ACWA Power, ITOCHU Corp. sign MoU at COP29 to accelerate global clean energy transition
ACWA Power, ITOCHU Corp. sign MoU at COP29 to accelerate global clean energy transition/node/2580079/business-economy
ACWA Power, ITOCHU Corp. sign MoU at COP29 to accelerate global clean energy transition
Both companies share a vision for accelerating the global energy transition, leveraging their unique strengths to create transformative solutions in renewables and water desalination.
ACWA Power, ITOCHU Corp. sign MoU at COP29 to accelerate global clean energy transition
Updated 20 November 2024
Miguel Hadchity
RIYADH: Saudi Arabia’s ACWA Power has entered into an agreement with Japan’s ITOCHU Corp. during COP29 to strengthen investments in environmental infrastructure and renewable energy across the Middle East, Central Asia, and Africa.
As outlined in a press release, the memorandum of understanding aligns with ACWA Power’s broader mission to address the “energy quadrilemma” — ensuring energy and water are provided affordably, reliably, sustainably, and rapidly.
Both companies share a vision for accelerating the global energy transition, leveraging their unique strengths to create transformative solutions in renewables and water desalination.
Marco Arcelli, CEO of ACWA Power, expressed his enthusiasm: “We are thrilled to strengthen our strategic collaboration with ITOCHU Corp. through this new memorandum of understanding, signed at COP29 in Azerbaijan.”
He further added: “This partnership — which spans across various geographies and technologies — will benefit from our expertise in renewable energy sources, water desalination, and green hydrogen.”
Arcelli highlighted the company’s commitment to achieving net-zero emissions by 2050, a full decade ahead of Saudi Arabia’s national target, noting that it “aligns perfectly with the global sustainability agenda.”
The MoU, in collaboration with ITOCHU’s extensive network and resources, will facilitate mutual growth ambitions and open up new opportunities for Japanese investors in the clean energy sector, according to the CEO. “Together, we are poised to make significant strides in accelerating the energy transition and addressing climate change challenges,” he concluded.
Headquartered in Riyadh, ACWA Power is the world’s largest private water desalination company and a leader in renewable energy and green hydrogen. Its portfolio spans 90 projects in 13 countries, with a total investment value of $94.7 billion.
ITOCHU Corp., founded in 1858, is one of Japan’s leading multinational trading and investment companies. With operations in 61 countries and approximately 90 bases worldwide, ITOCHU boasts a diversified portfolio that includes renewable energy projects and water infrastructure.
Through this partnership with ACWA Power, “ITOCHU aims not only to contribute to regions expecting economic growth and population increases but also to achieve a balance between responding to societal needs and business expansion.”
The collaboration is expected to advance progress in renewable energy projects, including high-efficiency combined cycle power plants and green hydrogen production, with both companies dedicated to addressing climate change and advancing global sustainability initiatives.
Earlier this year, ACWA Power signed multiple agreements with Japanese companies on May 21, during the Saudi-Japan Vision 2030 Business Forum, to further the sustainable energy transition and attract foreign investment.
The forum, held in Tokyo, brought together over 300 industry officials and leaders to discuss ways to enhance trade, investment, and cultural ties.
Saudi Arabia’s labor market booming as world wakes up to its potential
Kingdom set to achieve its ambitious Vision 2030 objectives and create a dynamic, diversified workforce
Updated 08 March 2025
Nadin Hassan
RIYADH: From advanced technology to bustling tourism, Saudi Arabia is witnessing a labor market transformation that is reducing its reliance on oil and creating jobs in construction, green energy, and beyond.
Government initiatives such as the Saudi Nationalization Scheme and Nitaqat initiative have played a pivotal role in shaping the labor market landscape.
These policies have encouraged private sector employers to hire more of the Kingdom’s nationals across various industries, leading to a significant reduction in unemployment rates.
The commitment to enhancing workforce participation has also contributed to a more inclusive job market, while a strategic focus on developing a knowledge-based economy has led to increased investments in education and vocational training programs.
These initiatives are equipping the local workforce with the skills required to thrive in sectors such as advanced manufacturing, healthcare, and financial services, further accelerating employment growth.
Construction boom fuels job creation
The construction and infrastructure sector has experienced exponential growth in recent years, underpinning the Kingdom’s economic expansion, with contract awards in 2024 reaching $146.8 billion, a record high as it overtook 2023’s figure of $118.7 billion, according to Kamco Invest’s GCC Projects Market Update.
The report added that Saudi Arabia accounted for over 53.8 percent of total project awards across the Gulf Cooperation Council in 2024.
Sachin Kerur, managing partner of Middle East at Reed Smith, told Arab News that this boom is leading to a rise in the opportunities for project managers, designers, architects and many other construction professionals.
