs, and ensuring scalability.

He noted that since taking over Duba Port in 2022, Oxagon has made significant strides in transforming it into a sustainable and automated facility.

“We have reused 100% of excavated materials and recycled decommissioned port facilities for new developments,” he said.

Challenges and Opportunities

“Building a new industrial model from scratch is complex, but we prioritize state-of-the-art infrastructure to support advanced, clean manufacturing,” the CEO of Oxagon remarked. He underlined the importance of partnerships with innovative companies and the adoption of cutting-edge technologies like AI and robotics to address global challenges.

Pioneering Green Hydrogen

Oxagon is also home to the world’s largest green hydrogen plant, developed by NEOM Green Hydrogen Company. Scheduled to produce up to 600 metric tons of carbon-free hydrogen daily by 2026, the plant will operate entirely on solar and wind energy. Currently, 60% of the facility’s infrastructure has been completed.

The project relies on NEOM Port for equipment deliveries, including electrolyzers, wind turbines, and hydrogen storage vessels, crucial for the plant’s operation.

Research and Innovation

Oxagon’s innovation hub, Oxagon Innovation Bay, will become operational in 2025, powered by NEOM Energy & Water’s Enowa-Circle central power station. Initial projects include launching a 20 MW electrolyzer to produce 8 tons of hydrogen daily, providing valuable data to optimize the main plant’s performance.

Milestones of 2023 and 2024

Reflecting on recent achievements, Wanchoo highlighted the 2023 launch of the first global accelerator in partnership with McLaren, focusing on supply chain challenges. Seven startups were selected out of 80 applicants, with funding and connections to venture capital provided. Three pilot projects are now underway in NEOM.

In 2024, milestones include opening NEOM Port to investors and advancing seven selected startups from over 100 participants to the final stages of development.

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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).

Saudi Arabia has raised $12 billion from global debt markets in its first international bond issuance of the year, attracting bids worth nearly $37 billion. This demonstrates strong investor appetite for Saudi debt instruments.

The issuance comes just two days after the approval of the 2025 annual borrowing plan by Minister of Finance Mohammed Al-Jadaan. The plan estimates financing needs for the fiscal year at SAR 139 billion ($37 billion). The funds will be used to cover the projected SAR 101 billion ($26.8 billion) budget deficit for 2025, as well as repay SAR 38 billion ($10 billion) in principal debt obligations due this year.

The National Debt Management Center (NDMC) announced on Tuesday that the issuance includes three tranches: $5 billion in three-year bonds, $3 billion in six-year bonds, and $4 billion in ten-year bonds. Total demand for the bonds reached $37 billion, exceeding the issuance size by three times and reflecting robust investor interest.

The NDMC emphasized that this issuance aligns with its strategy to broaden the investor base and efficiently meet Saudi Arabia’s financing needs in global debt markets.

According to IFR, a fixed-income news service, the initial price guidance for the three-year bonds was set at 120 basis points above US Treasury yields. The six-year and ten-year bonds were priced at 130 and 140 basis points above the same benchmark, respectively.

Strong demand allowed Saudi Arabia to lower yields on the shorter-term bonds, further demonstrating investor confidence. Economists noted that the pricing above US Treasuries is attractive in the current market, showcasing trust in Saudi Arabia’s economic stability and financial strategies.

International confidence

Economic experts view this successful bond issuance as a testament to international confidence in Saudi Arabia’s robust economy and financial reforms. Dr. Mohammed Al-Qahtani, an economics professor at King Faisal University, said the move underscores Saudi Arabia’s commitment to diversifying financing tools both domestically and internationally. He added that the funds would support Vision 2030 projects, reduce pressure on domestic resources, and attract strong international investor interest.

The issuance strengthens Saudi Arabia’s ability to meet financial needs, expand its investor base, and establish a global financing network, he said, noting that it also facilitates entry into new markets, enabling the Kingdom to accelerate infrastructure projects and capital expenditures.

Dr. Ihsan Buhulaiga, founder of Joatha Business Development Consultants, described the 2025 budget as expansionary, aimed at meeting the financing needs of economic diversification programs. He stressed that the budget deficit is an “optional” one, reflecting a deliberate choice to prioritize Vision 2030 initiatives over immediate fiscal balance.

Buhulaiga explained that the Kingdom’s approach balances two options: limiting spending to available revenues, which would avoid deficits but delay Vision 2030 initiatives, or borrowing strategically to fund Vision 2030 goals. He said that the annual budget is just a component of the larger vision, which requires sustained funding until 2030.

He continued that Saudi Arabia’s fiscal space and creditworthiness allow it to borrow internationally at competitive rates, explaining that this flexibility ensures financial sustainability without compromising stability, even during challenges like the COVID-19 pandemic.

Saudi Arabia’s debt portfolio remains balanced, with two-thirds of its debt domestic and one-third external. As of Q3 2024, public debt stood at approximately SAR 1.2 trillion, below the 30% GDP ceiling. According to the Ministry of Finance, the budget deficit is expected to persist through 2027 but remain below 3% of GDP.

Buhulaiga highlighted the importance of capital expenditure, which reached SAR 186 billion in 2023 and is projected to rise to SAR 198 billion in 2024, a 6.5% increase.

He emphasized the government’s pivotal role in economic diversification, supported by investments from the Public Investment Fund (PIF), the National Development Fund, and its subsidiaries, including the Infrastructure Fund.

The PIF recently announced a $7 billion Murabaha credit facility, facilitated by Citigroup, Goldman Sachs International, and JPMorgan. Meanwhile, the NDMC arranged a $2.5 billion revolving credit facility earlier in January, compliant with Islamic principles, to address budgetary needs.

In November, Moody’s upgraded Saudi Arabia’s credit rating to Aa3, aligning with Fitch’s A+ rating, both with a stable outlook. S&P Global assigns the Kingdom an AA-1 rating with a positive outlook, reflecting a high ability to meet financial obligations with low credit risk.

The IMF estimates Saudi Arabia’s public debt-to-GDP ratio at 26.2% in 2024, describing it as low and sustainable. This is projected to rise to 35% by 2029 as foreign borrowing continues to play a key role in financing deficits.