Data Centers Open New Avenue for Localizing Saudi Cooling Industry

Nabil Shahin discusses standards developed by the US-based Air-Conditioning, Heating, and Refrigeration Institute (AHRI). (LinkedIn) 
Nabil Shahin discusses standards developed by the US-based Air-Conditioning, Heating, and Refrigeration Institute (AHRI). (LinkedIn) 
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Data Centers Open New Avenue for Localizing Saudi Cooling Industry

Nabil Shahin discusses standards developed by the US-based Air-Conditioning, Heating, and Refrigeration Institute (AHRI). (LinkedIn) 
Nabil Shahin discusses standards developed by the US-based Air-Conditioning, Heating, and Refrigeration Institute (AHRI). (LinkedIn) 

From buildings and megaprojects to data centers, demand for air-conditioning and cooling solutions is expanding across Saudi Arabia, driven by rapid construction and accelerating investment in digital infrastructure.

As artificial intelligence and cloud computing enter a period of rapid expansion, data centers are emerging as a new growth driver for the cooling industry, requiring advanced levels of efficiency and reliability and equipment capable of operating under harsh climatic conditions.

The boom extends beyond Saudi Arabia. Globally, the cooling industry is expanding as temperatures rise and demand for data centers grows. The International Energy Agency estimates that global electricity demand for building cooling has risen by about 50% since 2015 to around 2,900 terawatt-hours, while worldwide air-conditioner shipments reached about 200 million units in 2024.

Cooling buildings is placing increasing pressure on power grids, particularly during heat waves, while data centers and AI are adding another layer of demand for advanced cooling technologies.

Global data-center electricity consumption stood at around 415 TWh in 2024 and is projected to reach about 945 TWh by 2030, with cooling and environmental-control systems accounting for a significant share of energy use at these facilities.

The growth comes amid mounting pressure to improve air-conditioning efficiency and reduce its environmental impact. According to the UN Environment Program, global cooling demand could more than triple from current levels by 2050 under existing policies, making equipment efficiency and less energy-intensive technologies increasingly important.

These shifts offer Saudi Arabia an opportunity to expand its domestic air-conditioning and cooling manufacturing base as the Kingdom seeks to increase local content and meet more of its market needs through domestic production.

Nabil Shahin, managing director of the Middle East and North Africa office of the US-based Air-Conditioning, Heating, and Refrigeration Institute (AHRI), told Asharq Al-Awsat that Saudi Arabia accounts for more than half of the Gulf air-conditioning market. He attributed the market’s growth to expanding commercial and construction projects, alongside the boom in data centers.

Data Centers Reshape Cooling Market

The Kingdom is experiencing a “growth boom” in data centers, according to the AHRI executive, fueled by the rapid spread of AI and rising demand for cloud-computing services. He noted that several US and European companies are developing data-center projects in Saudi Arabia.

As their cooling requirements increase, AHRI is working with the Saudi Standards, Metrology and Quality Organization (SASO) to develop and modify standards for data-center equipment to reflect the Kingdom’s temperatures, climatic conditions and local requirements.

Saudi Standard for Evaporative Coolers

Shahin noted that SASO had asked AHRI to develop a new standard for evaporative cooling systems, locally known as “desert coolers,” which use water in the cooling process rather than the refrigerants used in conventional air-conditioning systems.

There is currently no unified global standard for such systems, he explained. AHRI is developing the standard for submission to SASO, with the aim of providing a reference for manufacturers in the Saudi market.

The new standard will include energy-efficiency measurement criteria to assess equipment performance and suitability for local conditions.

Improving air-conditioning efficiency is particularly important in Saudi Arabia because of the sector’s high electricity consumption. More efficient systems could reduce power demand and emissions associated with electricity generation.

Saudi Arabia Leads Gulf Market

The AHRI executive estimated Saudi Arabia’s share of the Gulf air-conditioning market at more than 50%, with demand continuing to rise alongside commercial and construction projects, particularly in Riyadh, coastal areas and Makkah.

Some estimates put the Kingdom’s share at about 60%, he noted, but he prefers the more conservative figure of over 50% because no verified official data precisely establish its market share.