“Anyone studying Vision 2030 or visiting the important cities of the Kingdom will be very aware of the construction of large-scale housing, rail and road networks, new airports, infrastructure for major sporting events and industrial production plants,” Kerur said. Tourism-related construction has also seen a surge, with new hotels and resorts hiring more Saudi nationals. “Anyone visiting the Kingdom’s hotels of late will have noticed the number of Saudi nationals employed,” Kerur added.
Major projects such as the Rua Al-Madinah and Qiddiya are further fueling demand for skilled labor in the sector.
The Kingdom’s push to attract foreign investment has not only created job opportunities but also fostered knowledge transfer and skill development among the local workforce. (Shutterstock)
Tourism as a booster
The tourism sector continues to play a pivotal role in shaping Saudi Arabia’s labor market, and is only set to grow as the Kingdom pushes ahead with its aim to attract 150 million visitors annually by 2030. As a result, the demand for hospitality, transportation, and cultural service jobs is rapidly increasing.
“With millions of visitors anticipated to visit Saudi each year, tourism has one of the fastest growing and elastic demand for employment,” Kerur said.
From religious tourism initiatives in Makkah and Madinah to entertainment-driven projects such as the Red Sea Project, the sector’s expansion is creating thousands of jobs for Saudis.
Technology and green energy sectors see expansion
On a tech front, Saudi Arabia’s technology sector is experiencing unprecedented growth, driven by the government’s investments and incentives for global tech firms.
“Foreign investments are driving significant job creation in Saudi Arabia’s emerging industries, particularly technology and innovation, aligning with Vision 2030’s goals of economic diversification and private sector growth,” said Faisal Al-Sarraj, Saudi Arabia’s deputy country senior partner at PwC Middle East.
He continued: “PIF’s focus on technology and innovation has bolstered local employment, particularly in AI, digital transformation, and data analytics. Its support for startups and partnerships with global tech firms is strengthening local expertise.”
Initiatives such as the $100 billion AI and data analytics initiative, known as Project Transcendence, as well as smart city projects including NEOM, are fostering high-skilled employment in advanced fields.
Foreign investments are driving significant job creation in Saudi Arabia’s emerging industries.
Faisal Al-Sarraj, Saudi Arabia’s deputy country senior partner at PwC Middle East.
Citing media outlets Bloomberg and CIO, Al-Sarraj said: “This $100 billion plan positions Saudi Arabia as a global AI and data analytics hub, creating thousands of high-skilled jobs and rivaling regional tech leaders.”
The green energy sector is also taking off in Saudi Arabia, bringing a fresh wave of job opportunities and supporting the Kingdom’s sustainability goals.
Solar and wind farms are being developed across the country, creating thousands of new roles and giving locals the chance to dive into the world of clean energy.
Kerur also cited the life sciences and food industries as other sectors that have seen employment growth.
Saudi welcoming the world
The government’s Saudization initiatives, particularly the Nitaqat program which was established in June 2011, have played a crucial role in increasing the number of nationals in the private sector.
“Many commentators regard Saudization as having been most successful in the retail and tourism and hospitality sectors,” Kerur said.
He continued: “Perhaps less success has been achieved in areas such as life sciences, medicine and design and construction where more skilled resources are needed. That is certainly an area of development for the next few years.”
Moreover, the drive for greater workforce inclusion is also reflected in the increasing focus on supporting female participation in the labor market.
As more opportunities arise in flexible and remote work arrangements, women are stepping into roles across diverse sectors, contributing to the Kingdom’s broader economic transformation goals.
Figures released by the General Authority for Statistics showed that by the end of the third quarter of 2024 the labor force participation rate of Saudi females reached 36.2 percent — well above the original Vision 2030 target of 30 percent, with that goal now upped to 40 percent by the end of the decade.
Kerur added: “Saudi Arabia’s labor market reforms and initiatives are successfully reducing unemployment levels and so much credit must go to Vision 2030 as economic diversification develops at pace. However, this is not merely labour economics.”
He went on to say: “As with other GCC countries like the UAE, there are social and cultural norms that have to be assessed to ensure they are maintained whilst at the same time ensuring unemployment is minimised and the national workforce is equipped for the challenges of the next three decades.”
Regional Headquarters Initiative and FDI
One of the biggest wins for Saudi Arabia in 2024 was the success of its regional headquarters initiative, which has drawn in over 540 multinational companies to set up shop in the Kingdom.
This surge in corporate presence is not just about numbers — it is about turning Saudi Arabia into a thriving business hub, buzzing with new ideas and opportunities.
Companies such as Amazon, Google, PwC, and Deloitte have relocated their regional headquarters, leading to job creation in professional services, consulting, and administrative roles.
“This achievement is having an employment impetus as more and more companies are employing Saudi nationals in line with the Kingdom’s status as a developing business hub,” Kerur said.
