Harnessing the Sun: Saudi Arabia’s solar revolution

Harnessing the Sun: Saudi Arabia’s solar revolution
Saudi Arabia’s National Renewable Energy Program sees the Kingdom aiming for a solar energy capacity of 40 gigawatts by 2030. Above, the solar plant in Uyayna, north of Riyadh on March 29, 2018. (AFP file photo)
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Updated 21 December 2024
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Harnessing the Sun: Saudi Arabia’s solar revolution

Harnessing the Sun: Saudi Arabia’s solar revolution

RIYADH: Saudi Arabia is a world leader when it comes to extracting energy sources from the ground, but it is the Kingdom’s drive to harness a power supply in the sky that is attracting attention.

Favorable government policies, a shift to meeting energy demands through renewable power, and a reduced dependence on fossil fuels are all factors pushing forward the Kingdom’s solar industry.

The ambitious target of Saudi Arabia’s National Renewable Energy Program sees the Kingdom aiming for a solar energy capacity of 40 gigawatts by 2030, promising significant opportunities for the market in the years to come.

According to market research firm Mordor Intelligence, the Kingdom’s solar market is projected to achieve a compound annual growth rate of 51 percent between 2024 and 2029 as a host of facilities come online.

However, challenges lie ahead with the rise of alternative clean energy sources like wind and the continued availability of fossil fuels potentially hindering solar energy market growth.

Solar technologies deployed in Saudi Arabia to maximize energy efficiency 

According to Christopher Decker, partner in energy and natural resources at Oliver Wyman, India, Middle East and Africa, Saudi Arabia is at the forefront of innovative solar technologies aimed at maximizing energy efficiency and sustainability in the region.

“One notable advancement is the Dumat Al-Jandal Concentrated Solar Power plant, which harnesses solar energy to heat liquid for thermal energy storage, enabling energy availability even when sunlight is not present,” he said.

“Additionally, the Sakaka Solar Plant employs bifacial solar panels that take advantage of the reflectivity of the surrounding sand, significantly enhancing solar efficiency. To maintain optimal performance, projects like the Noor Energy 1 plant in NEOM have implemented waterless robotic cleaning technologies, which not only ensure high efficiency but also reduce operational costs,” Decker added.

The Oliver Whyman official went on to note that the integration of smart grids and artificial intelligence technologies allows for the optimization of solar energy generation by predicting energy demand and forecasting weather patterns, thereby minimizing waste.

“Lastly, the NEOM Green Hydrogen initiative exemplifies the use of solar power to produce green hydrogen and subsequently green ammonia, showcasing a commitment to sustainable energy solutions. Together, these technologies position Saudi Arabia as a leader in solar innovation, driving the transition toward a more sustainable energy future,” Decker said.

Solar technologies globally have reached a high degree of maturity and the cost reductions are driven by the growing efficiency of solar cells as well as economies of scale.

According to Adnan Merhaba, partner and energy and utilities practice lead at Arthur D. Little Middle East, these incremental innovations have also made their way into Saudi Arabia and some developers have proposed additional developments, such as bifacial solar cells, that can further enhance yields.

“Saudi Arabia, a leader in water desalination technology, is also pioneering solar desalination to enhance sustainability. Furthermore, research institutes in KSA are investing in the next generation of higher efficiency solar cells such as tandem perovskite cells that can achieve a step change for efficiency gains,” Merhaba said.

The King Abdullah University of Science and Technology is a prime example of the growing solar industry in Saudi Arabia.




Stefaan De Wolf, KAUST professor material science and engineering. (Supplied)

According to Stefaan De Wolf, professor of material science and engineering at the Physical Science and Engineering Division in the university, the institution is pioneering research and development in emerging photovoltaic technologies aimed at maximizing energy efficiency and sustainability.

“One of the key innovations we are advancing is the combination of perovskite and silicon PV, which significantly enhances solar power efficiency beyond traditional technologies. This hybrid approach has the potential to achieve ultra-high efficiency solar cells for even harsh environmental conditions of Saudi Arabia – high temperatures and dust,” De Wolf said.

“Additionally, we are exploring the development of bifacial solar panels, which can generate electricity from both sides, further improving energy yield. These innovations are designed to help Saudi Arabia not only maximize its solar energy potential but also contribute to the global advancement of sustainable energy solutions,” the professor added.

From his side, Qiaoqiang Gan, professor of material science and engineering at the same division, shed light on the fact that industry players are actively seeking advanced thermal management technologies to reduce the operational temperatures of PV systems installed in the Kingdom.

