PIF and stc Group strike deal to create region’s premier telecom tower company
Updated 22 April 2024
Arab News
RIYADH: A new telecommunications infrastructure firm is set to be created after Saudi Arabia’s Public Investment Fund acquired a 51 percent stake in one of stc Group’s companies.
PIF will merge Telecommunication Towers Co., also known as TAWAL, with Golden Lattice Investment Company – in which the soveriegn wealth fund holds a majority shareholding – into a new entity.
With an estimated 30,000 mobile tower sites and projected annual revenues nearing $1.3 billion, the new body is expected to emerge as a global telecommunication powerhouse.
The combined new firm will be owned 54 percent by PIF and 43.1 percent by stc Group, with GLIC minority shareholders owning the remaining issued share capital.
Raid Ismail, head of MENA Direct Investments at PIF, hailed the accord as a monumental stride in Saudi Arabia’s telecommunications narrative.
He said: “By bringing together the assets of GLIC and Tawal, we will establish a consolidated platform on which the telecommunications sector can flourish and give people a better experience to best connect communities and businesses.”
Ismail emphasized the pivotal role of robust connectivity in propelling societal and economic growth.
The Group Chief Investment Officer of stc Group, Motaz Alangari, explained that the deals mirror the firm’s commitment to sustainable growth.
Alangari said: “These agreements are part of stc Group’s continuous endeavor to grow and maximize value in the most sustainable manner by recycling capital while retaining ownership in strategic value-added assets to benefit from the return on these assets and enable expansion into new domains.”
The consolidation of Tawal and GLIC, Alangari highlighted, is a “stepping-stone to consolidating the Saudi tower market and driving further efficiencies and operational excellence to deliver superior experiences and value for customers.”
According to the statement, the unified entity is set to revolutionize consumer experience and network coverage, amplifying connectivity and mobile internet speeds across Saudi Arabia.
Operational efficiencies will be underpinned by a drive for innovation, fostering a dynamic telecommunication sector internationally.
Additionally, the partnership between these entities is expected to generate synergistic effects, fostering an even more favorable business environment and propelling economic growth.
The agreements underscore PIF and stc Group’s resolve to fortify Saudi Arabia’s telecommunication infrastructure sector, unlocking its latent potential.
This endeavor builds on Tawal’s recent acquisitions in Bulgaria, Croatia, and Slovenia, cementing its status as the region’s preeminent independent tower company.
Further showcasing its leadership position, stc Group was awarded the title of the top workplace in Saudi Arabia by the professional networking platform LinkedIn earlier in April.
Tabuk’s business journey — a navigation of growth and vision
Tabuk has ambitious plans for further development, growth, and economic diversification
Updated 6 sec ago
Reem Walid
RIYADH: A young workforce, strong demand and attractive tourist offerings are helping transform Tabuk into one of Saudi Arabia’s most dynamic regions.
Earlier in March, the area’s mayor, Hussam bin Muwafaq Al-Youssef, talked up the investment potential of the region during a speech as part of the “Chamber’s Diwaniya” events during Ramadan.
Addressing business leaders, he said the municipality has over 120 available investment prospects across different sectors, including large, medium and small-scale projects.
He highlighted some of the region’s competitive advantages, such as manufacturing, agriculture, mining, energy and tourism, which have contributed to boosting Tabuk’s investment appeal.
Al-Youssef’s comments came after a stellar 2024 for Tabuk, which saw significant achievements in its business landscape, such as the launch of Sindalah island in NEOM and the inauguration of Nujma, a Ritz-Carlton Reserve, in the Red Sea.
Global engagement was amplified through events such as the Tabuk Toyota Rally, and efforts were also directed towards enhancing infrastructure.
Tabuk’s business journey
Nicholas Nahas, partner at Arthur D. Little, Middle East, said the region has worked to raise its profile in the business world by expanding output and leasing agreements in the Tabuk industrial city.
“It also advanced on its plans to upgrade key infrastructure, including Tabuk airport, which increased flight operations by 25 percent, bringing more people to the region to increase tourism and economic activity,” he added.
Ian Khan, a technology futurist and author, shed light on how Tabuk has benefited benefited from the Saudi government’ funding the Saudi government to highlight the region’s forward-thinking strategies and commitment to growth.
“The Ministry of Investment’s identification of nearly $13.3 billion in investment opportunities speaks volumes about Tabuk’s bold vision — particularly in renewable energy, agriculture, tourism and entrepreneurship. These sectors position Tabuk as a burgeoning hub along the Red Sea, primed to attract future-focused ventures and travelers alike,” Khan told Arab News.
