Turkish Finance Minister Sees Single-Digit Inflation by Mid-2023

 A market in the Turkish capital, Ankara. (Reuters)
A market in the Turkish capital, Ankara. (Reuters)
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Turkish Finance Minister Sees Single-Digit Inflation by Mid-2023

 A market in the Turkish capital, Ankara. (Reuters)
A market in the Turkish capital, Ankara. (Reuters)

Turkey’s annual inflation rate will be in single digits by the time presidential and parliamentary elections set for mid-2023 are held, Finance Minister Nureddin Nebati said on Saturday.

“With fiscal policies and the steps that we will take, we will enter the elections... next year with single-digit inflation,” Nebati said.

Inflation hit a 19-year high of 36% in December after the central bank slashed interest rates under pressure from President Recep Tayyip Erdogan, causing a currency crisis that led to the lira shedding 44% of its value in 2021.

Speaking to heads of non-governmental organizations in Istanbul, Nebati said the conversion of forex holdings to Turkish lira will accelerate in coming weeks.

Meanwhile, the central bank delayed implementation of a fee for US dollar and euro accounts at banks that cannot encourage customers to turn to lira, according to a document sent to banks.

Last month, the central bank said a 1.5% commission will be imposed on foreign currency required reserves accounts of banks if they did not reach certain thresholds on conversion to lira.

The move was seen as a punishment for banks whose customers choose to keep savings in foreign currencies.

More than half of locals’ savings is in foreign currencies and gold, according to central bank data, due to a loss of confidence in the lira after years of depreciation.

The lira fell more than 40% against hard currencies last year alone.

The currency had slumped to a record low of 18.40 in to the dollar in December before the government and central bank announced steps to protect lira deposits from foreign exchange depreciation.



GCCIA CEO: Wafrah Station is Hub of Electrical Connectivity with Neighboring Countries

Gulf Electrical Interconnection Project model (KUNA)
Gulf Electrical Interconnection Project model (KUNA)
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GCCIA CEO: Wafrah Station is Hub of Electrical Connectivity with Neighboring Countries

Gulf Electrical Interconnection Project model (KUNA)
Gulf Electrical Interconnection Project model (KUNA)

Kuwait's al-Wafrah station is the hub for connecting neighboring countries with the future expansion of the interconnection network, said the CEO of GCC Interconnection Authority (GCCIA), Ahmed al-Ebrahim.

Ebrahim said that the Authority, in cooperation with specialists from the Kuwaiti Ministry of Electricity and Renewable Energy, has conducted technical and economic studies to harness the full potential of grid interconnectivity.

He added that the technical studies confirmed the need to build a new station compatible with the technical specifications of the stations of the Kuwait network at a voltage of 400 kilovolts.

The official noted that the economic goals of establishing the Wafrah station include saving installed capacity, especially with the increased summer electrical loads, and boosting interconnection to pass a larger capacity in support of emergencies to member states.

It also provides more significant opportunities for energy exchange by increasing the electrical interconnection capacity to achieve economical operation, increase the network's security and stability, and enable the integration of renewable energy and maximum utilization.

The CEO explained that the project consists of constructing a 400 kV substation in al-Wafra and constructing double-circuit overhead lines to connect the station with the al-Fadhili station in Saudi Arabia, with a length of approximately 300 km.

The project includes expanding the Fadhili station by adding electrical circuit breakers with a voltage of 400 kV to connect with the Wafra station. It also includes 400KV antennas to 3Z and 4Z stations to link with Kuwait Network.

Ebrahim noted that the project will take 24 months and will be completed at the end of December 2024.

The Authority was established based on the Unified Economic Agreement between the Gulf states, which was approved by the leaders in their second session in 1981, to link the networks of the GCC states, said Ebrahim.

He indicated that the Gulf Interconnection Project is an essential infrastructure linking project, achieving its most important strategic goals in enhancing energy security and raising Gulf electric systems' reliability and safety.

