Saudi Arabia Targets 18 Water Products in Supply Security, Export Push

Saudi Water Authority President Abdullah Al-Abdulkarim, left, accompanies Environment, Water and Agriculture Minister Abdulrahman Al-Fadley on a tour of the event’s facilities. (Asharq Al-Awsat)
Saudi Water Authority President Abdullah Al-Abdulkarim, left, accompanies Environment, Water and Agriculture Minister Abdulrahman Al-Fadley on a tour of the event’s facilities. (Asharq Al-Awsat)
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Saudi Arabia Targets 18 Water Products in Supply Security, Export Push

Saudi Water Authority President Abdullah Al-Abdulkarim, left, accompanies Environment, Water and Agriculture Minister Abdulrahman Al-Fadley on a tour of the event’s facilities. (Asharq Al-Awsat)
Saudi Water Authority President Abdullah Al-Abdulkarim, left, accompanies Environment, Water and Agriculture Minister Abdulrahman Al-Fadley on a tour of the event’s facilities. (Asharq Al-Awsat)

Saudi Arabia is moving to localize 18 strategic water-sector products in a drive to secure critical supplies, cut reliance on foreign supply chains and build an export-ready industry.

Drawing on decades of operational expertise, the kingdom aims to become a regional hub for developing, manufacturing and exporting water technologies.

Supply security was central to selecting the 18 products, Saudi Water Authority President Abdullah Al-Abdulkarim told Asharq Al-Awsat, saying geopolitical tensions and global shifts had increased the need for stable supply chains and reliable, sustainable services.

Speaking at a news conference in Riyadh on Wednesday on the sidelines of the “Localizing the Water Industry: Knowledge Transfer and Capacity Building” ceremony, Al-Abdulkarim said the authority had worked with relevant government bodies since early 2024 to identify the products.

They include key components used across Saudi Arabia’s water production, transmission and distribution system. The initiative is part of a broader effort to unlock the economic and knowledge-based value the sector has built over decades, he said.

$4 billion domestic market

Saudi Arabia’s market for the 18 products is expected to reach about 15 billion riyals ($4 billion) by 2033, Al-Abdulkarim said. Across the Middle East and North Africa, the market is estimated at around 65 billion riyals ($17.3 billion).

The opportunity could boost the water sector’s contribution to the kingdom’s trade balance, attract new industrial investment and increase local content.

Saudi Arabia was once one of the world’s largest water consumers. Today, it has become an experienced operator with advanced technical expertise built through managing one of the most complex water systems in the world, Al-Abdulkarim said.

That expertise is no longer limited to running the system. It is now helping drive the development of equipment and technology.

The sector is developing advanced tools and indicators to track equipment performance and improve efficiency. Each machine is monitored against as many as 17 indicators daily, allowing operators to identify improvements early and raise operational efficiency.

The 18 products are also closely tied to other industrial and service sectors through their inputs and requirements. Localizing them could therefore support national economic growth and deepen domestic value chains, Al-Abdulkarim said.

Developing the next generation

“Saudi Arabia was the largest water consumer and has now become an expert operator. It then became a source of expertise for manufacturers of the system’s various components, bringing us to a new stage in which we become a partner in developing the next generation of technologies,” Al-Abdulkarim said.

The kingdom is now entering a new phase of supply-chain localization, targeting a 90% domestic supply reliability rate for key components.

The goal is to strengthen the sector’s ability to withstand geopolitical and global disruptions while making the national water system more resilient and sustainable.

The integrated approach could transform Saudi Arabia from a consumer of water technology into a regional platform for its development, manufacture and export, expanding the sector’s economic impact and strengthening the kingdom’s presence in regional and global markets.

Localization is not solely about meeting the sector’s current needs, Al-Abdulkarim said. It is also intended to build an industrial and knowledge base capable of innovation, product development and exports.

That would position the water sector as a driver of economic growth, income diversification and Saudi competitiveness in water technology.

Seven factories planned

Marking the shift from identifying opportunities to delivering projects, the Saudi Water Authority announced that six investment opportunities had entered the industrial implementation phase, including five new opportunities.

The announcement came during a ceremony attended by ministers, senior government officials, ambassadors and chief executives.

Three industrial localization agreements were signed and two factories inaugurated. The agreements provide for seven factories, with total investment across the six opportunities reaching 2.8 billion riyals ($746.6 million).