“This challenge is pressing for Middle Eastern countries due to the region’s high temperatures. Addressing this issue requires more reliable materials and devices on a microscopic level, as well as advanced thermal management strategies on an operational level,” Gan said.




Qiaoqiang Gan, KAUST professor of material science and engineering. (Supplied)

Shihab El-Borai, partner with Strategy& Middle East, noted that projects like the Sudair Solar PV exemplify Saudi Arabia’s commitment to cutting-edge technologies, incorporating bifacial panels and sun-tracking systems to maximize efficiency.

“Saudi Arabia is leveraging world-class innovations in solar energy to not only produce electricity but to create a sustainable model for the entire region,” El-Borai said.

“Companies like Mirai Solar are also making strides with multifunctional solar panels that harness diffused sunlight while providing variable shading. These innovations demonstrate Saudi Arabia’s ability to leverage cutting-edge technologies to reduce its carbon footprint and position itself as a global leader in solar energy,” he added.

Solar sector contribution to the Kingdom’s economic diversification and energy goals

The growth of Saudi Arabia’s solar energy industry is vital for the nation’s economic diversification and is in line with the goals of Vision 2030. Through the enhancement of solar power infrastructure, Saudi Arabia is catalyzing the emergence of fresh sectors, enticing international investments, and cultivating a culture of innovation.

“This growth not only supports local manufacturing and supply chains but also generates employment opportunities and enhances human capital development, positioning the Kingdom as a regional leader in renewable energy,” Decker from Oliver Wyman said.

“In terms of energy security, solar power contributes to a resilient and diversified energy mix. By incorporating advanced solar technologies, energy storage, and smart grids, Saudi Arabia can enhance the flexibility and stability of its electricity grid,” he added.

The Oliver Wyman partner continued to highlight that solar-powered initiatives, like green hydrogen production, ensure that the Kingdom adds an additional stream of energy exportation, tapping into new revenue streams while promoting environmental sustainability.

“This strategic expansion strengthens Saudi Arabia’s energy capabilities for the future,” Decker concluded in that regard.




Christopher Decker, Partner in Energy and Natural Resources at Oliver Wyman, India, Middle East and Africa. (Supplied)

Demand for power is ever increasing in the Kingdom, largely driven by economic and population growth as well as giga-scale developments across the country.

“The wide deployment of solar projects can also prop up adjacent sectors such as battery storage, smart grid technologies and green hydrogen production. From an energy security perspective, burning less hydrocarbons for domestic use frees up more oil for export, enhancing revenues for investment in economic diversification and also supports the Kingdom achieve its sustainability goals,” he added.

On KAUST’s behalf, De Wolf explained that by investing in renewable energy, particularly solar power, the Kingdom is reducing its dependence on fossil fuels and building a more sustainable and resilient economy.

As for Gan, he indicated that given its geographical location, Saudi Arabia has an abundance of solar energy, surpassing that of many developed countries – an evident advantage in terms of available sunlight as an energy source.

“However, high temperatures present a significant challenge, leading to overheating in semiconductor solar cells. To effectively implement PV systems in Saudi Arabia, it is essential to develop specialized solutions that fully account for the unique local weather and environmental conditions. Such solutions must aim to maximize the utilization of abundant solar energy while mitigating the adverse impacts on PV performance,” the professor said.

He further noted that developing these specialized solutions will require further research and development, presenting both opportunities and challenges in advancing energy security goals.

El-Borai from PwC noted that by shifting toward renewables, the Kingdom is securing a more stable and sustainable energy supply, which supports broader economic growth.

“The localization of renewable energy manufacturing is another critical component. Saudi Arabia is focusing on producing renewable energy components domestically, reducing import dependency and positioning itself as a hub for clean energy technologies. By localizing renewable energy production, Saudi Arabia is positioning itself as a hub for clean energy technology in the region, enhancing both economic growth and energy security,” he said.

“By 2030, Saudi Arabia aims to produce 1.2 million tonnes of green hydrogen annually, with solar energy powering the electrolysis process. This dual focus on solar and hydrogen is expected to drive further economic diversification and solidify the Kingdom’s leadership in green energy,” El-Borai added.

Challenges encountered in the Kingdom’s solar industry

The deployment of solar energy in Saudi Arabia faces significant challenges, particularly around localizing the value chain and addressing environmental factors such as high temperatures and dust.

From Decker’s perspective, Saudi Arabia faces several challenges in scaling up its solar energy capacity, two of which are infrastructure limitations and regulatory complexities.