Wadi Al-Disah in the Tabuk region is one of the most famous valleys in western Saudi Arabia. (Shutterstock)
He added that the Roads General Authority “truly accelerated” Tabuk’s connectivity by developing over 8,000 km of new networks and constructing more than 200 bridges.
“These roads and bridges don’t just help people get from A to B — they connect Tabuk to key mega-projects like NEOM, Amaala, and the Red Sea,” Khan said, adding: “This synergy multiplies Tabuk’s commercial, touristic, and social opportunities, creating a dynamic ecosystem where innovation thrives.”
The author went on to say one of the most exciting recognitions for Tabuk came in April 2024, when the World Health Organization designated the region as a “Healthy City.”
He said: “This honor underscores Tabuk’s unwavering dedication to enhancing residents’ quality of life through robust health and environmental initiatives, setting a powerful precedent for future urban development in the Kingdom.”
Tabuk’s plans
Tabuk has ambitious plans for further development, growth, and economic diversification in tourism, information and communications technology, agriculture and renewable energy.
From ADL’s point of view, Nahas explained that in the tourism sector, even with NEOM, Red Sea and Amaala opening up their first attractions, Tabuk still has much to offer.
“The region includes many heritage sites, including the ‘Saudi Grand Canyon,’ an area between Hisma Mountains and Qaraqir Valley, with offerings ranging from sun and sand to adventure sports to culture,” he said.
“The region has 27 hotels and 60 furnished apartments, accounting for almost 4,000 available rooms. To successfully navigate its journey, Tabuk should continue attracting tourists to maximize occupancy while increasing hotel and hospitality supply.”
Beyond tourism, the Tabuk province will also contribute to the ICT and renewable energy sectors.
Tabuk’s strides mirror the exact ethos of Saudi Vision 2030 — resilience, diversification and boundary-pushing innovation.
Ian Khan, technology futurist and author
NEOM, which positions itself as a cognitive city, offers unparalleled connectivity for doing business and will enable advanced technologies, including self-driving vehicles and augmented reality/ virtual reality experiences, according to Nahas.
“NEOM’s ambition will fuel the province’s ICT ambition and will contribute to the country’s overall innovation ambitions. In the renewable energy sector, due to Tabuk’s extensive natural resources of sun and wind, Tabuk will offer opportunities for photovoltaic power plants and coastal wind farms,” added Nahas.
Similarly, Khan said Tabuk was not slowing down as it looked ahead, citing international investment forums and a new logistics hub as moves that will turbocharge Tabuk’s status as a prime destination for global investors.
The author added: “On the tourism side, Tabuk Investment & Tourism launched four subsidiary companies in January 2024, focusing on hospitality, facility management, events and eco-friendly services. These ventures exemplify how Tabuk is pairing world-class hospitality with sustainability — perfectly in line with the overarching goals of Saudi Vision 2030.”
Khan believes that Tabuk’s “multi-pronged roadmap” — ranging from health initiatives to tourism and tech — reflects a future-focused mentality, anchored firmly in the transformative power of Saudi Vision 2030.
“It’s not just about building roads or eco-friendly hotels; it’s about shaping a legacy that will define the Kingdom’s next chapter. And from my vantage point as a futurist, Tabuk’s story is just getting started,” he said.
Tabuk — a key player in economic diversification
Unlocking these opportunities will require private and foreign investment, along with strong collaboration across the region’s stakeholders to fully realize the region’s potential and ensure an integrated approach to infrastructure and promotion.
Nahas from ADL said that according to the Saudi Ministry of Investment, SR40 billion ($13.3 billion) of investment opportunities remained available.
It is certainly becoming easier for speculators to visit the region, which boasts three airports; Tabuk International, NEOM Bay and Al Wash Airport connect it to key international destinations such as Dubai and Cairo, as well as local hubs including Riyadh and Madinah.
FASTFACT
Tabuk has over 120 available investment prospects across different sectors, including large, medium and small-scale projects.
From ADL’s perspective, these airports will need to continue to expand operations and connectivity to bring people to the region.
“Connectivity by road and sea will also be important. Tabuk boasts one of the region’s most connected road networks, which (is) further being upgraded to accommodate the region’s economic development for the movement of people and goods,” Nahas said.