The Interconnection Project was implemented in three phases and consisted of the following principal elements: the interconnection of the Northern Systems in Kuwait, Saudi Arabia, Bahrain, and Qatar, completed in early 2009.

The second phase comprised the internal interconnection of the Southern Systems, including UAE and Oman, to form the UAE National Grid and the Oman Northern Grid, and the last phase, in 2010, interconnected the Northern and Southern Systems.

The Authority's CEO explained that the interconnection objectives include enhancing the security of electric power and achieving economic savings resulting from the possibility of each country benefiting from the reserves of other GCC countries to help reduce their stockpiles.

The benefits also extend to saving the cost of building new power stations, thus reducing operating and maintenance expenses, reducing carbon emissions, and activating and developing electric energy trading markets.


Emirates Says to Make Purchase Order of 150 Jets

An Emirates plane at Dubai International Airport. (Asharq Al-Awsat)
An Emirates plane at Dubai International Airport. (Asharq Al-Awsat)
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Emirates Says to Make Purchase Order of 150 Jets

An Emirates plane at Dubai International Airport. (Asharq Al-Awsat)
An Emirates plane at Dubai International Airport. (Asharq Al-Awsat)

Emirates is close to a substantial aircraft order of as many as 100 to 150 jets as it prepares to replace its fleet of Airbus SE A380 double-decker planes, due to come offline early next decade.

The airline is “close to doing something that will involve buying more Airbus A350s and Boeing Co. 777s,” and “maybe also Boeing’s smaller 787 Dreamliner,” Emirates President Tim Clark said in an interview with Bloomberg TV in Istanbul at the IATA annual general meeting on Tuesday.

“We will be making orders fairly soon,” Clark said. The airline will seek to place the orders for delivery starting 2027 through 2033, with the A380 planes exiting operation in 2032. “It could come next week, it could come at the Dubai Air Show,” he said.

Clark said demand for flying is the strongest it’s been in a long time, with the possibility of some “tapering toward the middle of next year.”

In parallel, IATA boosted its industry profit forecast to $9.8 billion from $4.7 billion cheered by strong travel demand and an easing in oil prices. Revenue is expected to grow to $803 billion, inching closer to 2019's pre-pandemic level of $838 billion.

“The pandemic years are behind us, and borders are open as normal,” said the director general of the International Air Transport Association William Walsh.

“Margins are, however, wafer thin,” he added.

Emirates Group reported a record profit during FY 2022-2023 of 10.9 billion dirhams ($2.96 billion), compared with a 3.8 billion dirhams ($ 1.1 billion) loss in the previous year. The Group’s revenue recorded in the FY ending March an increase of 81% to 119.8 billion dirhams ($32.6 billion).


Saudi Arabia, Latvia Sign MoU to Promote Trade, Joint Investment

The signing ceremonies were held during the Saudi-Latvian Business Forum, which was organized by the FSC - SPA
The signing ceremonies were held during the Saudi-Latvian Business Forum, which was organized by the FSC - SPA
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Saudi Arabia, Latvia Sign MoU to Promote Trade, Joint Investment

The signing ceremonies were held during the Saudi-Latvian Business Forum, which was organized by the FSC - SPA
The signing ceremonies were held during the Saudi-Latvian Business Forum, which was organized by the FSC - SPA

The Federation of Saudi Chambers (FSC) and the Investment and Development Agency of Latvia (LIAA) have signed a memorandum of understanding (MoU) to promote trade and investment between the Kingdom of Saudi Arabia and the Republic of Latvia.

The signing ceremonies were held during the Saudi-Latvian Business Forum, which was organized by the FSC.

The event was headed by the member of the FSCs' Board of Directors and Chairman of Al Ahsa Chamber Abdulaziz Saleh Al Mousa, and Minister for Economics of the Republic of Latvia Ilze Indriksone, with the participation of 20 Latvian companies and several government agencies and Saudi business owners.