The scale of demand has made Saudi Arabia attractive to international companies, several of which have expanded their presence over the past two years by establishing new factories or enlarging existing facilities.

Local manufacturing can give companies an additional advantage by reducing some import costs, which can range from 5% to 12%, according to Shahin. He pointed to three large domestic factories that are expanding their operations.

From Assembly to Component Manufacturing

Localization, however, still faces the challenge of dependence on imported components. Most key air-conditioning components — including electric motors, compressors, copper and refrigerants — continue to come from abroad.

Much of Saudi Arabia’s current manufacturing activity remains focused on assembly, although some components, including heat exchangers, are produced domestically.

The next step, the AHRI official argued, is to move gradually from assembly toward manufacturing a greater proportion of air-conditioning components in the Kingdom, including electronics, circuit boards and electric motors.

He called for additional government incentives and support, including land, industrial space, free zones and investment facilities, to help Saudi factories expand and increase the share of locally manufactured components.

 

 



Saudi Minister Says AIIB Success Measured by Development Impact, Not Financing

Saudi Finance Minister Mohammed al-Jadaan at the 11th annual meeting of the Asian Infrastructure Investment Bank’s Board of Governors (X)
Saudi Finance Minister Mohammed al-Jadaan at the 11th annual meeting of the Asian Infrastructure Investment Bank’s Board of Governors (X)
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Saudi Minister Says AIIB Success Measured by Development Impact, Not Financing

Saudi Finance Minister Mohammed al-Jadaan at the 11th annual meeting of the Asian Infrastructure Investment Bank’s Board of Governors (X)
Saudi Finance Minister Mohammed al-Jadaan at the 11th annual meeting of the Asian Infrastructure Investment Bank’s Board of Governors (X)

Saudi Finance Minister Mohammed al-Jadaan urged the Asian Infrastructure Investment Bank to judge its success by the impact of its projects, saying financing volumes and approvals alone do not show whether the bank is improving services, strengthening institutions, or building economic resilience.

Speaking at the 11th annual meeting of the bank’s Board of Governors, which concluded on Tuesday in Doha, al-Jadaan said the AIIB had built strong foundations in its early years.

Progress on regional connectivity, cooperation and private-sector participation had strengthened its ability to meet member countries’ infrastructure needs, he said.

As the bank expands, progress “should not be measured by financing volumes or project approvals alone, but by development impact,” he said.

Success should mean “better infrastructure services, stronger institutions, greater economic resilience and broader private-sector participation,” al-Jadaan said, as the bank enters its second decade and seeks to expand infrastructure financing and mobilize more private capital.

He called for earlier engagement with member countries to better understand their circumstances, infrastructure gaps and priorities, and for multiyear programs aligned with national strategies.

Al-Jadaan also urged the bank to broaden partnerships with multilateral development banks and international organizations to share expertise, avoid duplicating efforts and mobilize more public and private resources.

He said the bank should remain guided by member countries’ needs, taking account of differences in institutional capacity, fiscal space and levels of infrastructure development.

The Doha meeting, held under the theme “Future Infrastructure: Impact and Innovation,” comes as the bank prepares for a new phase of expansion.

The AIIB has said it aims to nearly double annual financing to about $20 billion by 2030, focusing on infrastructure linked to climate resilience, renewable energy, digital transformation and regional connectivity, while mobilizing more private capital.

Saudi Arabia is a founding member of the AIIB, a multilateral development finance institution established in Beijing in 2016.


African Leaders to Gather in Egypt for Business Summit

Friday's forum is expected to bring together more than 20 heads of state and government representatives in the Mediterranean city of Alamein, alongside business leaders, bankers and development institutions. © KHALED DESOUKI / AFP/File
Friday's forum is expected to bring together more than 20 heads of state and government representatives in the Mediterranean city of Alamein, alongside business leaders, bankers and development institutions. © KHALED DESOUKI / AFP/File
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African Leaders to Gather in Egypt for Business Summit

Friday's forum is expected to bring together more than 20 heads of state and government representatives in the Mediterranean city of Alamein, alongside business leaders, bankers and development institutions. © KHALED DESOUKI / AFP/File
Friday's forum is expected to bring together more than 20 heads of state and government representatives in the Mediterranean city of Alamein, alongside business leaders, bankers and development institutions. © KHALED DESOUKI / AFP/File

African leaders will meet in Egypt on Friday for a business summit that Cairo hopes will bolster its clout across the continent.