He added that promoting the region would also require an integrated approach across its development clusters and, in addition to the Saudi Tourism Authority, it would also need to work closely with destination management companies and marketing organizations.
“These stakeholders will be able to coordinate, promote, and sell Tabuk’s rich portfolio of offerings in an integrated portfolio to the world. These initiatives will further raise Tabuk’s status as a business and tourism destination for the world, in 2025 and beyond,” said Nahas. From Khan’s point of view, Tabuk’s strides mirror the exact ethos of Saudi Vision 2030 — resilience, diversification and boundary-pushing innovation.
“By harnessing its abundant sunlight and wind resources, Tabuk is doubling down on renewable energy projects that support the national objective of generating 50 percent of electricity from renewables by 2030. This is not just an energy strategy; it’s a blueprint for building a sustainable, future-ready economy,” he said.
Khan stressed that by attracting substantial foreign investment, NEOM broadens Tabuk’s economic base and unlocks new possibilities across construction, tech and services.
“Moreover, the University of Tabuk is nurturing a new generation of disruptors and innovators. By offering specialized programs in engineering, computer science, health sciences and business administration, the university ensures that Tabuk’s workforce is prepared to sustain this wave of progress across multiple industries,” he said.
How Saudi Arabia is engineering a water-secure future
KSA is leveraging advanced technologies to drive long-term sustainability and operational efficiency
Updated 12 min 31 sec ago
MOHAMMED AL-KINANI
JEDDAH: Saudi Arabia is tackling water scarcity with bold steps toward a sustainable future. Through its National Water Strategy and Vision 2030, the Kingdom is pioneering solutions to ensure long-term water availability.
Investing in desalination, wastewater reuse, and smart water management, Saudi Arabia is transforming the sector.
The National Water Co. supports Vision 2030 by accelerating projects, improving infrastructure, and implementing digital water management for sustainability.
Water sustainability strategy
Hany Labib, chief operating officer of international consulting and engineering organization Dorsch Middle East, told Arab News that Saudi Arabia’s structured approach to water sustainability ensures that security of the natural resource remains central to national development.
“The National Water Strategy and Vision 2030 have created a framework that balances infrastructure expansion, regulatory reforms, and advanced water management practices to address the Kingdom’s water scarcity challenges,” he said.
Labib noted that a key pillar of this strategy is investing in water infrastructure, highlighting his company’s partnership with Saudi Arabia’s NWC to oversee 253 projects, enhancing efficiency and service delivery.
“These projects are designed to reinforce water distribution networks, improve wastewater treatment, and ensure long-term water reliance and a positive customer experience,” he added.
Public awareness campaigns underscore conserva-tion’s importance amid climate pressures and population growth.
Adham Sleiman, water utilities expert at Kearney MEA
Another key initiative is Saudi Arabia’s focus on optimizing resource use by reducing water losses and maximizing wastewater reuse.
“With a considerable investment, this key initiative is not just addressing immediate water demands but also ensuring the sustainability of resources for future generations. By aligning sustainability goals with economic and environmental objectives, Saudi Arabia is setting a benchmark for comprehensive water management strategy within the region,” said Labib.
Smart water tech push
Saudi Arabia is leveraging advanced technologies to drive long-term sustainability and operational efficiency in the water sector.
Labib highlighted future technologies shaping Saudi Arabia’s sustainability and efficiency goals, noting the Kingdom’s leadership in smart water management solutions.
“With a growing number of water and wastewater projects in motion, technology is playing an increasingly critical role in optimizing resources, reducing waste, and ensuring long-term viability,” he said.
The Dorsch Middle East official explained that one of the most transformative innovations is the expansion of treated wastewater reuse, reducing reliance on freshwater sources while meeting industrial and agricultural needs.
“In parallel, real-time digital monitoring systems are improving network efficiency by detecting leaks, tracking consumption patterns, and optimizing distribution,” he said.
Labib noted that low-energy desalination and next-generation filtration technologies will boost sustainability in water production.
He emphasized that through these innovations, Saudi Arabia is not only securing its own water future but also creating scalable solutions that other arid regions can adopt.
“In a fast-changing world of technology, Saudi Arabia seeks to be at the forefront of emerging technologies and make use of data in their water investment decisions. AI is a new tool which can greatly assist in the analysis of data arising from smart water systems including customer usage patterns,” said Labib.
Integrated water strategy
Adham Sleiman, water utilities expert at Kearney MEA, highlighted Saudi Arabia’s integrated water sustainability approach under its national strategy, emphasizing its long-term vision.