“To address these challenges, Saudi Arabia is investing in modernizing its grid infrastructure through smart grid technologies and energy storage solutions, enabling better management of intermittent solar power. The government is working on streamlined regulatory processes and introducing incentive schemes, such as public-private partnerships and favorable tariffs, to encourage private sector investment, but there is still much to do in this area,” he added.

From Arthur D. Little Middle East’s side, Merhaba said that in order to meet its highly ambitious objectives by 2030, the Kingdom will have to overcome technical challenges, global supply chain issues due to increasing demands for solar cells, and supply concentrated largely in China.

There are also concerns around the disruptions in global trade, the localization and human capital needed to ensure development of a robust and competitive solar value chain industry in the Kingdom, and adequate supply of engineers and technicians to meet the growing demand in the sector.

The country has strong strategies and policies, including national industrial and localization plans, along with other initiatives, that are poised to help them tackle these obstacles effectively.

Saudi Vision 2030 impact on strategies for transitioning toward renewable energy sources

By 2030, Saudi Arabia aims to produce approximately 58.7 GW of renewable energy, with solar energy contributing 40 GW to this total.

On behalf of Oliver Wyman, Decker explained that in terms of establishing a regulatory framework to facilitate the development of renewable energy, Vision 2030 outlines the need for a supportive environment.

This involves creating policies that incentivize private sector participation through Power Purchase Agreements that guarantee long-term revenue for investors, subsidies and tariff reforms to make renewable energy more competitive, and streamlined licensing processes to reduce bureaucratic hurdles for solar projects. 

With regards to promoting private sector investment, Decker highlighted that the Saudi government is actively encouraging public-private partnerships and foreign direct investment to drive the growth of solar power projects. 

“The National Renewable Energy Program, launched under Vision 2030, is a key initiative that seeks to attract $30-$50 billion in investments for renewable energy projects,” he said.

In terms of maintaining a strong traditional energy sector while investing in diversification, Decker added: “While Vision 2030 emphasizes the transition to renewable energy, it also acknowledges the importance of maintaining a robust traditional energy sector, particularly oil and gas, which remain critical to the Kingdom’s economy.”

This comes as Saudi Arabia aims to optimize its oil and gas production through technological advancements and efficiency improvements to ensure the sector continues to generate revenue.

On behalf of Arthur D. Little Middle East, Merhaba highlighted that the Kingdom has undergone a pivotal shift in its economic and energy landscape in recent years.

“It ushered in the era of renewables and accelerated the deployment of solar. With a highly ambitious target to achieve 50 percent renewable adoption by 2030, which are under consideration for an upward revision, it has not only led to development of mega solar projects at record low prices, but also to build momentum in developing national champions across the solar value chain,” he said.

KAUST representative De Wolf reiterated the fact that the Vision has created a favorable climate for investment and development, with ambitious renewable energy targets shaping the future of the Kingdom’s energy mix.

Similarly, Gan emphasized that the Vision 2030 has created fertile ground for solar energy development, with policies that incentivize public-private partnerships and invest heavily in renewable energy infrastructure.

“This initiative aims to diversify the Kingdom’s energy mix by transitioning toward cleaner, more sustainable energy sources,” he said.

From PwC’s side, El-Borai explained that the National Renewable Energy Program is central to this.

“By 2060, Saudi Arabia aims to reach Net Zero status, supported by significant financial commitments, such as the planned $266 billion investment in cleaner energy sources, including solar,” he said.

“The Kingdom is actively developing projects with a capacity of 20 GW annually to meet its target of 100 GW to 130 GW of clean energy by 2030. This strategic framework also emphasizes localizing renewable energy manufacturing, with collaborations like the Public Investment Fund’s partnership with Chinese solar manufacturers to establish 30 GW of solar PV production capacity. The NREP is not just about generating clean energy — it’s about securing the Kingdom’s energy future and reducing its reliance on fossil fuels,” the PwC partner said.