The Kingdom’s push to attract foreign investment has not only created job opportunities but also fostered knowledge transfer and skill development among the local workforce.
With multinational firms bringing global best practices and expertise, Saudi nationals are gaining invaluable exposure to international business operations, positioning them competitively in the job market.
Another key initiative was the Golden Visa, which allows foreign nationals to live, work, and own property in the Kingdom without a sponsor,
In order to qualify, applicants must meet specific criteria such as significant investments in real estate or business ventures.
Al-Sarraj said the visa “incentivized” highly skilled professionals and entrepreneurs to relocate to Saudi Arabia, and has expanded employment in sectors such as healthcare, education, and technology, and fostered a knowledge-based economy.
He added: “Reforms like the Labor Reform Initiative improved mobility and flexibility for expatriates, making Saudi Arabia a more attractive job market. This policy also encouraged Saudization, driving the hiring of skilled nationals.”
Challenges and the road ahead
Despite the progress, challenges remain in bridging skill gaps and positioning manual labor or skilled trades as a viable career path for Saudis.
“Education and training will be vital all round for the labor market. Indeed more labor capacity is required to implement Vision 2030 projects and this provides Saudi nationals a significant opportunity to develop blue collar skills,” Kerur said.
He continued: “Of course the private sector, both national and international, will have a key role to play to train, develop and employ nationals. The issue will be the stick or the carrot.”
Kerur further explained that the private sector in Saudi Arabia will require support and assistance, particularly in areas where their capacity to operate or expand is currently limited, and where significant financial investment is needed.
“Saudi Arabia has shown a willingness to enable public private partnership in their labor market and more will be expected in this regard,” he said.
According to Al-Sarraj, one of the key issues is that many workers may not have received the necessary training and or hold the qualifications required by employers.
“Despite significant progress, challenges remain, including skill gaps among the workforce, the need for enhanced educational and vocational training programs, and ensuring sustainable employment opportunities for the growing local population,” he said.
Al-Sarraj added: “Employers often cite skill gaps and higher wage expectations as reasons for not hiring Saudis, highlighting the need for enhanced educational and vocational training programs.”
As Saudi Arabia’s labor market continues to evolve, the combined impact of strategic government initiatives, foreign investment, and workforce development efforts will be key to sustaining momentum.
With significant achievements in 2023 paving the way, the Kingdom is well-positioned to achieve its ambitious Vision 2030 objectives and create a dynamic, diversified workforce that meets future economic demands.
Saudi riyal symbol: strategic step toward global financial standing
New symbol signals Kingdom’s commitment to align its financial practices with international standards
Updated 08 March 2025
MOHAMMED AL-KINANI
JEDDAH: Saudi Arabia’s unveiling of a new symbol for the riyal has been dubbed a “visionary maneuver” that will enhance the currency’s global recognition, strengthen investor confidence, and signal a commitment to financial modernization, Arab News has been told.
As the Kingdom seeks to position itself as a global financial hub, this new symbol, inspired by Arabic calligraphy, reflects a seamless blend of tradition and progress — key to the nation’s ongoing economic reform efforts, according to experts.
It was announced on Feb. 20 that the symbol had been approved by King Salman, a move dubbed as marking “a new chapter in the evolution of our national currency” by the Saudi Central Bank.
The symbol, which blends Arabic calligraphy with the name of the national currency, will be used in financial and commercial transactions both within the Kingdom and internationally.
According to the central bank, also known as SAMA, the symbol will be rolled out immediately, with its integration into financial and commercial transactions, as well as various applications, occurring gradually in coordination with relevant entities.
Tamer Al-Sayed, chief financial officer at FII (Future Investment Initiative) Institute, told Arab News the timing aligned with Saudi Arabia’s Vision 2030-driven economic transformation to become a global financial hub.
“This announcement comes at a time when the world is facing economic volatility — rising inflation, shifting interest rates, and evolving global trade dynamics. In such an environment, having a distinct and recognizable currency identity is more important than ever,” he said.
In response to a question about how the new symbol might impact its recognition and credibility in global financial markets, Youssef Saidi, a research fellow at the Economic Research Forum and former senior economic adviser at the Gulf Monetary Council, said that the introduction of the symbol was a “visionary maneuver.”
He added that a modern symbol could present Saudi Arabia as a forward-thinking nation, positively influencing both the country’s image and the perception of its currency globally.
This could increase investor confidence in the Saudi market, potentially leading to greater foreign direct investment.
Youssef Saidi, research fellow at the Economic Research Forum
For foreign investors, Saidi said, the introduction of a new symbol may signal Saudi Arabia’s commitment to aligning its financial practices with international standards. “This could increase investor confidence in the Saudi market, potentially leading to greater foreign direct investment,” he said.
