RIYADH: Saudi Arabia’s point-of-sale spending increased by 48 percent to reach SR12.34 billion ($3.29 billion) from June 23 to 29, with the education sector registering the largest surge.
The latest data from the Saudi Central Bank, also known as SAMA, revealed that the transaction value in the sector, which accounts for only 0.05 percent of the total number of transactions, saw a 1,970 percent increase, reaching SR99.06 million during the week.
From May 16 to June 22, POS spending in the Kingdom dipped to its lowest in months, reaching SR8.34 billion, coinciding with the Eid al-Adha vacation period.
Saudi-based economist Talat Hafiz explained in an interview with Arab News that “spending is usually less during such vacations,” as citizens perform Hajj compared to regular days when they visit shopping malls and restaurants for entertainment.
Data from SAMA for the last week of June showed that spending on transportation surged by 155.4 percent to reach SR790 million, the second-highest increase compared to the previous week.
Spending on construction and building materials came in third place, recording a 110.7 percent rise, reaching SR328.5 million.
Outlays on food and beverages constituted the highest share of the POS and witnessed a 38.3 percent surge, reaching SR1.88 billion. This came alongside spending in restaurants and cafés, reaching SR1.8 billion and constituting the second-largest share with the smallest increase of 12.1 percent compared to the previous week.
POS spending on miscellaneous goods and services, including personal care items, supplies, maintenance, and cleaning, constituted the third-highest share and witnessed a 62 percent rise that week, reaching SR1.6 billion.
The hotel sector experienced the second-smallest increase in POS transaction value, increasing by 15.1 percent to SR220.3 million. On the other hand, gas stations witnessed the third-smallest surge, with a 20 percent increase, reaching SR834.5 million.
According to data from SAMA, 32.15 percent of POS spending occurred in Riyadh, with the total transaction value reaching SR3.96 billion, representing a 61.2 percent increase from the previous week.
Riyadh has undergone considerable expansion, evolving into a pivotal center for growth and progress.
The city’s La Strada Yard recently witnessed the debut of the Dubai-based supermarket chain Spinneys in Saudi Arabia.
The 43,520 square foot flagship outlet in Riyadh’s emerging mixed-use development marks the beginning of Spinneys’ expansion strategy in the capital city and Jeddah, aiming to cater to the increasing preference for high-quality grocery choices across the Kingdom.
Spending in Jeddah followed, accounting for 13.8 percent of the total and reaching SR1.71 billion, marking a 45.3 percent weekly positive change.
Moreover, spending in Dammam surged by 58.1 percent, taking the second-largest increase to reach SR580.4 million, the third-largest share of this week’s POS.
The most significant positive change was spotted in Tabuk, with a 71.6 percent surge, reaching SR230.8 million.
The only negative change was registered in Makkah, where spending decreased by 1.1 percent to reach SR444 million.
Turning US tariffs into opportunities for the Middle East
GCC states shift toward more regional integration as the region tilts toward a more balance, multi-polar trade approach
Updated 12 April 2025
MOHAMMED AL-KINANI
JEDDAH: The US’s imposition of tariffs on several Middle Eastern nations signals a shift in trade dynamics, challenging traditional alliances while opening doors for new economic partnerships and diversification in the region.
Gulf Cooperation Council nations, along with Egypt, Morocco, Lebanon and Sudan, are facing a 10 percent US tariff on exports to the US under Trump’s new trade policy, targeting what the president described as long-standing unfair practices.
While GCC states were spared the steepest penalties, other Arab countries were hit harder: Syria with 41 percent, Iraq with 39 percent, Libya with 31 percent and Algeria with 30 percent.
Tunisia and Jordan received 28 percent and 20 percent tariffs, respectively.
Despite the levies being on US imports, most GCC countries have trade deficits with America, importing more than they export.
According to the Office of the US Trade Representative, goods imports from MENA to America totaled $61.3 billion in 2024, down 1.6 percent, or $1 billion, from 2023. The US goods trade surplus with the Middle East was $19.1 billion in 2024, a 39.8 percent increase, or $5.4 billion, on 2023.