The forum highlighted the opportunities available to Latvian companies in Vision 2030 projects, the Saudi market, business environment, and opportunities in Latvia, and prospects for cooperation between the business sectors of the two countries, especially in the sectors of logistics, construction, information and communication technology, digitization, and the food, pharmaceutical, and medical industries.


Egypt, UAE Sign Deal to Produce Electricity with $10b Worth of Investments

A microbus passes between giant blades to generate electricity with the wind in the Egyptian Red Sea Governorate. (Reuters) 
A microbus passes between giant blades to generate electricity with the wind in the Egyptian Red Sea Governorate. (Reuters) 
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Egypt, UAE Sign Deal to Produce Electricity with $10b Worth of Investments

A microbus passes between giant blades to generate electricity with the wind in the Egyptian Red Sea Governorate. (Reuters) 
A microbus passes between giant blades to generate electricity with the wind in the Egyptian Red Sea Governorate. (Reuters) 

Egypt and the UAE signed a deal Tuesday for a wind energy project to produce electricity, with direct investments of more than $10 billion.

Middle East News Agency reported that Egyptian Prime Minister Mostafa Madbouly and Emirati Minister of Industry and Advanced Technology Sultan Al Jaber attended the signing of the project.

The project has a production capacity of 10 gigawatts.

It will be developed by a consortium led by Masdar and including Infinity Power and Hassan Allam Utilities.

CEO of Masdar Mohammed Al-Ramahi said during a press conference broadcast by the Egyptian state channel, that the project would bring direct investments of more than $10 billion and would save $5 billion worth of gas used annually to generate electricity.

Ramahi added that fossil fuel would contribute to providing energy sources, noting that renewable energy transmission needs decades.

This transmission would occur in phases to ensure energy security and the economic feasibility of using the energy sources within a diverse portfolio that protects the environment, he added.

This agreement is part of the MoU signed between the two countries during COP27 which was held in Sharm Sheikh in November.


Investment Worth SAR21 Bln to Rapidly Develop Workforce Residential Communities at NEOM

NEOM announced that it has finalized contracts with investors for the first phase of its residential communities’ expansion. (SPA)
NEOM announced that it has finalized contracts with investors for the first phase of its residential communities’ expansion. (SPA)
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Investment Worth SAR21 Bln to Rapidly Develop Workforce Residential Communities at NEOM

NEOM announced that it has finalized contracts with investors for the first phase of its residential communities’ expansion. (SPA)
NEOM announced that it has finalized contracts with investors for the first phase of its residential communities’ expansion. (SPA)

NEOM announced on Tuesday that it has finalized contracts with investors for the first phase of its residential communities’ expansion, a social infrastructure project that will house the region’s growing workforce. The agreement amounts to a total value of over SAR 21 billion, making it one of the largest international public-private partnerships for accommodation.

The preferred bidders for the first phase of the residential communities consist of leading Saudi Arabian companies, Alfanar Global Development, Almutlaq Real Estate Investment Company (AREIC), Nesma holding Co., and Tamasuk involved via two separate partners: Al Majal Al Arabi Group Company and the Saudi Arabian Trading and Construction Company (SATCO).

Chief Executive Officer at NEOM Nadhmi Al-Nasr said: “NEOM has selected some of the leading companies in the Kingdom of Saudi Arabia as partners in delivering and operating temporary communities with world-leading services and infrastructure. The newly formed partnerships mark an important milestone for the region and is a testament to the capabilities of our team and partners who rapidly achieved financial close on a record amount.”

The agreement paves the way for more private sector participation in the development of NEOM’s infrastructure. The second phase of the temporary residential project is expected to be issued to the market in the coming months. In addition to contract awards, NEOM is reviewing interest from investors with plans to shortlist pre-qualified participants from now.