Pakistan ports face export backlog as India’s transit ban forces shipping lines to reroute

Pakistan ports face export backlog as India’s transit ban forces shipping lines to reroute
Updated 10 May 2025
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Pakistan ports face export backlog as India’s transit ban forces shipping lines to reroute

Pakistan ports face export backlog as India’s transit ban forces shipping lines to reroute
  • Shipping companies launch special feeder services via Colombo to handle cargo from Pakistan
  • Some international shipper are imposing up to $800 surcharge per container amid the situation

KARACHI: Pakistan is facing a “big backlog” of export containers at its ports after international shipping lines began bypassing the country, following India’s decision to block vessels carrying Pakistani cargo, officials and shipping documents confirmed to Arab News on Friday.
The disruption has led several global shipping companies to impose emergency operational surcharges on Pakistani cargo, citing the “significant impact” of regional geopolitical tensions on their operations.
The move is expected to raise shipping costs and, ultimately, consumer prices in Pakistan, a country of over 240 million people already grappling with economic challenges.
“The European shipping services are bypassing Pakistan ports after India’s ban on the transit of ships loaded with cargoes from Pakistan,” said Syed Tahir Hussain, Secretary General of the Pakistan Ship Agents Association (PSAA).
He accused New Delhi of attempting to undermine Pakistan’s recovering economy, which has shown signs of stabilization under the International Monetary Fund’s (IMF) $7 billion loan program.
PSAA Chairman Mohammed A. Rajpar called India’s move “unwarranted” and against international conventions, saying it was designed to discourage shipping lines from calling at Pakistani ports.
The situation comes as Islamabad is attempting to break free from its boom-and-bust economic cycles by boosting exports, which rose 6 percent to $27 billion through April, according to the Pakistan Bureau of Statistics.
Until recently, many international shipping services transited Pakistani cargo through India’s largest ports — Mundra and Nhava Sheva — by loading what is termed Remaining On Board (ROB) freight.
However, India embargoed this practice last week, prompting several carriers to remove Pakistani ports from their routes and instead launch dedicated feeder services to handle trade valued at approximately $87 billion last year.
Most of Pakistan’s containerized cargo is handled through the South Asia Pakistan Terminal (SAPT) operated by CH Hutchison Holdings, Qasim International Container Terminal (QICT) run by DP World and the Karachi Gateway Terminal managed by Abu Dhabi Ports Group.
“Some vessels carrying Pakistan’s exports sailed from QICT were not allowed berthing in India,” said Hussain, whose association represents over 50 international shipping lines.
“They had to divert to Dubai and other nearby ports,” he added, without specifying when the incident occurred.
Shipping documents seen by Arab News show that at least four vessels were denied entry by Indian authorities earlier this week due to “Karachi onboard cargo.” These ships were rerouted to Colombo in Sri Lanka and Jebel Ali in the United Arab Emirates.
Swiss carrier MSC Mediterranean Shipping redirected all destination cargo via Colombo aboard its vessel MSC Positano V-JP526R, which had been scheduled to call at QICT on May 6.
This change, MSC said in a customer notice, was “due to the current geopolitical situation and restrictions on imports and exports via/from India.”
French shipping giant CMA CGM has removed Karachi from at least four of its service routes, citing the need to adjust operations to and from Pakistan.
“BIG BACKLOG” AT PORTS
Export congestion is building at Pakistani ports as hundreds of containers await shipment.
“There is big backlog,” said Khurram Mukhtar, Patron-in-Chief of the Pakistan Textile Exporters Association (PTEA).
Textiles remain Pakistan’s largest export sector, contributing $17 billion last year.
Mukhtar noted that most shipping lines were now planning to route exports through Colombo, with system updates expected by Monday.
MSC has launched a “Pakistan-Colombo Shuttle Service,” a weekly feeder vessel that will transport export containers to Sri Lanka for onward connections to global destinations.
Amid the ongoing crisis, international shipping lines have begun imposing surcharges on Pakistani exporters and importers.
CMA CGM has introduced an Emergency Operational Recovery Surcharge (EORS) of up to $800 per container for shipments to the US, Latin America and Australia, effective from May 15 through June 6.
The French firm said the surcharge was necessary to maintain service reliability and safety during this period. CMA CGM operates more than 250 routes globally with a fleet of 650 vessels.
“Pakistan’s exports are suffering,” said a senior official at one of Pakistan’s major container terminals, speaking on condition of anonymity.
“This will lead to the buildup of a huge container backlog at Pakistani ports,” the official said. “There will be issues like port demurrages. The shipping lines will be charging the consignees with detentions.”


PM Sharif announces IMF approval of $1 billion disbursement to Pakistan under $7 billion deal

PM Sharif announces IMF approval of $1 billion disbursement to Pakistan under $7 billion deal
Updated 09 May 2025
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PM Sharif announces IMF approval of $1 billion disbursement to Pakistan under $7 billion deal

PM Sharif announces IMF approval of $1 billion disbursement to Pakistan under $7 billion deal
  • The prime minister expresses satisfaction India’s ‘efforts to sabotage’ the loan program had failed
  • He says Pakistan’s economic situation is improving and it is moving toward financial progress

KARACHI: The International Monetary Fund (IMF) approved a $1 billion disbursement for Pakistan under a loan program secured by the government last year, Prime Minister Shehbaz Sharif said in an official statement late Friday.