“The Kingdom advances desalination, groundwater conservation, and wastewater reuse, as well as leveraging smart technologies and renewable energy. Investments in digital monitoring, smart metering, and AI-driven leak detection enhance efficiency,” he said.
Sleiman noted that the strategy strengthens policy frameworks and governance to optimize water use, highlighted by the recent establishment of the Saudi Water Authority. In 2024, the NWC treated 2.1 billion cubic meters of wastewater, ensuring water security, sustainability, and efficiency. “These efforts reinforce Saudi Arabia’s commitment to a resilient water future,” Sleiman said.
Saudi Arabia is at the center of water sustaina-bility initiatives, hosting major forums like the Saudi Water Forum and the One Water Summit.
Azamat Zhangeldin, manager, energy and process industries at Kearney MEA
PPPs driving innovation in sector
As for public-private-partnerships in the sector, Sleiman emphasized that PPPs are key to advancing Saudi Arabia’s water infrastructure in alignment with Vision 2030, driving innovation and investment in the sector.
“The Saudi Water Partnership Co. has attracted over SR45 billion ($12 billion) in private sector investments, fostering efficiency and innovation in water production and treatment. Saudi water ecosystem’s collaborations with international firms introduce advanced technologies, such as energy-efficient desalination and smart water management systems,” Sleiman said.
He added that these partnerships distribute risks and leverage private sector expertise, leading to improved service quality and accelerated project delivery. “By expanding PPP frameworks, Saudi Arabia is strengthening its water security and promoting sustainable resource management,” said Sleiman.
Addressing climate risks
Azamat Zhangeldin, manager, energy and process industries at Kearney MEA, highlighted how Saudi Arabia is preparing to address climate-related risks, such as prolonged droughts or shifting rainfall patterns, to ensure long-term water availability and resilience.
“Saudi Arabia is at the center of water sustainability initiatives, hosting major forums like the Saudi Water Forum and the One Water Summit, emphasizing integrated policies, economic development, and accelerating UN SDG (sustainable development goal) 6,” he told Arab News.
He added that recognizing limited freshwater sources, the Kingdom has invested heavily in desalination, with 33 plants and 139 purification facilities producing 11.5 million cubic meters daily.
“Public awareness campaigns underscore conservation’s importance amid climate pressures and population growth,” he said, concluding that these solutions, encompassing desalination, purification, dam construction, and flood management, enhance water resilience and storage, ensuring long-term availability and mitigating climate-induced risks.
Balanced approach
Dorsch Middle East’s Labib emphasized that sustainable urban planning is key to developing water security, citing initiatives such as Green Riyadh, which incorporate water-efficient irrigation and landscaping for long-term conservation.
He added that through strong policies, innovative technologies, and large-scale infrastructure projects, Saudi Arabia is creating a resilient, efficient water system that ensures secure access for future generations.
“The Kingdom’s ability to implement projects at scale while maintaining efficiency and resource optimization makes it a model for other nations facing similar water challenges,” said Labib.
He believes Saudi Arabia is creating a replicable blueprint for sustainable water management, and added: “The Kingdom’s success lies in its centralized water strategy, where strong governance frameworks, public-private partnerships, and technological advancements work in unison to achieve long-term water security.”
Fintech, gaming, and health-care capture venture interest
Startups across the region secure significant funding rounds this week
Updated 12 min 1 sec ago
Nour El-Shaeri
RIYADH: Startups across the Middle East and North Africa region continue to attract investor interest, with fintech, gaming, and health care ventures securing significant funding rounds.
UAE-based fintech NymCard raised $33 million in a series B funding round led by QED Investors, with participation from Lunate, Dubai Future District Fund, and Mashreq Bank, as well as Knollwood, Reciprocal, and FJ Labs.
Endeavor, Shorooq Partners, and Oraseya Capital also took part. Founded in 2018 by Omar Onsi and Ayman Chalhoub, NymCard provides fintech companies with API-based solutions to integrate financial services into their applications.
The latest investment will enable the company to expand across more than 10 markets in the region and enhance its payment infrastructure to serve banks, enterprises, fintechs, and telecom providers.
“This investment is a testament to the strength of our technology and our commitment to enabling financial innovation in MENA,” Onsi, the CEO, said.
UAE-based fintech ClearGrid has emerged from stealth after securing $10 million in a dual pre-seed and seed funding round. (Supplied)
“With the backing of our investors, we will continue pushing the boundaries of payments and embedded finance, ensuring our clients have access to best-in-class payment infrastructure solutions backed up by solid program management capabilities,” he added.