One of the strategic ambitions for the giga-project has been to attract additional investors to be part of the vision and become an active steward of NEOM’s commercial assets. The multi-billion-riyal investment is further proof of the scale of the project for Saudi Arabia. It will also have a direct economic impact on the region, helping to develop local competency, advance the use of sustainable solutions in construction, and allow for local job creation.

Several of NEOM’s core developments are ramping up, including THE LINE, Trojena, Oxagon, and Sindalah, as infrastructure unfolds across the vast region. This latest public-private partnership is a vital step in bringing larger plans online to their agreed timescales. The scope for this agreement will cover elements of design, finance, build, operations, and maintenance of the housing communities.

Vice Chairman of Alfanar Sabah Al Mutlaq said: “We are elated to partner with NEOM on this multi-nodal infrastructure project, and to contribute to NEOM’s vision of disrupting the conventional approach to urban living. This is in line with our commitment to deliver high-quality solutions in a sustainable manner."

Chairman of Tamasuk Mohammed Al Balwi said: “We are immensely proud to be NEOM’s infrastructure partners. Together with Almajal and SATCO, we are committed to delivering the infrastructure that will facilitate the wider and rapid development of NEOM.”

President of Nesma Co. Faisal Al Turki said: “We look forward to working with the teams at all levels for the realization of this project and the wider NEOM vision.”

Chairman of AREIC Tariq al Mutlaq said: “We are delighted to witness the growth of the compelling region of NEOM. The rapid development of their initiatives that support the Saudi Vision 2030 are in line with our mission for the sustainable development of the Kingdom.”

The agreement will see an additional 10 communities established across NEOM, adding capacity for 95,000 more occupants once the first phase of the project is completed. The temporary accommodations, needed during the construction period of NEOM, are built sustainably as relocatable modular units which can be repurposed once the communities are no longer needed.

Additional to essential services, communities will also include a wide range of lifestyle facilities, such as multi-purpose sports fields, cricket ovals, tennis courts, volleyball courts, basketball courts, swimming pools and entertainment venues.


World Bank Cuts 2024 Global Growth Forecast as Rate Hikes Bite but Lifts 2023 Outlook

An employee (R) cuts fruit as shoppers visit a market in Tokyo on June 6, 2023. (AFP)
An employee (R) cuts fruit as shoppers visit a market in Tokyo on June 6, 2023. (AFP)
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World Bank Cuts 2024 Global Growth Forecast as Rate Hikes Bite but Lifts 2023 Outlook

An employee (R) cuts fruit as shoppers visit a market in Tokyo on June 6, 2023. (AFP)
An employee (R) cuts fruit as shoppers visit a market in Tokyo on June 6, 2023. (AFP)

The World Bank on Tuesday raised its 2023 global growth outlook as the US, China and other major economies have proven more resilient than forecast, but said higher interest rates and tighter credit will take a bigger toll on next year's results.

Real global GDP is set to climb 2.1% this year, the World Bank said in its latest Global Economic Prospects report. That's up from a 1.7% forecast issued in January but well below the 2022 growth rate of 3.1%.

The development lender cut its 2024 global growth forecast to 2.4% from 2.7% in January, citing the lagged effects of central bank monetary tightening and more restrictive credit conditions that were reducing business and residential investment.

These factors will slow growth further in the second half of 2023 and into 2024, but the bank released a new 2025 global growth forecast of 3.0%.

World Bank Chief Economist Indermit Gill put a gloomy spin on the new forecasts, saying that 2023 would still mark one of the slowest growth years for advanced economies in the last five decades.

Two thirds of developing economies will see lower growth than in 2022, dealing a major setback to pandemic recovery and poverty reduction and increasing sovereign debt distress, he added.

"Even by the end of next year, a third of the developing world will not beat the per-capita income levels that they had at the end of 2019," Gill told reporters. "That's five lost years for nearly a third of the world's countries."

In January, the World Bank had warned that global GDP was slowing to the brink of recession, but since then, strength in the labor market and consumption in the U.S. had exceeded expectations as has China's recovery from COVID-19 lockdowns.