Saidi noted that a single, recognizable symbol would streamline monetary transactions, reduce errors, and boost global awareness of the Saudi riyal.
“Just as the dollar, euro, and yen are instantly recognizable, a unique symbol design for the Saudi riyal, ingeniously inspired by authentic Arabic calligraphy, could help it stand out in financial documents, trading platforms, and media coverage,” Saidi added.
FII Institute’s Al-Sayed agreed, stating that the symbol comes as Saudi Arabia is making significant investments in its financial infrastructure, from digital payment systems to foreign investment attraction.
“A strong, well-defined riyal symbol reinforces these efforts, signaling economic stability and modernization to global investors,” Al-Sayed said. Commenting on incorporating Arabic letters in the design, the FII Institute official emphasized that this was an important point because the use of the calligraphy is more than just an artistic choice — it’s a message.
“Saudi Arabia has always played a central role in the Arab and Islamic world, and its leadership understands that its identity is not separate from its economic growth,” he said.
Al-Sayed noted that using Arabic script in the riyal’s symbol is a statement that modernization does not mean abandoning tradition.
“In fact, the most successful economies balance heritage with progress. Take Japan, for example — it leads in global innovation while maintaining its cultural identity. Saudi Arabia is following a similar path, blending financial modernization with deep-rooted traditions,” he added.
He further said that the new riyal symbol is not just a visual element, claiming that it is a declaration that Saudi Arabia’s financial identity is “here to stay — both locally and globally.” Asked how the symbol can help Saudi Arabia strengthen its position on the global economic stage, Al-Sayed said that the world was moving toward a more digital and borderless economy and currencies were no longer just physical notes. “Currencies are financial identities recognized across global markets, digital transactions, and potential future digital currencies,” he added.
A strong, well-defined riyal symbol reinforces these efforts, signaling economic stability and modernization to global investors.
Tamer Al-Sayed, chief financial officer at FII Institute
Al-Sayed noted that a strong riyal symbol is a strategic move because it boosts global confidence in Saudi Arabia’s economy, particularly among foreign investors and financial institutions that rely on strong monetary symbols to assess stability.
He continued: “It also increases the riyal’s visibility in global trade and financial markets, potentially enhancing its role in international contracts and energy deals — an essential factor given Saudi Arabia’s influence in oil and renewable energy markets.”
Al-Sayed added that the symbol strengthens the riyal’s presence in the digital financial ecosystem, emphasizing that digital payments and the potential adoption of cryptocurrency make distinct monetary symbols increasingly important.
“This is not just a branding exercise — it’s a step toward redefining Saudi Arabia’s financial standing in a rapidly changing global economy,” he said.
The Economic Research Forum’s Saidi agreed that a distinct currency symbol had an important role to play in today’s digital and globalized economy.
Saidi pointed out that the digitalization of currencies had transformed the traditional concept of money, with currency symbols now representing both physical and digital forms of legal tender.
“In the digital economy, currency symbols aren’t just graphic representations but additionally play a pivotal part in easing trades, ensuring financial sovereignty, and affirming financial stability,” he added.
He said that the design of the new symbol highlighted Saudi Arabia’s rich cultural heritage. This not only fosters national pride and cultural affiliation but also strengthens confidence in the riyal as a stable and influential currency on the global stage.
“Domestically, the introduction of a new Saudi riyal symbol could foster a sense of national pride and unity around the currency. This could translate into greater public support for economic reforms and policies aimed at strengthening the riyal,” Saidi added.
Industry leaders drive innovation with global funding rounds
Updated 09 March 2025
Nour El-Shaeri
RIYADH: Saudi Arabia’s investment landscape continues to expand across diverse sectors, with industry leaders participating in global funding rounds, driving innovation beyond the Middle East and North Africa region.
Aramco Ventures has led a $30 million Series A funding round for US-based climate tech startup Spiritus, joined by Khosla Ventures, Mitsubishi Heavy Industries America, and TDK Ventures.
The investment will help Spiritus scale its direct air capture technology, designed to reduce carbon emissions from data centers and industrial construction without slowing expansion.
“We’re seeing soaring demand for data centers and heavy industries, yet we can’t ignore the carbon that comes with it,” said Charles Cadieu, CEO and co-founder of Spiritus.
“Our DAC technology brings large-scale decarbonization within reach. This funding advances our vision of supporting America’s explosive growth while keeping emissions in check,” he added.
SC Ventures has signed a memorandum of understanding with Visa to develop digital solutions for SMEs across the MENA region.
Bruce Niven, executive managing director of strategic venturing at Aramco Ventures, said that direct air capture has the potential to play an important role in decarbonizing hard-to-abate sectors of the economy, but until now, it has been too expensive to be meaningful.