The announcement followed an IMF Executive Board meeting to finalize staff-level agreements related to the $1 billion payout, as well as Pakistan’s new $1.3 billion arrangement under a climate resilience facility approved in March.

The meeting took place at a time when Pakistan is working to revive investment amid a gradually stabilizing macroeconomic environment, following a prolonged downturn that compelled it to seek external financing from allies and global lenders.

“Prime Minister Shehbaz Sharif expressed satisfaction over the IMF’s approval of the $1 billion tranche for Pakistan and the failure of India’s underhanded tactics against the country,” his office said in a statement issued after the board’s decision.

Media reports said recently India had attempted to pressure the IMF to block the disbursement, citing heightened military tensions between the two neighbors following a deadly April 22 attack in Indian-administered Kashmir that left 26 tourists dead.

New Delhi blamed Islamabad for the assault, an allegation Pakistani officials repeatedly denied.

Sharif said international financial institutions had “responsibly rejected” India’s narrative and reaffirmed their trust in Pakistan’s economic strategy.

“Indian efforts to sabotage the IMF program have failed,” he said, adding the disbursement would help stabilize the economy and steer it toward long-term recovery.

He praised Deputy Prime Minister and Foreign Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb and other members of the government’s economic team for their role in securing the funds.

Pakistan has been working to broaden its tax base, improve energy sector efficiency, and unlock private sector growth as part of its reform commitments under the $7 billion IMF loan program.

“By the grace of God, the country’s economic situation is improving, and Pakistan is moving toward progress,” Sharif said. “The government remains committed to tax reforms, energy sector improvements and private sector development.”

He reiterated that Pakistan would stay the course on economic stabilization, effective performance and long-term planning.

The IMF funding approval comes at a critical time for Pakistan, as it seeks to reassure global investors and shore up foreign exchange reserves amid geopolitical instability and upcoming budget negotiations.


Pakistani stocks surge sharply on IMF optimism, hopes of easing India-Pakistan standoff

Pakistani stocks surge sharply on IMF optimism, hopes of easing India-Pakistan standoff
Updated 09 May 2025
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Pakistani stocks surge sharply on IMF optimism, hopes of easing India-Pakistan standoff

Pakistani stocks surge sharply on IMF optimism, hopes of easing India-Pakistan standoff
  • The benchmark KSE-100 index rose 3,647.82 points, or 3.52 percent, to close at 107,541.45
  • India-Pakistan tensions triggered about 12 percent market decline between April 23 and May 8

KARACHI: The Pakistan Stock Exchange (PSX) rebounded sharply on Friday, climbing over 3,500 points, as investor sentiment improved ahead of an International Monetary Fund (IMF) Executive Board meeting and what some analysts described as easing tensions between Pakistan and India.

The benchmark KSE-100 index recovered 3,647.82 points, or 3.52 percent, closing at 107,541.45, after a historic plunge of 6,482 points on Thursday, the largest single-day drop in the index’s history, triggered by fears of an escalating conflict between the two nuclear-armed neighbors.

"The recovery was on account of optimism on IMF Executive Board meeting scheduled to consider Extended Fund Facility (EFF) program, where market expects smooth approval," Topline Market Review said after the end of trading. "Overall decline in cross border hostilities also provided stimulus to investor sentiment."

The EFF, a $7 billion loan program secured by Pakistan in September last year, is aimed at stabilizing the country's economy through structural reforms and fiscal consolidation.

While Pakistan’s authorities say macroeconomic indicators have improved in recent months, they view the IMF support as critical for sustaining gains and transitioning toward growth.

Some analysts also linked the improved investor confidence to what they described as a gradually easing geopolitical situation between India and Pakistan.

"Stocks staged sharp recovery as investor eye de-escalation in Pakistan-India tensions after US appeal for end to violence," Ahsan Mehanti, the Chief Executive Officer of Arif Habib Commodities, told Arab News.

Raza Jafri, the head of Intermarket Securities, said any de-escalation could extend the positive stock market trend.

"Institutional value buying, especially in blue-chip high dividend yielding stocks, saw the KSE100 rebound today," he added.