US growth for 2023 is now forecast at 1.1%, more than double the 0.5% forecast in January, while China's growth is expected to climb to 5.6%, compared to a 4.3% forecast in January after COVID-reduced growth of 3% in 2022.

The bank, however, halved its previous 2024 US growth forecast to 0.8%, and cut China's forecast by 0.4 percentage point to 4.6%.

The euro zone got a forecast increase to 0.4% growth for 2023 from a flat outlook in January, but the forecast for next year was also cut slightly.

Recent banking sector stress is also contributing to tighter financial conditions that will continue into 2024, the lender said.

It cited one potential downside scenario where banking stress results in a severe credit crunch and broader financial market stress in advanced economies. This would likely cut 2024 growth by nearly half to just 1.3% - the slowest pace in 30 years outside of the 2009 and 2020 recessions.

"In another scenario where financial stress propagates globally to a far greater degree, the world economy would fall into recession in 2024," the bank added.

The bank said inflation is expected to gradually edge down as growth decelerates and labor demand in many economies softens and commodity prices remain stable. But it added that core inflation is expected to remain above central bank targets in many countries throughout 2024.


Saudi Efforts to Protect Oil Producers from Shrinking Global Economic Growth

An Aramco facility (Asharq Al-Awsat)
An Aramco facility (Asharq Al-Awsat)
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Saudi Efforts to Protect Oil Producers from Shrinking Global Economic Growth

An Aramco facility (Asharq Al-Awsat)
An Aramco facility (Asharq Al-Awsat)

The Saudi government's voluntarily reducing its output to nine million barrels per day (bpd) represents significant to support the global market and protect producers and consumers, economic analysts told Asharq Al-Awsat.

The experts emphasized the importance of a unified OPEC+ decision and the voluntary production decline in line with the capabilities of many oil-producing countries.

- Market protection

Advisor and international law professor Osama al-Obaidi told Asharq Al-Awsat that the decision of the OPEC+ group seeks to protect price stability from severe fluctuations that harm producers and consumers alike.

Obaidi said the decision limits the contraction of global economic growth, noting that the extreme price fluctuation leads to a decline in oil production efficiency and consumption.

The expert noted that OPEC+ countries needed to defend their market share and achieve stability.

- Global Economy

Obaidi said that the OPEC+ policy, led by Saudi Arabia, balanced international markets and enhanced the stability of the global economy.

Saudi Arabia's efforts are essential to eliminate extreme fluctuations in the oil market to prevent a decline in global demand and support market stability and balance, said Obaidi.

He indicated that the Kingdom, with its voluntary reduction with the member states of OPEC+, succeeded in reducing price fluctuations and ensured the availability of sufficient supplies to global markets.

- Distributive justice

Economist Fahd bin Jumaa noted that appointing impartial bodies to monitor OPEC+ production is an advanced and unprecedented step that achieves fair distribution of production lines and determines the reduction transparently.

Bin Juma told Asharq Al-Awsat that Saudi Arabia's reduction of its production by one million bpd starting next July confirms the correct outlook for global markets to maintain oil stability.

- Precautionary efforts

An official source in the Saudi Ministry of Energy said that after the OPEC+ meeting, the Kingdom would implement an additional voluntary cut in its crude oil production, amounting to one million bpd, starting in July for a month that can be extended.

The Saudi production will become nine million bpd, and the Kingdom's total voluntary cut will be 1.5 million bpd.

The source explained that the Kingdom's additional voluntary cut reinforces the precautionary efforts made by OPEC Plus countries to support the stability and balance of oil markets.

In addition to extending the existing OPEC+ cuts of 3.66 million bpd, the group also agreed to reduce overall production targets from January 2024 by a further 1.4 million bpd versus current targets to a combined 40.46 million bpd.