“Breakthrough approaches like Spiritus are needed. We are excited to partner with Spiritus and bring this important technology to market,” Niven added.
Talabat acquires Instashop from Delivery Hero for $32m
Kuwait-born and UAE-based q-commerce and food tech platform Talabat has completed the acquisition of 100 percent of Instashop from Delivery Hero SE for $32 million.
The acquisition strengthens Talabat’s grocery and retail segment while expanding its partner network across the MENA region.
Instashop, founded in 2015 by John Tsioris, will continue to operate as an independent brand under Talabat’s grocery and retail division.
The platform connects users with vendors in the UAE, Bahrain, Egypt, Lebanon and Qatar and has an annual gross merchandise volume of $300 million.
Talabat, founded in 2004, was acquired by Rocket Internet in 2015 for $170 million and operates in the UAE, Oman, Qatar, Bahrain, Jordan, Iraq, and Egypt.
SC Ventures and Visa partner to support SMEs in MENA
SC Ventures, the fintech investment and innovation arm of Standard Chartered, has signed a memorandum of understanding with Visa to develop digital solutions for small and medium-sized enterprises across the MENA region.
The partnership was formalized at a signing ceremony at the Visa Innovation Center in Dubai.
Rola Abu Manneh, CEO of Standard Chartered Middle East, UAE, and Pakistan, and Saeeda Jaffar, Visa’s senior vice president and group country manager for the GCC, highlighted their commitment to fostering SME growth in the UAE and beyond.
Breakthrough approaches like Spiritus are needed. We are excited to partner with Spiritus and bring this important technology to market.
Bruce Niven, executive managing director of strategic venturing at Aramco Ventures
LoftyInc. Capital Management secures $43m first close for Africa-focused fund
LoftyInc. Capital Management has secured $43 million in the first close of its LoftyInc. Alpha Fund, a late-seed investment vehicle targeting startups in Nigeria, Egypt, Kenya, and Francophone Africa.
The fund has attracted backing from African and international investors, including sovereign wealth funds, development finance institutions, and high-net-worth individuals.
Key investors include Egypt’s Micro, Small, and Medium Enterprises Development Agency, Tunisia’s Anava Fund of Funds, and the Dutch Entrepreneurial Development Bank, as well as Proparco with FISEA.
The International Finance Corp., AfricaGrow, the Dutch Good Growth Fund, and US-based First Close Partners were also investors.
Capital Haus acquires 11.6 percent stake in Equity Story Group
UAE-based financial concierge firm Capital Haus has acquired an 11.6 percent strategic stake in Equity Story Group Ltd., pushing its total assets under management beyond $1 billion.
The investment aligns with Capital Haus’ focus on delivering alternative wealth management solutions for high-net-worth individuals and corporate investors.
As part of the deal, Brendan Gow, founder and managing director of Capital Haus, has been appointed as an executive director on the board of Equity Story Group.
“With the UAE’s emergence as a leading global wealth hub, investors are increasingly looking for alternative asset classes, cross-border investment access, and concierge-style financial services,” the press release stated.
Egypt’s Mrkoon raises bridge funding from A Ventures
Egypt-based waste management platform Mrkoon has secured bridge funding from A Ventures, increasing the investment firm’s stake in the startup to 28 percent.
The funding will support Mrkoon’s regional expansion, with plans to enter the Gulf Cooperation Council market.
Founded in 2022 by Mohamed Shalabi, Ahmed Mamdouh, and Ahmed Amir, Mrkoon operates a business-to-business platform that enables enterprises, particularly in the industrial and manufacturing sectors, to offload surplus materials and scrap.
A Ventures, an Egypt-based investment and portfolio management firm, was established in 2024 by Sherif Ramadan and Ayman Abbas.
BILRS secures funding from Salica Spring Studios
UAE-based fintech BILRS has raised an undisclosed funding round from Salica Spring Studios, backed by Al-Waha Fund of Funds.
The investment will help the company expand its operations, enhance its technology, and grow its global reach.
Founded in 2022 by Rupert Shaw, BILRS provides international bill payment solutions, mobile top-ups, and gift cards, enabling seamless cross-border transactions in the B2B space.
The company previously secured pre-seed funding from Haatch in 2023.
Foras secures stake in crowdfunding platform Beban
UAE-based investment firm Foras has acquired a 36 percent stake in Beban, a Bahrain-based crowdfunding platform, for an undisclosed amount.
The investment aims to enhance access to capital for startups and entrepreneurs across the region.
Founded in 2022, Beban is a subsidiary of Hope Ventures and is licensed by the Central Bank of Bahrain.
The platform connects entrepreneurs with investors to drive business growth in the MENA region.
FanTV raises $3m in Series A funding
UAE-based artificial intelligence-powered content platform FanTV has secured $3 million in a Series A funding round from Mysten Labs, Cypher Capital, CoinSwitch Ventures, and Illuminati Capital.