Strategic intent signals
When the US imposes tariffs, the impact extends far beyond the balance sheets of exporters and importers. These policy tools, while often presented as economic levers, also serve as clear messages about strategic intent.
The most recent round of US tariffs on a variety of goods has sparked concern across global markets, including among trade experts in the Middle East.
Tamer Al-Sayed, chief financial officer at the Future Investment Initiative Institute, told Arab News that the move was part of a broader shift in tone, saying: “Tariffs have never just been about taxes. They are signals. And the message coming from Washington right now is: ‘We’re prioritizing domestic protection.’”
While such a stance may make political sense in the White House, Al-Sayed believes it introduces a layer of complexity to long-standing economic ties between the US and the Gulf region.Historically, he said, the region has had strong energy and defense trade channels with the US, but in areas such as petrochemicals, aluminum and even some tech-linked components, there is some discomfort.
Tariffs have never just been about taxes. They are signals. And the message coming from Washington right now is: ‘We’re prioritizing domestic protection.’
Tamer Al-Sayed, chief financial officer at the Future Investment Initiative Institute
He emphasized that the issue extends beyond immediate cost increases, highlighting a broader shift in the tone of the relationship — from collaborative to transactional.
Describing the scene in the region, he noted that it is only natural for businesses and governments to begin asking “tough” questions — such as whether they are overly exposed to a single market, and how they can future-proof their trade strategies.
“That might lead to a bit of a cooling-off in certain sectors while we explore new or alternative partnerships,” he said.
Minor impact on exports, rising diplomatic tensions
Yaseen Ghulam, an associate professor of economics and director of research at Al-Yamamah University, Riyadh, told Arab News that US diplomatic relations with their allies in the region are under significant strain due to blanket tariffs on goods imported from these countries.
“Some countries are impacted more due to higher rates and a larger volume of trade. When it comes to Middle Eastern countries, the negative direct impact is not significant,” Ghulam said.
However, he said that a tariff of 10 percent on exports to the US will not significantly change their volume of exports to the US.
Ghulam pointed out that incidents and related shocks such as these are not common when one looks at the history of the international trade mechanism developed after World War II.
While US tariffs have not created an immediate need for diversification, they have certainly accelerated the process. (Shutterstock)
“The superpowers have always had the muscle to press a reset button. However, the speed and magnitude with which these tariffs have been introduced by the US is in fact unparalleled,” he said.
The economist added that the US is a country that has dominated in politics and trade, but senses its dominance is in decline due to emerging larger trading powers such as China.
Domestically, he added, the significant trade deficit the US has had over an extended period has been cited as a reason for the government’s inability to upgrade infrastructure and services over the past two decades. He believes that the global community must address US concerns while preparing for a changed trade regime.
“There is also a need for dialogue to come up with arrangements that do not hurt international trade and global consumers, and that also do not give unfair advantages to some countries that have used protective policies for various economic sectors, such as agriculture and automobile manufacture, to the detriment of some exporting countries such as the US,” Ghulam said.
New regional opportunities
Among the sectors feeling the brunt of the US tariffs are aluminum and petrochemicals — industries in which Gulf countries such as Bahrain and the UAE have long held competitive advantages.
According to Al-Sayed, these sectors are now grappling with diminishing price competitiveness in global markets with countries such as Bahrain and the UAE having built competitive export ecosystems around these industries.
“When tariffs hit, our price advantage starts to erode, and in a global market, that matters. But it is not all negative. Whenever there is a shake-up like this, new opportunities emerge. For example, sectors like agribusiness or food processing in the region could benefit as supply chains adjust and prices in the US climb,” he said.
The FII official added that he sees a potential boost in re-export and logistics hubs such as Jebel Ali. “They can step in to serve rerouted flows,” he said.