Tensions between India and Pakistan spiked this week after New Delhi launched missile strikes on multiple locations in Pakistan, blaming Islamabad for a deadly April 22 attack in Indian-administered Kashmir that killed 26 tourists. Pakistan has denied involvement.

The crisis triggered a 12 percent decline in the Pakistani market from April 23 to May 8.

The geopolitical unrest posed a major challenge for Prime Minister Shehbaz Sharif’s efforts to stabilize the economy, which depends on a number of factors including increased foreign investment, exports and revenue generation.


Pakistan’s remittances hit record $31.2 billion in current fiscal year, led by Saudi inflows

Pakistan’s remittances hit record $31.2 billion in current fiscal year, led by Saudi inflows
Updated 09 May 2025
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Pakistan’s remittances hit record $31.2 billion in current fiscal year, led by Saudi inflows

Pakistan’s remittances hit record $31.2 billion in current fiscal year, led by Saudi inflows
  • PM Sharif praises overseas Pakistanis for supporting the country’s economic recovery
  • Central bank projects remittances to reach $38 billion by end of current fiscal year

KARACHI: Prime Minister Shehbaz Sharif on Friday lauded the contribution of overseas Pakistanis as workers’ remittances surged to a record $31.2 billion during the first ten months of the current fiscal year, with Saudi Arabia emerging as the top source of inflows.

According to data released by the State Bank of Pakistan (SBP), remittances rose by 30.9 percent during July-April FY25 compared to $23.9 billion received in the same period last year.

In April alone, Pakistan received $3.2 billion, showing a 13.1 percent year-on-year increase. The inflows were mainly sourced from Saudi Arabia ($725.4 million), United Arab Emirates ($657.6 million), United Kingdom ($535.3 million) and the United States ($302.4 million).

“Prime Minister Shehbaz Sharif expressed satisfaction over a 31 percent increase in remittances during the first 10 months of fiscal year 2025 compared to the previous year,” a statement issued by his office said.

“Remittances reaching a record level is a reflection of the confidence of overseas Pakistanis in government policies,” it quoted him as saying.

Remittances form a vital pillar of Pakistan’s external sector, helping stabilize the current account, fueling domestic consumption and easing the country’s reliance on external borrowing.

Earlier this year, in March, the SBP recorded an all-time monthly high of $4.1 billion in remittance inflows, driven by seasonal factors and improved formal channel usage.

Pakistan has focused on boosting exports and remittances in recent years as part of broader efforts to strengthen its external sector and address economic vulnerabilities.

The central bank has also revised its FY25 remittance projection upward from $36 billion to $38 billion, citing current trends.
 


‘A revolution in the way people travel’ — Saudi aviation industry soaring with sky-high ambition

‘A revolution in the way people travel’ — Saudi aviation industry soaring with sky-high ambition
Updated 09 May 2025
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‘A revolution in the way people travel’ — Saudi aviation industry soaring with sky-high ambition

‘A revolution in the way people travel’ — Saudi aviation industry soaring with sky-high ambition

RIYADH: Increased technology integration and greater connectivity over the next five years will see Saudi Arabia cement its position as a global aviation hub, experts have told Arab News.

In a comprehensive assessment of the Kingdom’s air sector, analysts and industry insiders have set out how investment in infrastructure, the roll out of new airlines, and a focus on sustainability will see Saudi Arabia reach its Vision 2030 goals.

The Kingdom is targeting handling 330 million passengers annually across 250 destinations by the end of the decade, as well as  transporting 4.5 million tonnes of cargo.

The industry laid the groundwork for this growth in 2024, achieving record-breaking results with the 94 million passengers transported representing  a 15 percent year-on-year increase, alongside a 10 percent rise in flight activity, and a 52 percent boost in air cargo, to reach nearly 1 million tonnes.

The International Air Transport Association’s Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi told Arab News that the Kingdom is preparing for the aviation sector to play an even bigger role in its future. 

“Over the next five years, we expect continued development in digitalization and connectivity, and for Saudi Arabia to be in an even stronger position as a global hub, driving economic and social growth for the Kingdom,” he said.

Al-Awadhi also emphasized that the nation’s regulatory reforms and commitment to sustainability will be key factors in attracting international airline partnerships and investment. 

He added: “GACA’s (the General Authority of Civil Aviation) revision of its charging scheme, to make Saudi airports more competitive in the region, is a positive step, now and for the future. As is its establishment of an independent economic regulatory framework.”

The top official noted that Saudi Arabia is the first country in the Middle East and North Africa to do this, and encouraged others to follow.

