Sign in
Aramco’s carbon storage project coming online soon, PIF targets new funds, and Saudi eyes AI leadership on day two of FII: The second and penultimate day of the Future Investment Initiative (FII) forum in Riyadh saw Aramco and the Public Investment Fund (PIF) inking agreements left and right, while Saudi set out ambitious AI plans and we got updates on a new monorail for KAFD. Plus so. Much. More.
(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)
ARAMCO FIRING ON ALL CYLINDERS-
#1- Aramco inked a collaboration framework agreement with Vietnam Oil and Gas Group (Petrovietnam) to explore energy storage, supply, and trade in Vietnam, according to a press release. No further details were shared on the agreement. Though Aramco has supplied crude oil to Vietnam, this marks its first potential investment in the country, Reuters reports.
#2- SIDF and Taulia join Aramco to provide affordable financing to its supply chain: Aramco, the Saudi Industrial Development Fund (SIDF) and working capital management firm Taulia partnered to establish a supply chain financing program, according to a press release. The initiative aims to provide affordable financing to Aramco’s suppliers to improve liquidity, liquidity forecasting, and supply chain resilience. It is expected to unlock SAR bns in liquidity, optimize working capital, and enhance business relationships across Aramco’s supply chain.
#3- Aramco’s planned 9 mn carbon storage project in Jubail will begin production by 2027 or 2028, putting it on track to be the world’s largest project of its kind, Aramco CEO Amin Nasser said at the forum. The accelerated carbon capture and sequestration project, which Aramco signed the agreement for back in November 2022, will see around 6 mn tons of CO2 coming from Aramco, while the rest will come from industrial sources. Scotland-based consulting and engineering firm Wood finalized the front-end engineering and design (FEED) scope for the first phase in June .
PRIVATE EQUITY-
PIF inked a non-binding MoU with Brookfield Asset Management to back Brookfield’s planned USD 2 bn Middle East-focused private equity fund, according to a press release. Under the agreement, PIF will serve as the anchor investor for Brookfield Middle East Partners (BMEP), which will direct at least 50% of its capital for investments in Saudi Arabia across the local industrials, technology, and healthcare sectors. The Saudi-focused investments will also be earmarked for “leading international companies looking to expand in the local market,” which will help drive foreign direct investment into the Kingdom, the press release said.
Brookfield also plans to expand its Riyadh office and establish the Brookfield Academy locally to support talent development. The MoU is contingent upon obtaining regulatory approvals and meeting specified conditions.The agreement also got ink in Reuters and Bloomberg.
ARTIFICIAL INTELLIGENCE-
#1- PIF + Google Cloud partnered to create a global AI hub near Dammam, aimed at upskilling the local workforce through AI programs, according to a press release. Using Google Cloud’s technology, the hub will focus on improving AI applications and data services, particularly Arabic language models, potentially adding USD 71 bn to Saudi’s GDP over eight years.
#2- Saudi Arabia is looking to bank on AI’s mega electricity requirements by offering the world’s lowest energy costs for data centers, at 4.8 cents per kWh using gas and 6.8 cents for renewables, Bloomberg reports. Blackstone CEO Stephen Schwarzman warned that electricity usage could rise by 40% in the next decade due to the AI boom, potentially hindering technological progress and straining the global grid. Google CEO Eric Schmidt noted that Saudi Arabia could leverage its abundant resources to become a key player in the energy-intensive AI sector.
#3- A global pledge for inclusive AI: The FII also saw the launch of the AI Inclusive Initiative, uniting global tech companies, knowledge partners, policymakers, and the private sector to fund AI projects in emerging markets, according to a press release. The FII Institute’s 19 Knowledge Partners will offer expertise and capacity-building support to drive the initiative forward.
OTHER PROJECT NEWS FROM FII-
#1- KAFD is getting a new monorail: The King Abdullah Financial District Development and Management Company (KAFD DMC) inked an agreement with Hassan Allam Construction Saudi, CRRC Hong Kong, and CRRC Nanjing Puzhen to launch a 3.6 km driverless monorail system, according to a press release (pdf) from our friends at Hassan Allam. The monorail will feature six trains and stations, integrated with the Riyadh Metro, and an expected capacity of 3.5k passengers per hour.
#2- Diriyah is on track: USD 15 bn out of the USD 64 bn allocated to the Diriyah project has been spent, with the first hotel set to open by late 2024, followed by 41 more hotels and nine museums, CEO Jerry Inzerillo said, according to Aleqtisadiah and Reuters.
#2- Manara Minerals expects to finalize its acquisition of a minority stake in First Quantum Minerals’ Zambian copper and nickel assets by the end of the year, Ma’aden CEO and Manara Minerals Vice Chairman Robert Wilt told Reuters. The Ma’aden and PIF JV was reported to be in advanced talks for a USD 1.5-2 bn acquisition of a 15-20% minority stake in the mines in Zambia earlier this month.
COMMENTARY + OTHER UPDATES-
#1- Saudi’s IPO market is “on fire,” fueled by a surge in growth capital and liquidity, including family wealth transitions, Moelis and Co. CEO Ken Moelis said, according to Zawya. “This is what happens when you have an exciting market, high growth, and capital that needs to go in and businesses that want the capital to grow,” he said.
Bucking the global trend: The volume of IPO activity in the Kingdom comes in contrast with the global slowdown in IPOs, JP Morgan CEO of Asset and Wealth Management Mary Callahan Erdoes said. Erdoes pointed to stricter regulations, activist investors, and businesses opting to remain private longer as reasons behind the current global trend.
#2- Saudi citizens are the world’s most satisfied with their lives, landing at an 84% satisfaction score, contrasted with a global dissatisfaction rate of 52%, according to the 2024 FII Priority Compass survey (pdf). On a global scale, 40% cite economic conditions as their main concern, followed by governance (19%), healthcare (17%), and environmental issues (13%).
The Global South is more optimistic about technology’s potential to improve lives (60%) than the Global North (34%). Additionally, 37% view AI as a potential threat, with 39% uncertain about its impact. The survey covers 24 countries, representing 62% of the world’s population.
#3- Elon Musk made a surprise virtual appearance at the forum to discuss the rapid pace of developments in AI and how it could match human abilities within a year or two. Bloomberg took note of the story.