Friday's forum is expected to bring together more than 20 heads of state and government representatives in the Mediterranean city of Alamein, alongside business leaders, bankers and development institutions.

"This is an African platform," Egypt's deputy foreign minister for African affairs Mohamed Abu Bakr Saleh told AFP.

"A country in East Africa should be able to sign an agreement with a country in West, North or southern Africa through this platform."

Saleh said the forum would become a biennial event under an African Union mandate, focusing on infrastructure, trade, agriculture, healthcare, mining, technology and renewable energy.

Officials estimate Egyptian investments across Africa at around $14 billion. Among Egypt's flagship ventures is Tanzania's $3 billion Julius Nyerere Hydropower Project, built by a consortium led by Egyptian companies.

Yet trade within Africa remains limited, totalling just $192 billion in 2023 and only accounting for around 15 percent of the continent's total trade, compared with more than 55 percent in Asia and over 70 percent in Europe.

Africa also attracted about $70 billion in foreign direct investment in 2025, a fraction of the roughly $1.6 trillion invested globally, according to the UN.

"Africa possesses vast resources, but they are still not being exploited to the level we would like to see," Saleh said.

The gathering also takes place against the backdrop of an unresolved dispute between Egypt and Ethiopia over the $5 billion GERD, Africa's largest hydroelectric project.

Ethiopia says the dam, inaugurated last year, is vital for economic growth, while Egypt says it could threaten Nile water supplies without a binding operating agreement.

More than a decade of negotiations have failed to yield a settlement.

"Our position on Egypt's water security has not changed and will not change," Saleh said. "It is an existential issue for Egypt."


US Ban on $1 Billion Worth of Canadian Imports Goes into Effect

Shipping containers in the Port of Montreal, Canada (Reuters)
Shipping containers in the Port of Montreal, Canada (Reuters)
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US Ban on $1 Billion Worth of Canadian Imports Goes into Effect

Shipping containers in the Port of Montreal, Canada (Reuters)
Shipping containers in the Port of Montreal, Canada (Reuters)

US-Canada relations, already tense, are likely to deteriorate further after the United States went ahead early Tuesday with a decision to ban nearly $1 billion worth of Canadian imports, including dairy products and motorcycles.

The ban amounts to barely a ripple in $880 billion worth of a two-way annual trade between the two northern neighbors. But it marks another ratcheting up of President Donald Trump’s second-term trade war with America’s longtime ally and trading partner.

The import ban “certainly won't do anything to help the trade tensions between the United States and Canada,'' said trade attorney Patrick Childress, a partner at Holland & Knight and a former US trade official.

The latest sparring began over the summer when Trump reached back to a Great Depression law to impose 50% tariffs on about $20 billion worth of Canadian imports, charging that Canada discriminates against US dairy and auto producers. Canada promptly counterpunched with tariffs of 15% and 25%, matching US imports dollar for dollar.

To punish Canada for retaliating against his tariffs, Trump decided to ban a list of Canadian products, effective 12:01 a.m. Eastern time Tuesday.

The economic impact is likely to be minimal. Childress noted that the products on the banned list were already facing Trump’s tariffs. “For a lot of these goods, the 50% was already acting as a de facto ban by making importation from Canada into the United States uneconomical,″ he said.

Jacob Jensen, director of trade policy at the center-right American Action Forum think tank, calculates that the ban would cover $967 million worth of Canadian imports, based on 2025 numbers.

“This marks yet another escalation in the trade war that may result in further retaliation on the Canadian side,” Jensen said. He expects Canadian exporters and US importers “impacted by these bans will be highly motivated’’ to demand that trade officials on both sides find some way to reach a “resolution of this whole ordeal.’’