The funding will support the company’s expansion efforts and the enhancement of its AI-driven tools for content creators.
Founded in 2022 by Prashan Agarwal, FanTV operates as a Web 3.0 content platform that allows creators to upload and monetize content based on viewership.
The company aims to scale its user base and technological capabilities globally.
MENA funding grows fivefold in Feb
Investment in MENA startups surged nearly fivefold in February, reaching $494 million across 58 deals, according to Wamda.
The sharp increase was driven by a shift from debt financing, which fell to 15 percent of total funding compared to 90 percent in January. Excluding debt, equity investments rose 371 percent month-on-month.
Saudi Arabia led with $250.3 million across 25 deals, followed by the UAE with $203.5 million from 15 deals and Egypt with $27.5 million across eight transactions. Smaller investments were recorded in Oman, Morocco, and Jordan, as well as Tunisia, Bahrain, and Qatar.
Fintech dominated with $274 million across 15 deals, followed by insurance tech with $55 million, and logistics with $28.5 million.
Marketing tech, education tech, AI, and clean tech also saw significant funding.
Later-stage rounds gained traction, with Tabby securing $160 million in Series E funding, Flow48 raising $69 million, and Applied AI closing $55 million.
Despite the funding surge, gender disparity persisted, with female-founded startups receiving just $200k — 0.04 percent of total investment — while male-led ventures secured 86.7 percent of funding.
Franchises boosting Saudi economy, as Kingdom dominates half of MENA’s $30bn market
Updated 07 March 2025
MOHAMMED AL-KINANI
JEDDAH: Franchises are proving increasingly vital to Saudi Arabia’s economic development, driving employment, government revenue, and cultural transformation in a youthful nation.
Economic experts have told Arab News that the introduction of a law in 2019, followed by expansion of regulations the following year, helped open the Kingdom up to international businesses, as well as strengthened the relationship between franchisors and franchisees.
These moves, together with the economic expansion of Saudi Arabia as part of the Vision 2030 initiative, means the Kingdom now accounts for nearly half of the $30 billion franchise market in the Middle East and Africa, according to Yaseen Ghulam, associate professor of economics at Riyadh-based Al-Yamamah University.
He told Arab News there is consensus among researchers and industry observers that franchise businesses are expected to grow by more than 20 percent per annum for the coming five years and beyond.
“This presents an exceptional opportunity for international brands to enter the Kingdom through franchising, given the fact that European and North American consumer markets are struggling due to economic uncertainty, unemployment, and higher cost of living,” Ghulam said.
He added that franchise registrations in the Kingdom stood at 1,788 by the end of the third quarter of 2024, up from just 185 three years earlier.
With 1,232 entries, the accommodation and food services sector — which includes lodging facilities, dining establishments, and enterprises associated with tourism — led the registrations, the associate professor said.
Yaseen Ghulam, associate professor of economics and director of research at the Riyadh-based Al-Yamamah University. Supplied
He added that the wholesale and retail division came in second with 689, and the transport and storage sector with 257. An important element of this development, he noted, is more widespread activity, covering almost all major cities, rather than clustered around one particular region or sector.
“With 647 franchise registrations, Riyadh has led the field, followed by Makkah with 363, and the Eastern Province with 225. According to some estimates, over 1,200 brands are available for franchising, and the franchising sector in Saudi Arabia is offering over 10,000 business opportunities.”
Ghulam noted that more than 600 international and 380 local franchise brands are present in the Kingdom, according to the Small and Medium Enterprises General Authority, known as Monsha’at.
Abdullah Al-Maghlouth, a member of the Saudi Economic Association, told Arab News that government support for SMEs through streamlined processes and a business-friendly environment has helped drive the franchise sector.
He added that the 2019 law bolstered the Kingdom’s business ecosystem, attracting local and international investments through a clear legal framework.
“The 2020 executive regulations complement this by providing a comprehensive legal environment that facilitates franchise operations and ensures guarantees for all parties involved. This enhances transparency between franchisors and franchisees, making the Saudi market increasingly appealing to investors,” Al-Maghlouth said.
Reflecting on the key factors driving growth in the sector in the Kingdom, Ghulam said Monsha’at’s Franchise Center is “aggressively advancing entrepreneurship” through different programs, such as Tomoh.
He added that trademarks are now fully protected thanks to the Kingdom’s recent successful implementation of an intellectual property rights plan, with online portals making trademark registration and protection simple and accessible.
Financial guarantees provided by the Kafalah program are also proving to be a factor in sourcing finance from local investors, Ghulam said, and he noted that the Social Development Bank has played a significant role in advancing franchising in the Kingdom.