This funding follows NymCard’s $22.5 million venture round in 2022, led by DisruptAD and Reciprocal Ventures.
ClearGrid emerges from stealth with $10 million funding
Another UAE-based fintech, ClearGrid, has emerged from stealth after securing $10 million in a dual pre-seed and seed funding round.
The pre-seed round of $3.5 million was co-led by Raed Ventures and Beco Capital, while the seed round of $6.5 million was co-led by Nuwa Capital and Raed Ventures.
Other institutional investors include Aramco’s Waed Ventures, KBW Ventures, and Sharaka, as well as 9yards Capital, Protagonist, and BYLD.
Eirad Holdings, Endeavor Catalyst, and Wamda Capital also put in funds.
Founded in 2023 by Khalid Al-Saud, Mohammad Al-Zaben, and Mohammad Al-Khalili, ClearGrid provides an AI-powered debt collection resolution platform for lenders.
This investment is a testament to the strength of our technology and our commitment to enabling financial innovation in MENA.
Omar Onsi, NymCard CEO
“Collections should be an extension of good lending — not an afterthought. At ClearGrid, we’re reimagining debt resolution from the ground up, giving lenders the intelligence and tools they need to recover capital effectively while creating better outcomes for borrowers,” Al-Zaben said. The startup aims to develop cutting-edge artificial intelligence and machine learning-driven collections systems, alongside a Software-as-a-Service platform that enhances early risk detection and credit orchestration.
“Financial systems must evolve with the digital world. Debt resolution should be a bridge to stability, not a roadblock. At ClearGrid, we’re redefining collections with a data-driven, technology-first approach that strengthens trust, ensuring credit fuels growth, not distress,” according to Al-Saud. “This is just the first step in building the infrastructure for the future of debt resolution,” he added.
The company plans to expand across MENA and beyond as it refines its offerings.
PlaysOut raises $7 million to grow mini-game ecosystem
In the gaming sector, PlaysOut, a UAE-based gametech startup, has secured $7 million in a seed funding round at a valuation of $70 million.
Investors in the round include OKX Ventures, KBW Ventures, and Pacific Century Group.
Founded in 2024 by Jassem Osseiran and Jimmie Jeremejev, PlaysOut provides a mini-games engine and SDK, enabling platforms to integrate a library of interactive mini-games.
The new capital will be directed toward expanding its mini-game ecosystem, securing strategic partnerships, and entering high-growth markets such as the US, MENA, and Asia.
ORO Labs raises $1.5 million for tokenized gold trading
UAE-based ORO Labs, a tokenized gold platform, has raised $1.5 million in a pre-seed funding round led by 468 Capital, with participation from Fasset and angel investors.
Founded in 2024 by Usman Saleem, ORO Labs offers users the ability to trade and use gold-backed assets seamlessly across financial markets.
The company plans to expand its product offerings and deepen its integrations across both decentralized and traditional finance ecosystems.
MENA Analytics secures funding for regional expansion
Palestine-based MENA Analytics, a platform that helps enterprises gather market insights through survey tools and data capture solutions, has secured undisclosed funding from Ibtikar Fund.
Founded in 2023 by Yousef Srouji, Obada Shtaya, Zayne Abudaka, and Mohammad Abu Qare, the company plans to use the new capital for expansion into Jordan and Saudi Arabia as it grows its research and analytics capabilities.
Juridoc.tn raises investment to expand AI-powered legal tech services
Tunisia-based Juridoc.tn, a regulatory technology startup specializing in AI-powered legal document automation, has raised an undisclosed investment round from Go Big Partners and 216 Capital Ventures.
Founded in 2019 by Assali Kais, Maya Boureghda Chebeane, and Anis Wahabi, Juridoc provides businesses with automated legal documentation and services.
The funding will support the company’s expansion into the OHADA region, which covers 17 West and Central African countries.
Grinta raises funding, acquires Citi Clinic for expansion into health care
Egypt-based Grinta, a pharmaceutical marketplace startup, has raised an undisclosed funding round from Beltone Venture Capital and Raed Ventures.
Founded in 2021 by Mohamed Azab, Yosra Badr, Ali Youssef, and Hamza Mohamed, Grinta enables pharmacies to access a traceable supply of pharmaceutical and medical products from multiple vendors, while also offering fulfillment, demand planning, and inventory financing solutions.