Riyadh Air — a portal to the Kingdom

A key development in the sector is the highly anticipated debut of Riyadh Air, Saudi Arabia’s new full-service airline, set to launch in 2025. 

The company has made significant strides in preparation for its release, including major aircraft acquisitions, strategic alliances, and technological investments.

Mark Bothorn, principal of innovation practice at Arthur D. Little Middle East, highlighted that the launch of Riyadh Air is a “watershed moment for Saudi Arabia’s aviation sector — an event of this scale and significance happens perhaps once a decade.”

He added: “As a full-service national flag carrier, Riyadh Air will not only enhance domestic connectivity but also position the Kingdom’s capital as a major global aviation hub.”

Bothorn further anticipated that the new national carrier would serve as an ambassador for Saudi Arabia, embodying the nation’s vision through cutting-edge design, unparalleled guest experience, and world-class connectivity. “The way the world perceives Riyadh will, in many ways, be shaped by the experiences this airline delivers,” he added.

Mark Bothorn, principal of innovation practice at Arthur D. Little Middle East. Supplied

The airline has ordered 60 Airbus A321neo jets, with plans for additional wide-body aircraft this year. It has secured agreements with Singapore Airlines, Air China, and Delta Air Lines to enhance interline connectivity, codeshare operations, and frequent flyer benefits.

Riyadh Air is collaborating with Artefact to develop an advanced data analytics platform that aims to offer hyper-personalized services and seamless digital-first experiences. Its initial routes will connect Saudi Arabia to major cities in Europe, North America, and Asia, enhancing its international connectivity.

Riyadh Air plans to connect with more than 100 cities by 2030. Shutterstock

The Kingdom’s existing airlines are also undergoing significant transformations to cater to the growing demand and enhance international reach. 

Saudia has placed a historic $19 billion order for 105 Airbus A320neo aircraft to expand its fleet, set for delivery starting in 2026.

Additionally, the airline is enhancing its maintenance and repair capabilities through a partnership with Air France-KLM. Flyadeal, Saudia’s budget airline, aims to double its fleet to 100 aircraft by 2030, offering affordable travel options across domestic and regional routes.

Flynas, the region’s top low-cost airline, secured a 280-aircraft deal, including Airbus A320neo and A330neo models, to support its aggressive expansion strategy. The airline also introduced new routes connecting Saudi Arabia to Africa and Europe.

Bothorn commented on the impact of heightened market contenders, saying: “Increased competition is always a catalyst for innovation and improvement, and in Saudi Arabia’s aviation sector, it will lead to two transformative outcomes.”

First, enhanced connectivity will strengthen Riyadh’s position as a global business hub by providing seamless access to international markets through more flights and improved routing.

Second, Riyadh Air, unburdened by legacy systems, has the potential to redefine air travel, setting new benchmarks in passenger experience and efficiency, according to Bothorn.

Airport infrastructure soars 

To handle the volume that new airlines will be attracting, Saudi Arabia is investing heavily in airport infrastructure. 

King Salman International Airport in Riyadh is set to become one of the world’s largest airports, with ongoing developments led by global firms including Foster & Partners and Jacobs Engineering. The airport will increase its capacity to accommodate 120 million passengers by 2030.

King Khalid International Airport’s expansion includes upgrades to Terminals 1 and 2, increasing capacity to 14 million passengers annually. Saudia’s deal with German aerospace company Lilium NV will introduce 50 electric vertical takeoff and landing jets, making it the first airline in the region to invest in sustainable air travel.

Bothorn emphasized the impact of airport infrastructure advancements. “For many travelers, the airport experience is often the most stressful part of a journey — navigating terminals, dealing with security bottlenecks, and enduring long waits.”

He added: “A seamless integration between the airport and airlines can dramatically transform this, replacing frustration with efficiency and even moments of delight.”

Bothorn envisioned airports that proactively anticipate passenger needs, with real-time updates enabling travelers to relax in lounges or dine rather than wait at gates.

An impression of how King Salman International Airport will look when construction is completed. File

Investment turbines spin

Saudi Arabia’s business aviation sector is thriving, driven by an influx of high-net-worth individuals and economic expansion. The sector, valued at $1.2 billion in 2023, is expected to grow at an annual rate of 8.88 percent from 2025 to 2029.

GACA is further boosting this sector by removing restrictions on foreign on-demand charter flights, allowing international operators to enter the domestic private aviation market starting in May.