Global Investment Requests for Saudi Industrial Cities Soar

The signing ceremony for the establishment and development of 72 factories in Riyadh, Saudi Arabia (Asharq Al-Awsat)
The signing ceremony for the establishment and development of 72 factories in Riyadh, Saudi Arabia (Asharq Al-Awsat)
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Global Investment Requests for Saudi Industrial Cities Soar

The signing ceremony for the establishment and development of 72 factories in Riyadh, Saudi Arabia (Asharq Al-Awsat)
The signing ceremony for the establishment and development of 72 factories in Riyadh, Saudi Arabia (Asharq Al-Awsat)

The Executive Vice President of Business Development of the Saudi Authority for Industrial Cities and Technology Zones (MODON) Eng. Ali Al Omeir revealed the presence of global requests to enter the industrial cities.

Omeir emphasized the significant efforts made by Saudi Arabia’s industrial system to attract international investments through participation, direct communication, and targeting global events.

In an interview with Asharq Al-Awsat, Omeir said that MODON has successfully attracted domestic and foreign investments amounting to a cumulative investment of over SAR 405 billion ($108 billion).

The number of operational factories in the Kingdom reached 5,926, along with 290 logistical facilities, contributing significantly to diversifying the national income sources and achieving the goals of Saudi Vision 2030 and the National Industrial Strategy.

These achievements are aimed at establishing a sustainable industrial economy and an attractive investment environment.

“Spread across all regions of the Kingdom, there are 36 industrial cities with developed areas exceeding 198 million square meters. The total number of contracts within these cities reached 7,242, encompassing industrial, logistical, and investment sectors,” revealed Omeir.

Moreover, he clarified that MODON is simultaneously working on encouraging the private sector to contribute to the establishment, development, management, operation, and maintenance of industrial cities.

Omeir also stated that there is an intention to expand in establishing industrial cities in the Kingdom.

He pointed out that the existing industrial cities are partially developed, with continuous development based on market needs.

“Today, we can identify the cities that require further development, and in line with the market and its demands, we are working on developing this infrastructure,” added Omeir.

Omeir’s remarks came following MODON inaugurating 98 ready-made factories worth SAR 100 million ($26.6 million).

Regarding the inauguration of the new factories, Omeir stated that it marks a new phase of expansion in the partnership between the public and private sectors.

This is exemplified by the launch of the “Producers 3” project in the third industrial zone in Jeddah, consisting of 98 factories spanning over an area exceeding 92,000 square meters.

The launch of the factories highlighted the importance of building conscious partnerships that contribute to achieving MODON’s objectives.


IMF Urges Kuwait to Regulate its Public Finances, Impose Taxes

A worker fills fuel at a station in Kuwait (KUNA)
A worker fills fuel at a station in Kuwait (KUNA)
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IMF Urges Kuwait to Regulate its Public Finances, Impose Taxes

A worker fills fuel at a station in Kuwait (KUNA)
A worker fills fuel at a station in Kuwait (KUNA)

The International Monetary Fund (IMF) on Monday urged Kuwait to regulate the country’s public finances and to gradually phase out large energy subsidies to reduce current spending.

In a staff concluding statement of the 2023 Article IV Mission, the IMF said substantial fiscal consolidation based on both expenditure and non-oil revenue measures will be needed in Kuwait.

“To reduce current spending, it is critical to rationalize the public sector wage bill, as well as to gradually phase out large energy subsidies while replacing them with targeted income support to vulnerable households,” the Fund said.

Also, in order to raise non-oil revenue, a 5 percent value-added tax should be introduced, while excises on tobacco and sugary drinks should be levied, as agreed with other GCC countries in 2015-16.

However, the IMF affirmed that Kuwait’s economic recovery continues thanks to the high oil production and prices and that inflation has been contained, while the fiscal and external balances have strengthened, and financial stability has been maintained.

“Inflation has been contained, given limited pass-through from higher global food and energy prices due to administered prices and subsidies, as well as monetary policy tightening broadly,” the statement noted.

Meanwhile, the Fund revealed that Kuwait’s economy has largely recovered from the pandemic.