Al-Sayed also highlighted the growing promise of the region’s tech and green economy sectors. “As global players look to hedge their trade exposure, they will want partners who are agile, well-positioned, and policy-stable. That is where we have an edge,” he said.
Countries in the region are increasingly prioritizing economic diversification to lessen their dependence on traditional income sources.
While US tariffs have not created an immediate need for diversification, they have certainly accelerated the process. “Diversification did not start with these tariffs. It is just accelerating now,” said Al-Sayed.
He pointed out that there is also a shift toward a more regional integration, with the GCC states starting to tighten their economic cooperation.
“In times like these, neighbors matter. So, the US will remain a key player, but the region is clearly tilting toward a more balanced, multi-polar trade approach,” he said.
Moreover, he added, these countries, especially under frameworks such as Vision 2030, have been on a mission to reduce overreliance on single markets.
“The current tariff situation just reinforces that urgency. You will notice stronger trade missions and deals being signed with China, India, Southeast Asia, and increasingly with Africa,” he said.
Rise of strategic, sector-specific alliances
Looking ahead, Al-Sayed foresees a wave of targeted, sector-specific trade agreements taking shape across the globe. Green energy partnerships with Europe, digital and AI cooperation with Asia, and food security initiatives with African nations, are all part of this evolving trade blueprint.
Al-Sayed said that there is a new mindset emerging, particularly among Gulf sovereign funds and trade ministries, focused not only on importing and exporting but also on influence, access and long-term positioning.
“So, when we invest, we are thinking what market this opens and what network it unlocks. For example, do not be surprised to see strategic joint ventures in logistics, tech manufacturing, or even rare earths, where we co-own supply chains rather than just buy from them,” he said.
The financial expert said that the world is rebalancing, and tariffs may seem like small policy tools, but their aftershocks are redrawing global trade maps. “The Middle East, if it plays this right, could come out not just as a player but as a connector,” Al-Sayed said.
Real estate leads corporate lending as bank loans top $811bn
Saudi banking sector lending in February sees its highest annual growth rate at 14.89 percent
Updated 12 April 2025
Dayan Abou Tine
RIYADH: Saudi Arabia’s banking sector experienced a surge in lending in February, with total loans reaching SR3.04 trillion ($811.46 billion) — the highest annual growth rate in more than two years at 14.89 percent.
According to new data from the Saudi Central Bank, also known as SAMA, the increase was largely fueled by corporate borrowing, which made up 54.57 percent of the total loan portfolio, reaching SR1.66 trillion.
This segment grew by 19.29 percent year on year, driven by sectors aligned with the Kingdom’s Vision 2030 diversification strategy.
Among corporate segments, real estate activities dominated lending, comprising 20.62 percent of total business loans.
This sector also registered a 30.82 percent increase compared with the same month last year, hitting SR342.34 billion. Wholesale and retail trade followed, accounting for 12.42 percent or SR206.14 billion, while manufacturing made up 11.15 percent, or SR185.1 billion.
Electricity, gas, and water supply accounted for 10.69 percent reaching SR177.5 billion.
Although the financial and insurance sector held a smaller share at about 10 percent, it posted the highest growth rate of 43.52 percent during this period, reaching SR165.39 billion.
Meanwhile, lending for education, although just 0.62 percent of corporate loans, registered the second-highest annual growth at 38.47 percent to SR8.75 billion.
This lending momentum reflects the Kingdom’s accelerating efforts to meet its Vision 2030 economic transformation goals. As Saudi Arabia pushes forward with mega projects, urban development, and infrastructure upgrades, sectors such as real estate and manufacturing have emerged as critical engines of growth — and top priorities for bank financing.
Real estate lending has soared on the back of housing demand, government-backed mortgage programs, and major residential developments, particularly in Riyadh and other growing urban centers.
Similarly, manufacturing is experiencing strong momentum as the Kingdom works to localize production and become a regional industrial hub.
According to the General Authority for Statistics, Saudi Arabia’s industrial production index rose 1.3 percent year on year in January, fueled by a 4 percent increase in manufacturing activity.