Infrastructure and transportation developments outlined in the 2025 Saudi budget report reinforce these aviation ambitions. The gross domestic product of the transportation and logistics sector grew by 6.4 percent in the first half of 2024.

Total investment contracts signed in this sector amounted to over SR200 billion ($53.3 billion). Saudi Arabia has also strengthened its global presence by securing key positions in international aviation organizations, including hosting the UNCTAD Global Supply Chain Forum in 2026 and chairing the Executive Council of the Arab Civil Aviation Organization.

To enhance aviation services, the Kingdom has looked to implement modern and eco-friendly transportation initiatives during the Hajj season, including self-driving taxis, smart delivery vehicles, and increased aircraft seat capacity for pilgrims. Performance-based operations and maintenance contracts have been executed to enhance asset management efficiency.

Plans for 2025 include SR42 billion allocated for the infrastructure and transportation sector, which will witness the launch of several travel lounges across international airports, licensing new national air carriers, and expanding public bus networks to improve intercity and regional connectivity.

Al-Awadhi of IATA further elaborated on the nation’s role in shaping global aviation policies. “Many countries in the region look to Saudi Arabia for developing their aviation sectors, so the Kingdom plays an important role in shaping regional policies.”

Recent work revamping economic regulation related to consumer protection, safety and security has been followed by other countries in the region, according to the top official.

“We’re stronger as an industry when standards are aligned, not just regionally but globally,” he added.

Private jets and Saudi Arabia’s aviation roadmap

Saudi Arabia has made developing the private aviation market a key part of its roadmap for the sector, with the charter and corporate jet segments being supported by infrastructure upgrades such as six new general aviation airports.

The sector’s growth aligns with Vision 2030’s diversification efforts, particularly in tourism and entertainment, with destinations like AlUla and the Red Sea International Airport, capable of handling 1 million tourists annually, driving demand. 

During 2024’s Future Aviation Forum, GACA unveiled a roadmap aimed at increasing the general aviation sector’s contribution to GDP, targeting a tenfold growth to reach $2 billion by 2030. The plan encompassed the business aircraft sector, including private charter flights and corporate aviation.

Sustainability is another focus, with GACA’s plan targeting net-zero emissions by 2060 through initiatives such as sustainable aviation fuel and AI-driven efficiency optimizations. However, challenges, including limited sustainable aviation fuel supply, remain. 

The International Air Transport Association’s Regional Vice President for Africa and the Middle East Kamil Al-Awadhi. Supplied

Sustainable skies ahead

IATA’s Al-Awadhi highlighted the recent deal between Red Sea Global and daa International to introduce sustainable aviation fuel at Red Sea International Airport as “a positive step for Saudi Arabia and the region” when it comes to developing a more ecologically friendly sector.

The 35 percent SAF blend, supplied by Arabian Petroleum Supply Co., reduces aircraft emissions by up to 35 percent per flight, aligning with RSG’s broader sustainability efforts, including 400 megawatt-peak of solar installations and plans to plant 50 million mangroves by 2030.

The airport, operational from 2023 and with international flights beginning in 2024, serves the growing Red Sea destination, set to feature 50 resorts by 2030.

The next five years will bring transformative benefits for travelers flying to and from Saudi Arabia. Expanded airline networks will improve connectivity, reduce layovers, and increase travel convenience.

The rise of low-cost carriers like flyadeal and flynas means more budget-friendly flights for domestic and international routes. AI-driven services, biometric security checks, and world-class airport infrastructure will streamline travel, making it more efficient and comfortable.

“Expect nothing short of a revolution in the way people travel,” Bothorn said. He explained that long queues at security and immigration, endless gate waits, and the anxiety of either rushing through the airport or arriving far too early “will become relics of the past.” He projected air travel to become more intuitive and enjoyable.

Al-Awadhi added that Saudi Arabia is investing heavily in digital processing of passengers and integrating latest technologies at airports. 

“We can certainly expect better passenger experience and customer service,” he said, adding: “Airlines are also updating their fleets so travelers will be flying on the latest aircrafts, enjoying what new technologies have to offer. Improved connectivity will provide travelers with more choices, enhancing the overall customer experience.”

Investments in eVTOL aircraft and eco-friendly practices signal a shift toward greener aviation. Saudi Arabia is undergoing a historic transformation in its aviation sector, with massive investments, strategic expansions, and cutting-edge innovations that will redefine the travel experience.

By 2030, the Kingdom aims to be a premier global aviation hub, offering world-class connectivity, seamless air travel, and state-of-the-art airport facilities.