The company has also announced the acquisition of Citi Clinic, an Egypt-based primary health care service chain that serves more than 150,000 patients.
The acquisition marks Grinta’s pivot from a business-to-business marketplace to a hybrid model integrating direct patient care, as well as its planned expansion into East Africa.
Fawry and Contact Financial partner to enhance BNPL and fintech services
Egypt’s leading fintech company Fawry has signed a strategic agreement with Contact Financial Holding, one of the country’s top non-banking financial services providers.
The deal aims to integrate Contact’s buy now, pay later service into Fawry’s extensive payment network, which includes more than 370,000 point-of-sale terminals and an online platform.
Through this partnership, Contact’s customers will gain access to Fawry’s digital payment solutions, enabling convenient installment-based purchases. Beyond BNPL, the collaboration will also cover electronic payment solutions, bill collection, and other fintech services.
The initiative aligns with Egypt’s broader digital transformation strategy, which seeks to reduce reliance on cash transactions and drive financial inclusion.
Yango Group launches $20 milliomn venture fund
Yango Group, a global tech company focused on bringing advanced technology to local communities, has launched Yango Ventures, a corporate venture fund aimed at supporting early-stage startups across Latin America, Sub-Saharan Africa, MENAP, and other high-growth regions.
With an initial fund of $20 million, Yango Ventures will invest in seed to series B startups operating in the online-to-offline, B2B SaaS, and fintech sectors.
The fund is designed for scalability, with plans to expand its capital base in the future as entrepreneurial ecosystems in these markets continue to develop.
Beyond capital, Yango Ventures will leverage Yango Group’s industry expertise, network, and operational resources to help startups scale effectively and create sustainable impact within their communities.
By focusing on markets where Yango already has a strong presence, the fund aims to foster technological innovation, digitalization, and economic growth.
KARACHI: Federal Minister for Finance and Revenue Muhammad Aurangzeb said on Friday the International Monetary Fund’s (IMF) response to his country’s request for climate financing was “very positive,” as he oversaw the signing of Pakistan’s first green bond denominated in the local currency.
The IMF’s climate finance funding provides long-term, low-interest loans to help vulnerable countries tackle climate-related risks and transition to greener economies.
Pakistan, which has experienced extreme weather events like floods, droughts and heatwaves, is in talks with the Washington-based lender to secure as much as $1.5 billion in climate resilience funding.
The IMF is also reviewing Pakistan’s economic performance under its $7 billion Extended Fund Facility (EFF) program.
“Over the last few weeks, we have had very constructive discussions with the IMF with respect to the climate resilience fund,” the minister said while addressing an event in Islamabad, adding it was the first time his country had approached the global lender for climate financing and had got a “very positive” response.
“In the coming days, hopefully, we will get to hear more about it,” he continued.
Aurangzeb witnessed the signing of Parwaaz Green Action Bond, Pakistan’s first-ever rupee-denominated green bond to be listed on the stock exchange.
The Rs1 billion ($3.6 million) bond aims to mobilize capital for environmentally sustainable projects and strengthen Pakistan’s green investment ecosystem.
This is the second green bond after Pakistan issued the $500 million Water and Power Development Authority (WAPDA) bond, which was oversubscribed by six times.
Recalling the devastating effects of the 2022 floods and growing pollution, the finance minister said Pakistan was beginning to see and accept climate change as an existential threat.
He said out of a total 13,000 glaciers in Pakistan, 10,000 were receding and were expected to cause significant water disruptions.
He pointed out Pakistan needed financing to deal with such challenges for which it looked toward its multilateral and development partners. However, he emphasized the importance of building Pakistan’s own capacity “in terms of investable, bankable projects” in the context of increasing climate disasters.
“After the 2022 flood, the pledges which were made exceeded $10 billion,” he noted. “What we finally received in the country was one third of it.”
About Pakistan’s first rupee-denominated green bond, he said the country would require some key enablers, such as a proper bond yield curve, secondary market liquidity and a green taxonomy framework.
“Hopefully, as it gets sold out, it should encourage more people both locally and internationally to come up with the financing structures,” he added.
Saudi banks shift focus to debt markets during sukuk surge
Updated 21 March 2025
Reem Walid
RIYADH: As Saudi Arabia’s financial system turns increasingly to debt markets for funding, it will face new opportunities and increased risk in relation to its stability and resilience, experts told Arab News.