The projects move the localization program from presenting opportunities to building domestic industrial and technical capacity.

The initiative is being carried out with the Local Content and Government Procurement Authority, which oversees the contracting mechanism for industrial localization and knowledge transfer, and with support from the industry and mineral resources and investment sectors.

It seeks to turn the water sector’s purchasing power into a manufacturing and investment engine by matching project requirements and future demand with domestic production opportunities.

This gives investors and international manufacturers greater visibility over the scale of demand, encouraging them to transfer knowledge and technology and establish production in Saudi Arabia.

The kingdom already has at least 70% of the production inputs required for the targeted components.

Its water-sector supplier base has expanded from 739 companies in 2022 to 3,441 in 2026. Local content rose from 45% in 2020 to 68.27% in the first half of this year.

Those gains strengthen Saudi Arabia’s position as an industrial base capable of rapid growth and regional and international expansion.

Specialized jobs

Localization will go beyond transferring production lines. It will include research and development, technology and knowledge transfer, and the skills needed to operate these industries and improve their products.

The agreements require Saudi nationals to account for at least 70% of workers in specialized positions, linking industrial investment directly to the development of national engineering and technical talent.

Products being localized through the contracting mechanism for industrial localization and knowledge transfer include reverse-osmosis membranes, antiscalants and membrane-cleaning chemicals.

The Saudi Water Authority has also worked to meet its localization targets for energy-recovery devices, high-pressure pumps, distributed control systems and supervisory control and data acquisition systems, known as SCADA.

Together, they will form an interconnected industrial and technological chain supporting water production and facility operations.

Several of the components can also be used in energy, mining, agriculture and food processing, extending the impact of localization across multiple value chains.

Global manufacturers

The projects underscore Saudi Arabia’s growing place on the global water-technology manufacturing map and the reach of its strategic partnerships.

They include four Italmatch Chemicals factories across Wa’ad Al-Shamal, Jubail and Jeddah. The Wa’ad Al-Shamal facilities will form the company’s largest industrial complex outside Italy. All four factories are scheduled to begin production in 2028.

The projects also include Torishima’s high-pressure pump factory in Jeddah and Energy Recovery’s energy-recovery device factory in Dammam — the company’s only manufacturing facility outside the United States.

Alfanar will operate a distributed control systems factory in Riyadh, bringing the total number of factories linked to the opportunities now under implementation to seven.

From the first quarter of 2027, Energy Recovery’s Saudi factory is expected to supply about one-third of the company’s customers worldwide.

Spread across several regions of the kingdom, the projects are expected to strengthen value-chain integration and increase the export potential of Saudi-made products.



Saudi Sukuk, Bonds Gain New Route to Liquidity

An investor walks past the Tadawul logo at the Saudi stock exchange. (Reuters)
An investor walks past the Tadawul logo at the Saudi stock exchange. (Reuters)
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Saudi Sukuk, Bonds Gain New Route to Liquidity

An investor walks past the Tadawul logo at the Saudi stock exchange. (Reuters)
An investor walks past the Tadawul logo at the Saudi stock exchange. (Reuters)

Saudi Arabia is bringing trade execution, clearing and settlement into a connected electronic workflow for its riyal-denominated sukuk and bond market, a step aimed at making secondary trading more efficient.

The change could make existing liquidity easier to find, improve price discovery and cut manual processing. It follows an approach seen in international markets, where electronic trading has developed alongside integrated local post-trade systems.

Tradeweb’s alternative trading system, previously available to international investors in Saudi Arabia, now also offers an electronic route for domestic investors and dealers.

The US-based company said GIB Capital and Saudi Awwal Bank executed the first domestic trade on the system.

Trade details were sent to the Securities Clearing Center Company, known as Muqassa, for post-trade processing and then to the Securities Depository Center Company, known as Edaa, for settlement.

Tradeweb is licensed by Saudi Arabia’s Capital Market Authority to operate the system for sukuk and debt instruments.

Under the new process, a domestic investor can request and compare quotes electronically from eligible dealers. Once a trade is executed, its details go to Muqassa, which sends settlement instructions to Edaa. Participation is limited to professional investors and domestic dealers who meet the relevant registration and account requirements.

Previously, domestic execution and settlement followed separate processes, which could require trade details to be transferred or entered into different systems.