The institution provides financing solutions ranging from SR150,000 ($40,000) to SR4 million with a maximum financing length of 8 years as part of its program to assist new franchise developments and expansion.
“Another significant step in bolstering the franchise community is the founding of the Saudi Franchise Association, the Kingdom’s first specialized association. It has worked to promote the idea and culture of business excellence since its foundation. Additionally, it has organized numerous seminars and workshops and signed various partnerships with colleges and chambers of commerce,” said Ghulam.
Arrangements are also in place in Saudi Arabia to support franchise business and provide consulting. For both domestic and international businesses, Arab Franchise Marketing Corporation provides media platforms, administrative and legal services, and new franchise opportunities. “Through useful solutions, they work with a profit system to grow the franchise market in the MENA area, especially in Saudi Arabia,” said the associate professor.
Highlighting how Saudi Vision 2030 has influenced the development of the franchise market, Ghulam said that the objectives of Saudi Arabia’s Vision 2030 are to invest in globally competitive industries, diversify the country’s economy, boost the private sector, and create jobs.
“Following this, one important economic area that is highlighted in Vision 2030 is franchising. For the success of the Vision, a comprehensive legal, regulatory, financial, and economic set up was needed and has been established for the promotion of the private sector to diversify the economy and reduce dependence on the oil sector,” he said.
The development, he added, of the basic and changed framework has indeed helped the private sector grow in the last few years.
Ghulam said that the franchising industry has greatly benefited from Vision 2030, with support mechanisms, new institutions, and financial aid serving as key enablers.
He added that investment in mega projects, sports events, and facilities has created youth employment, raised real wages, and driven demand for sectors like education, health, dining, beauty, and fitness.
This has attracted international franchisors and local investors, fueling significant growth in the sector.
Ghulam emphasized that Vision 2030 has also shifted the mindset of Saudi youth, encouraging private sector roles and self-employment through franchising, offering substantial returns on investment.
He advised foreign brands seeking to expand into the Saudi franchise market that there is significant potential in sectors such as food, retail, and education, as well as health, fitness, and sports.
“More specifically, customers are quite fond of education franchises, including both domestic and international franchises that focus on training, early childhood care, development centers, and tutoring,” Ghulam said.
He continued that Saudi Arabia’s focus on health-related industries has driven high demand for gyms, nutritious food franchises, and medical services, adding that loosened social regulations, particularly for women, and government support for regional designers have boosted the retail sector, particularly fashion.
Al-Maghlouth agreed that beyond traditional sectors like tourism, hospitality, and food, the Saudi franchise market will continue to expand into emerging fields such as technology, education, and healthcare.
“The supportive legal framework will continue to enhance market transparency and drive growth in economic activities, fostering a sustainable investment environment. This will not only benefit all stakeholders but also solidify Saudi Arabia’s position as a leading investment destination in the region.” he said.
Saudi multi-billion-dollar corporations are driving strategic investments in startup ecosystem
Kingdom’s corporations aligning with Vision 2030, say experts
Aramco Ventures, stc’s tali ventures exemplify dual approach
Updated 07 March 2025
Nour El-Shaeri
RIYADH: Saudi Arabia’s corporate venture capital arms are playing a pivotal role in driving innovation and advancing economic diversification by aligning their investment strategies with both national and corporate objectives.
Between 2020 and the third quarter of 2024, corporate investors accounted for 27 percent of the 1,361 unique investors in the Middle East and North Africa region, deploying approximately $380 million, according to a report by MAGNiTT.
Saudi Arabia saw the highest ratio, with CVC’s making up 30 percent of local unique investors.
Funds such as Aramco Ventures and stc’s tali ventures exemplify this dual-purpose approach. By leveraging their resources and expertise, these CVCs are fostering startups that align with the Kingdom’s Vision 2030 agenda while simultaneously advancing the strategic and operational goals of their parent companies.
According to Stephane Ulcakar, associate director and head of corporate and government financial services at Arthur D. Little, these funds stand out due to their scale and strategic scope.
“Aramco Ventures recently secured an additional $4 billion in funding, raising its total capital to $7 billion,” Ulcakar noted in an interview with Arab News, adding that stc has also collaborated with global players like SoftBank and the Saudi Public Investment Fund to broaden its reach.
This alignment extends to specific investment sectors. In an interview with Arab News, Arjun Singh, partner and global head of fintech at ADL, explained: “These arms — and their affiliated funds — are not just looking for the next big thing but also for startups that can integrate seamlessly into their parent companies’ operations.”
Stc’s tali ventures prioritizes fintech, artificial intelligence, and blockchain, reflecting both the nation’s and its parent company’s ambitions to champion Saudi Arabia’s digital economy.
stc Group, tali ventures, and Cohere announced a strategic collaboration in February. File
Similarly, Aramco’s Wa’ed Ventures focuses on startups that advance the Kingdom’s digital transformation while complementing Aramco’s strategic objectives.