The growth of sukuk issuance and other debt market activities are essential to the Kingdom’s economic diversification targets and objectives set out in the Vision 2030 initiative.
Saudi Arabia raised SR2.64 billion ($704 million) through sukuk issuances in March, following the SR3.07 billion secured in February and SR3.72 billion in January.
A report by Fitch Ratings in February showed that the Kingdom holds the largest share of the Gulf Cooperation Council’s debt capital market — which itself surpassed the $1 trillion milestone at the end of January.
This represented a 10 percent year-on-year growth across all currencies.
Another report by Fitch earlier this year showed that Saudi Arabia became the largest dollar-denominated debt issuer in emerging markets — outside China — and the world’s largest sukuk issuer in 2024.
The Kingdom’s debt capital market grew by 20 percent year on year in 2024, reaching $432.5 billion in outstanding debt.
Funding uses
Saudi Arabia uses sukuk issuance as a mechanism to finance giga-projects such as NEOM, the Red Sea, and Qiddiya, which collectively require hundreds of billions of dollars in funding.
Ian Khan, a technology futurist and author, said this highlights the Kingdom’s commitment to Islamic finance as a driver of sustainable development.
“Sukuk aligns with Vision 2030 by attracting both domestic and international ethical investors, particularly from markets in Southeast Asia, the Middle East, and North Africa. Additionally, sukuk’s structure, which ties returns to tangible assets, ensures that funds are channeled into real economic activities such as renewable energy, infrastructure, and technology, all of which are cornerstones of Saudi Arabia’s diversification agenda,” Khan said.
Ian Khan, a technology futurist and author. Supplied
“Furthermore, by developing its domestic sukuk market, the Kingdom reduces its dependence on oil revenues, which currently account for over 50 percent of GDP,” he said.
Khan emphasized that sukuk also supports green finance initiatives, with Saudi entities already issuing green sukuk to fund renewable projects such as the 300 MW Sakaka Solar Project.
Risks and rewards
According to Mohammad Nikkar, principal at Arthur D. Little Middle East, reports published by the Kingdom’s central bank highlight the capitalization strength of the Saudi banking system.
“However, an overreliance on external funding such as debt markets could potentially weaken the credit quality of the banking system, highlighting the need for more prudent risk management,” he said.
There is no doubt that as the focus shifts toward debt markets, new dynamics and opportunities emerge.
“As the sector progresses toward 2030 and beyond, the increasing reliance on debt markets necessitates continued regulatory vigilance and the implementation of robust risk management practices to maintain overall stability and resilience,” Nikkar said.
Mohammad Nikkar, principal at Arthur D. Little Middle East. Supplied
Khan said that the Kingdom’s sovereign bond issuances have been met with strong global demand, with oversubscriptions often exceeding several billion dollars, reflecting investor confidence in the country’s economic reforms.
“However, the increasing exposure to external debt introduces risks, particularly if global interest rates rise or oil revenues fluctuate significantly,” he said.
The author went on to emphasize that to address these challenges, the Saudi Central Bank is likely to strengthen regulatory frameworks and risk buffers, ensuring that banks maintain adequate capital and manage foreign currency risks effectively.
According to Edmond Christou and Basel Al-Waqayan, analysts at Bloomberg Intelligence, the increasing reliance on debt markets will improve the resilience of Saudi Arabia’s banking sector by diversifying funding sources and providing more stable capital to support long-term project financing.
“With banks managing significant duration and liquidity risks, stable funding is critical for driving growth in key sectors aligned with Vision 2030. Senior unsecured paper, for instance, are issued at an average spread of 90 basis points above benchmark treasuries, while subordinated AT1 bonds range between 150–200 basis points,” the analysts told Arab News in a joint statement.
“In 2024, Saudi banks raised approximately $11.5 billion in debt markets, and they are on track to exceed that figure as they continue to finance major projects,” they added.
Martin Blechta, partner at Boston Consulting Group, explained that some of the largest and most recent issuances were done by AlRajhi Bank, Riyad Bank, and Banque Saudi Fransi, as well as Arab National Bank, Saudi Investment Bank, and Gulf International Bank, among others. For some, this was a first-time issuance.
“The increasing reliance on the debt market is an expected progression of the banking sector overall and very much on the strategic agenda of the Saudi Capital Market Authority aiming to expand the debt instrument market,” Blechta said.
“Additional Tier 1 capital plays an important role in the capital structure of leading international banks and the recent developments in the Saudi banking sector are very much in line with that.”