The connected electronic record should reduce repeated data entry and manual intervention, while making trades easier to trace and audit. The trades remain bilateral, and existing local settlement arrangements still apply.

Electronic trading does not create liquidity in itself, Enrico Bruni, Tradeweb’s Managing Director and Co-head of Global Markets, told Asharq Al-Awsat. It does, he said, make existing liquidity easier to find and access.

A standardized, traceable request-for-quote process lets investors compare prices from eligible dealers. Bruni said wider use among clients and dealers could, over time, improve price discovery and deepen the secondary market.

Enrico Bruni, Tradeweb’s Managing Director and Co-head of Global Markets. (Tradeweb)

From international to domestic trading

Tradeweb launched the alternative trading system in Saudi Arabia in October 2025, initially allowing international investors to trade riyal-denominated sukuk and debt instruments electronically. Early trades involved international institutions, including BlackRock, BNP Paribas and Goldman Sachs.

The domestic route gives institutions and dealers in Saudi Arabia an electronic trading channel while keeping post-trade processing and settlement within local infrastructure. A transaction can now start with an electronic request for quotes and proceed through local clearing and settlement.

The platform is still at an early stage. Bruni did not provide specific trading-volume figures since its launch, saying activity first focused on access for international investors before trading between domestic participants was added.

A growing need for price discovery

The process arrives as Saudi Arabia’s riyal debt market expands and international participation increases.

Saudi government debt instruments are expected to enter J.P. Morgan’s emerging-market government bond index in stages from January 2027, widening the pool of investors who track the index or invest in its securities.

That broader international investor base, alongside growing domestic participation, could increase demand for efficient access to dealer liquidity and clearer price discovery as the secondary market develops.

Scope for expansion

Bruni said electronic trading could eventually extend beyond government sukuk and riyal-denominated debt instruments to corporate bonds, repurchase agreements and derivatives. Any addition would depend on client demand, available liquidity and regulatory approval.

Tradeweb said the current infrastructure could support other products and trading methods while preserving Saudi market account structures, settlement arrangements and trading practices.

Over the next two to three years, Bruni said, success would be measured less by a particular trading volume than by regular use among more domestic and international investors, a larger network of liquidity providers and a wider range of traded instruments.

For now, the change is chiefly operational: it connects execution with local clearing and settlement and makes dealer liquidity easier to access.

As participation grows, that could help develop secondary trading in riyal-denominated sukuk and bonds.


ECB Says Will Have to Act Again if 2nd-round Inflation Effects Appear

European Central Bank (ECB) President Christine Lagarde (CL) and Gabriel Makhlouf (CR), Governor of the Central Bank of Ireland during the family photo at the Informal meeting of EU Finance Ministers in Dublin Castle, Dublin, Ireland 18 September 2026. EPA/BRYAN MEADE
European Central Bank (ECB) President Christine Lagarde (CL) and Gabriel Makhlouf (CR), Governor of the Central Bank of Ireland during the family photo at the Informal meeting of EU Finance Ministers in Dublin Castle, Dublin, Ireland 18 September 2026. EPA/BRYAN MEADE
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ECB Says Will Have to Act Again if 2nd-round Inflation Effects Appear

European Central Bank (ECB) President Christine Lagarde (CL) and Gabriel Makhlouf (CR), Governor of the Central Bank of Ireland during the family photo at the Informal meeting of EU Finance Ministers in Dublin Castle, Dublin, Ireland 18 September 2026. EPA/BRYAN MEADE
European Central Bank (ECB) President Christine Lagarde (CL) and Gabriel Makhlouf (CR), Governor of the Central Bank of Ireland during the family photo at the Informal meeting of EU Finance Ministers in Dublin Castle, Dublin, Ireland 18 September 2026. EPA/BRYAN MEADE

European Central Bank will have to raise interest rates again if high energy prices feed through to other areas but so far there is no sign of such second-round inflation effects, ECB policymaker ⁠Gabriel Makhlouf said on ⁠Wednesday.

"Although inflation is above our target, we're not seeing the sorts of second round effects ⁠that start feeding through to prices," Makhlouf, Ireland's central bank chief, told national broadcaster RTE in an interview.

"If that happens (energy prices remain high and feed into other areas), we will have to take ⁠action ⁠again to meet our target."

Makhlouf cautioned earlier this month following the ECB's second interest rate hike this year that raising interest rates "a great deal more" risked damaging economic growth.

