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Joint Saudi-German Investment for the Manufacture of Large Data Centers

CEO and partner of Legacy Technologies, Sem Köksal. (Asharq Al-Awsat)
CEO and partner of Legacy Technologies, Sem Köksal. (Asharq Al-Awsat)
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Joint Saudi-German Investment for the Manufacture of Large Data Centers

CEO and partner of Legacy Technologies, Sem Köksal. (Asharq Al-Awsat)
CEO and partner of Legacy Technologies, Sem Köksal. (Asharq Al-Awsat)

German and Saudi investors signed partnerships to enhance critical security infrastructure with the aim to establish the first factory in the Middle East for the manufacture of technological equipment and supplies and the production of large data centers.

Sem Köksal, CEO and partner of Legacy Technologies, revealed his recent endeavors with the Saudi government and private institutions to establish a “next generation data center” company, in order to localize the manufacture data centers in Riyadh.

The project will make Saudi Arabia the first country in the Middle East to have this type of data centers and would allow it to export its products to countries around the world.

Legacy Technologies is a German company that specializes in highly secure modular data centers using unique cyber-security tools and highly advanced energy systems to build secure, energy-efficient and sustainable next-generation data centers.

Köksal told Asharq Al-Awsat that while partnerships have already been signed with Saudi investors, the company is looking to forge cooperation agreements with Saudi governmental and private agencies, to contribute to strengthening critical security infrastructure.

He revealed that the company has signed a contract worth $560 million with the Saudi Excellence Holding to establish a joint company in the Kingdom, which is expected to start operations in September 2022.

This will be “the nucleus of a global partnership to enter the global market from Saudi Arabia,” according to Köksal.

It will be the first company to manufacture data centers in the Kingdom by Saudi engineers, he added.

He also noted that Legal Technologies was working closely with Prince Sultan University to establish a center and academy for research and development, stressing the Saudi market was one of the most interesting markets in the region.

He remarked that several global companies are closely watching the development achieved by Saudi Arabia under Crown Prince Mohammed bin Salman, Deputy Prime Minister and Minister of Defense.

These companies are eager to enter the Saudi market, Köksal revealed, saying the matter is not about “if” but rather “when” they will join.

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FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.