Vision 2030 alignment
From ADL’s point of view, Nikkar explained that by fostering a robust debt capital market, the Kingdom enables growth of alternative sources of funding — a pillar of its National Investment Strategy and aligned with Pillar 1 of the Financial Services Development Program.
The ADL partner added: “This expansion not only opens the country to more investments from international investors but also provides new opportunities for domestic investors to participate in the investment drive fueled by the country’s unprecedented infrastructure and flagship projects within Vision 2030.”
Christou and Al-Waqayan from Bloomberg Intelligence argued that growing focus on sukuk issuance and debt market activities is pivotal to support Saudi Vision 2030’s objectives of economic diversification and sustainable growth.
“A deeper and more developed local capital market attracts foreign investment flows, which are critical to supporting the Kingdom’s expanding economy. Initiatives such as last year’s Saudi ETF listing in Hong Kong and China, as well as the Lenovo deal are key to attract international capital,” the analysts said.
Blechta from BCG noted that banks are diversifying funding sources to match the changing nature of government and large corporate financing needs.
“The majority of large-scale projects are in need of very long-term debt that is typically USD-denominated, to increase international investor demand. Banks are accordingly matching this demand on their funding side. Interestingly, most recent Saudi bank debt issuances were heavily oversubscribed, which shows strong investor confidence in the Saudi banking sector overall,” the partner said.
“However, most demand for the SAR denomination was still domestic, while the USD titles have seen more international investor uptake,” he added.
Martin Blechta, partner at Boston Consulting Group. Supplied
Transformative effects on the Kingdom’s financial landscape
The accelerating trend of Saudi banks looking toward debt markets is set to transform the Kingdom’s financial landscape,
From ADL’s perspective, Nikkar believes that this shift is likely to deepen the capital markets, enhance liquidity, and introduce a wider array of financial instruments to market participants, thereby attracting a more diverse group of investors.
“The Saudi debt capital market is poised to exceed SR2 trillion outstanding over the next few years, driven by government projects under Vision 2030, deficit funding, diversification efforts, and ongoing reforms,” he said.
“This substantial growth indicates a maturing financial market capable of supporting large-scale economic initiatives. Collectively these developments will foster a more dynamic and diversified financial services ecosystem in Saudi Arabia,” the ADL representative added.
Additionally, the accelerated shift of Saudi banks toward debt markets will fundamentally transform the Kingdom’s financial landscape by enabling greater sophistication, resilience, and competitiveness.
From Khan’s point of view, Saudi banks hold an average capital adequacy ratio that provides a strong foundation for leveraging debt markets without compromising financial stability.
The shift coincides with the Kingdom’s efforts to develop the domestic capital markets, as evidenced by initiatives such as the Saudi Stock Exchange reforms and the Financial Sector Development Program.
Khan believes this trend is likely to have a transformative effect on the expansion of debt market instruments.
“Saudi banks are increasingly involved in issuing corporate bonds, sukuk, and hybrid instruments to diversify their funding sources. This diversification reduces reliance on short-term deposits, thereby enhancing long-term stability,” Khan said.
The trend will also lead to greater integration with global markets, technology and innovation in finance, and enhanced environmental, social and governance alignment.
On integration with global markets, Khan said: “Participation in international debt markets has already attracted significant foreign investments. For instance, Saudi Arabia’s $10 billion green bond issued in 2023 was oversubscribed threefold, reflecting investor confidence. This global integration will help Saudi banks build stronger partnerships and access lower-cost capital.”
With regards to technology and innovation in finance, he believes the way debt instruments are issued and traded will be transformed, saying: “The Kingdom is embracing fintech to streamline debt market activities. For example, digital sukuk issuance platforms and blockchain-based systems are being explored to enhance transparency and efficiency.”
Khan added: “The rise of ESG-focused investments, particularly green bonds and sukuk, will push Saudi banks to prioritize sustainable finance. This aligns with Vision 2030 goals of achieving net-zero emissions by 2060 and attracting investors who prioritize sustainability.”
Bhavya Kumar, managing director and partner at BCG, believes that an increasing reliance on debt markets presents opportunities and risks for the Kingdom’s banking sector.
“While it supports Saudi’s broader economic goals under Vision 2030 by diversifying funding sources — reducing dependency on deposits, improving risk management practices required to meet international investor expectations, and fostering financial market development — it also introduces vulnerabilities related to market volatility, leverage, and systemic risks,” Kumar said.