Also Wednesday, the ECB said the European Union could close a third of its productivity gap with the United States if it had as many large companies, adding its voice to calls for reforms that make it easier for businesses to scale up.

European policymakers are trying to tackle the EU's economic underperformance relative to the United States, which is home to many of the world's largest companies and is leading the race to develop artificial intelligence.

EU workers produce ⁠20% less output ⁠per hour than their US counterparts, according to academic studies. They were almost on an even keel in 1995.

ECB staff found that if Europe had the same distribution of large and small firms as the United States – without changing how productive each ⁠type of company is – the productivity gap would shrink by roughly one-third.

Large firms are significantly more productive than smaller ones. Companies with at least 250 employees generate an average of €86,800 in value added per worker annually, while firms with fewer than 10 employees produce less than half that amount.

The ECB said Europe's weaker productivity performance also reflects lower innovation, fragmented regulation and less developed capital markets, all of which ⁠make it ⁠harder for companies to grow and compete internationally.

The central bank backed the proposed "EU Inc" framework, an EU-wide corporate law regime aimed at reducing barriers to cross-border business activity.

Modelled loosely on Delaware's corporate framework in the United States, EU Inc would create a single legal structure operating across the bloc, bypassing a patchwork of 27 national company law systems and dozens of corporate forms.

"EU Inc. has the potential to support the Single Market, by strengthening competition, innovation and productivity growth," the ECB said.


Surveys: Europe's Economy Surprisingly Resilient amid War-Driven Energy Shock

A view of the European Parliament in Brussels, Belgium, 23 September 2026. EPA/OLIVIER HOSLET
A view of the European Parliament in Brussels, Belgium, 23 September 2026. EPA/OLIVIER HOSLET
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Surveys: Europe's Economy Surprisingly Resilient amid War-Driven Energy Shock

A view of the European Parliament in Brussels, Belgium, 23 September 2026. EPA/OLIVIER HOSLET
A view of the European Parliament in Brussels, Belgium, 23 September 2026. EPA/OLIVIER HOSLET

Europe's economy is showing unexpected signs of health even as conflicts in the Middle East and Ukraine drive up energy costs for firms and households, key business surveys showed on Wednesday.

Business activity across the euro zone accelerated in September at its fastest rate in over three years, S&P Global said, with solid growth registered across both the manufacturing and service sectors.

The S&P Global Flash Euro Zone Composite PMI Output Index — where readings above 50.0 signal an expansion in activity — jumped to 53.1 in September from August's 52.0, defying expectations in a Reuters poll ⁠for a dip ⁠to 51.7. The highest forecast in the poll was for 52.6.

"All in all, today’s PMI readings are almost too good to be true," said Carsten Brzeski at ING.

"A euro zone economy that remains completely unharmed by an energy price shock and supply chain disruptions is a welcome surprise. Let’s hope it doesn’t turn out to be a mirage."

S&P said the latest rise in output was broad based across geographies covered by its data.

Business activity in Germany, Europe's largest ⁠economy, expanded solidly in September despite firms facing increased inflationary pressures while in France it grew at its fastest pace in just over two years, driven by a rebound in services demand.

But in Britain, outside the European Union, growth cooled this month as inflation pressure built, its PMI showed, an awkward backdrop for finance minister John Healey ahead of his first budget next month.

Overall new orders in the currency union surged at their fastest pace in over four years supported by a further rise in exports — which include intra-euro zone trade.

The bloc's services PMI bounced to its highest in nearly a year and was well ahead of estimates for a fall, while the manufacturing index held steady.

A gauge of output - ⁠which feeds into ⁠the composite PMI - nudged higher.

To meet the rise in demand firms took on more staff but faced a jump in input costs due to elevated energy prices stemming from the US war with Iran. They were able to pass some of this on to customers.

"September’s big improvement in the euro zone’s composite PMI supports our view that despite the weakness in the official activity data in July, GDP will increase in Q3," said Jack Allen-Reynolds at Capital Economics. "The output price PMIs rose too, but there is still no sign of 'second-round' effects on wages."

Earlier this month the European Central Bank raised interest rates for the second time this year to quell an energy-driven inflation rise and warned price pressures could prove lasting.

Markets are pricing three more ECB rate hikes by the end of June 2027.

"Today's PMI readings make it more difficult for even the ECB's most dovish policymakers to rule out another rate hike," said ING's Brzeski.