Beyond funding, Saudi CVCs bring a distinct set of advantages to startups by leveraging industry expertise, supply chain networks, and expansive ecosystems.
Ulcakar highlighted the role of national initiatives such as the PIF’s National Development Strategy in addressing supply chain gaps and reshaping logistics.
Startups backed by these CVCs gain access to infrastructure and pilot programs within large ecosystems, which help refine their offerings.
“Certain well-known national players have partnered with startups to integrate advanced technologies into their supply chain operations, testing solutions like automation and predictive analytics,” Ulcakar stated.
Singh emphasized how this approach accelerates innovation, particularly in regulated industries like fintech and healthcare.
“Startups backed by corporate investors show stronger performance, as these partnerships can significantly accelerate regulatory approval processes and market entry,” he said.
Saudi National Bank’s venture capital arm is an example of an organization enabling fintech startups to scale efficiently by offering regulatory navigation support and access to a large customer base, he added.
“The Saudi VC market is undoubtedly burgeoning, with abundant demand for bankable capital and distinct funding and technical advantages brought by various players on the supply side,” Ulcakar said.
The market’s maturation is evident, with funding reaching $987 million in 2022, and CVCs accounting for 32 percent of all deals — a significant rise from less than 15 percent in 2018.
This growth is not limited to Aramco and stc — banks including SNB Capital, Riyad Bank and SAB are emerging as key players, further diversifying the funding landscape.
Additionally, Saudi Venture Capital continues to act as a catalyst for the ecosystem, having deployed over SR3.4 billion ($905.7 million) through direct and indirect investments.
This has propelled Saudi Arabia to capture the highest share of total VC funding in the MENA region, reaching 54 percent in the first half of 2024, up from 38 percent during the same period in 2023.
The Kingdom’s VC ecosystem is marked by a collaborative dynamic between corporate and traditional VCs.
Singh highlighted that “87 percent of CVC-backed deals in 2022-23 included traditional VC participation.”
This high rate of co-investment reflects a complementary relationship, where both types of investors contribute to building a more sophisticated, institutionalized ecosystem.
Singh noted that this coordinated evolution spans multiple sectors and is essential to creating a sustainable innovation landscape aligned with Saudi Arabia’s Vision 2030.
Looking ahead, the key question is how this ecosystem will consolidate further, potentially positioning the Kingdom as a global private capital hub.
“The diversity of approaches — from direct CVC arms to partnerships with established VC firms — demonstrates the market’s growing maturity and suggests a sustainable growth trajectory,” Ulcakar stated.
This progress is a critical component of the Kingdom’s strategy to establish itself as a leader in technology and innovation.
In sectors such as energy and logistics, Saudi Arabia’s CVCs are playing a pivotal role in driving innovation.
Ulcakar explained that the Kingdom is leveraging its global footprint to balance present needs with future aspirations.
Investments in fossil fuel infrastructure, for example, are complemented by efforts to localize electric vehicle technologies and pioneer nuclear fusion projects. These investments often blend incremental improvements with disruptive technologies, creating a dual pathway for transformation.
CVC arms are distinctive in their dual mandate to achieve financial returns while pursuing strategic objectives for their parent companies.
This dual focus shapes their investment and risk management philosophies, setting them apart from independent venture capital firms.
Singh said: “Unlike traditional VCs, which prioritize financial exits and short-term gains, Saudi CVCs often adopt a longer-term, patient capital strategy.”
This approach allows them to align their investments with their parent companies’ strategic goals, even if such opportunities involve higher initial risks or extended timelines.
For instance, Aramco Ventures invests in clean energy and carbon capture technologies, aligning with the parent company’s energy transition and sustainability goals.
These investments represent long-term bets with strategic implications, demonstrating a willingness to prioritize alignment with corporate objectives over immediate financial returns.
Similarly, tali ventures focuses on digital innovation while reinforcing stc’s leadership in telecommunications and digital services.
By investing in startups, tali ventures not only targets financial returns but also strengthens stc’s digital payments ecosystem, creating synergies that benefit the parent company’s broader ambitions.
Singh highlighted this dual approach as a key differentiator, noting that these capabilities enable Saudi Arabia CVCs to pursue opportunities that might otherwise be deemed too risky by independent VCs.
Ulcakar emphasized the nuanced nature of this approach. “The ability to generate both financial and strategic returns represents a unique advantage and a complex challenge in this growth market. There is no one-size-fits-all answer,” he said.
Ulcakar also noted that Saudi Arabia is one of the few growth markets that has successfully financed its own development, with investor preferences gradually evolving.
“We observe a gradual shift toward prioritizing financial returns over strategic ones, aligning with the Kingdom’s evolving investment goals,” he added.