“Growth is estimated to have surged to 8.2 percent in 2022, up from 1.3 percent in 2021, primarily driven by high oil production and prices,” it stated.

Despite the figures, the IMF predicted that in 2023, growth is projected to fall to 0.1 percent, reflecting agreed OPEC+ oil production cuts and slower external demand growth.

In October, OPEC+ agreed steep oil production cuts, curbing supply of 2 million barrels per day of output until the end of 2023.

The influential Organization of the Petroleum Exporting Countries also met last Sunday in Vienna and announced in a statement that it will limit combined oil production to 40.463 million barrels per day over January-December 2024.

On Monday, Kuwait said it will continue its voluntary oil output reduction by 128,000 bpd until the end of 2024.

Concerning Kuwait’s non-oil growth, the IMF said on Monday that it is projected to remain robust at 3.8 percent, due to fiscal stimulus and a partial rebound in expatriate employment, despite slower real credit growth.

Non-oil growth had risen to a brisk 4.0 percent in 2022, up from 3.4 percent in 2021, reflecting strong domestic demand.

 


Standard Chartered Issues First-Ever Green Guarantee in Saudi Arabia

Officials from Standard Chartered and Larsen and Toubro during the announcement of the issuance of the first-ever green guarantee in Saudi Arabia. (Asharq Al-Awsat)
Officials from Standard Chartered and Larsen and Toubro during the announcement of the issuance of the first-ever green guarantee in Saudi Arabia. (Asharq Al-Awsat)
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Standard Chartered Issues First-Ever Green Guarantee in Saudi Arabia

Officials from Standard Chartered and Larsen and Toubro during the announcement of the issuance of the first-ever green guarantee in Saudi Arabia. (Asharq Al-Awsat)
Officials from Standard Chartered and Larsen and Toubro during the announcement of the issuance of the first-ever green guarantee in Saudi Arabia. (Asharq Al-Awsat)

Standard Chartered has issued Saudi Arabia’s first-ever green guarantee for Larsen and Toubro (L&T), a global leader in engineering, procurement, and construction (EPC) projects.

The green guarantee is issued for the green hydrogen project development at NEOM where L&T Saudi Arabia will be responsible for the design, local supplies, construction, and commissioning of the renewable and grid packages while the international supplies will be handled by its other subsidiary LTIFZE, both subsidiaries of L&T.

The launch reflects the Bank's commitment to supporting sustainable projects and promoting the development of green technologies in Saudi Arabia and beyond.

The green hydrogen project aims to produce hydrogen from renewable energy sources and will support the reduction of carbon emissions, in line with Saudi Arabia's Vision 2030.

“The announcement marks yet another significant milestone in L&T’s long-standing collaborative partnership with Standard Chartered,” CFO L&T Group Shankar Raman said.

“It further demonstrates our commitment to sustainability, the advancement of sustainable finance, and the transformative power of cooperative efforts.”

Raman added that “through such initiatives, we emphasize the power of partnerships in fostering sustainable development and practices. We remain focused on continuing to grow our green business in Saudi Arabia in partnership with and continued support from Standard Chartered as one of our key relationship banks.”

“We are pleased to issue the first sustainable guarantee in the Kingdom of Saudi Arabia which supports the growth and development of green hydrogen. At Standard Chartered, we know that technological and financial innovation is critical in supporting the global transition towards a low-carbon economy,” said Mohammad Salama, Standard Chartered’s regional head of corporate, commercial, and institutional banking in the Middle East and North Africa.

Standard Chartered said the sustainable guarantee will ensure that L&T receives the necessary financial support for the development of the wind and solar farms to support the green hydrogen generation in this project while meeting the bank’s environmental, social, and governance standards.

The green hydrogen project is expected to play a significant role in reducing carbon emissions and promoting sustainable development in Saudi Arabia.

It will also contribute to the country's ongoing efforts to reduce its dependence on oil.