Chemicals, refined petroleum products, and non-metallic minerals led the gains — all strategic subsectors under the National Industrial Development and Logistics Program, which aims to diversify the economy and reduce dependence on oil.
With manufacturing output expanding and large-scale housing and commercial projects underway, banks are channeling more capital into these high-priority sectors. This is enabling developers and manufacturers to scale operations, enhance productivity, and support the broader objectives of Vision 2030.
Risk controls amid soaring real estate exposure
With real estate loans, both retail and corporate, now making up approximately 30 percent of total bank credit in Saudi Arabia, regulators and lenders are tightening risk controls to safeguard financial stability amid booming demand.
According to the International Monetary Fund’s 2024 Financial System Stability Assessment, several factors help mitigate risk in the Kingdom’s expanding mortgage portfolio.
Most home loans in Saudi Arabia are issued with fixed interest rates and full recourse clauses — meaning borrowers are personally liable even in case of default — significantly lowering the likelihood of strategic defaults.
Additionally, nearly 80 percent of retail mortgage borrowers are government employees, whose income is expected to remain stable even in economic downturns. Many loans are also salary assigned, allowing banks to deduct payments directly from borrowers’ paychecks.
The IMF noted that Saudi authorities have taken commendable steps to contain risks, including responsible lending rules that cap borrowers’ debt-service-to-income ratios and new foreclosure laws that allow lenders to reclaim properties when borrowers default.
As lending continues to surge — particularly in real estate — Saudi Arabia’s financial sector appears well positioned for the moment. (SPA)
A growing credit bureau and expanded housing data collection platforms are also strengthening transparency.
Still, the IMF cautioned that the scale and complexity of Saudi Arabia’s real estate and infrastructure mega-projects could lead to resource competition, project delays, or stress on developers and contractors — underscoring the need for continuous monitoring of system-wide risks.
The National Financial Stability Committee, as well as SAMA and other agencies, are urged to ensure timely data sharing and fill gaps identified under the G20’s Data Gaps Initiative, particularly in areas such as sectoral lending exposures and interbank linkages.
Stress tests conducted on 11 major Saudi banks revealed that the system remains resilient, even under adverse conditions such as a global recession or sharp oil price declines.
Although the IMF observed some volatility in historical default data and limited availability of micro-level information, capital buffers across the sector remain solid.
Only one non-systemic bank fell slightly below the regulatory threshold under a high-rate shock scenario.
As lending continues to surge — particularly in real estate — Saudi Arabia’s financial sector appears well positioned for the moment, according to the IMF.
But as Vision 2030 accelerates, experts emphasize that maintaining strong safeguards, diversifying exposures, and closing data gaps will be key to ensuring long-term resilience.
Boosting mortgage liquidity
To sustainably support the sector’s growth, banks are increasingly embracing securitization.
In January, the Saudi Real Estate Refinance Co. — a subsidiary of the Public Investment Fund — signed a memorandum of understanding with Hassana Investment Co. to launch the region’s first residential mortgage-backed securities.
Mortgage securitization is a financial process through which banks and lenders pool together a collection of home loans and convert them into tradable securities known as mortgage-backed securities.
These securities are then sold to investors, who receive periodic payments derived from the underlying mortgage repayments made by homeowners. This approach allows banks to offload mortgage risk from their balance sheets, free up capital, and extend more loans to new borrowers.
It also diversifies funding sources and deepens capital markets. SRC CEO Majeed Al-Abduljabbar described the agreement as a major step in developing the Kingdom’s housing finance ecosystem, while Hassana CEO Saad Al-Fadhli said the partnership exemplifies a shift toward scalable and long-term financial solutions.
As the real estate market continues to expand and mortgage demand rises, the SRC-Hassana partnership is expected to boost liquidity in the secondary mortgage market, draw new investment, and reinforce the financial sector’s role as an enabler of Vision 2030.
Startups’ expansion into new markets signal strong investor confidence
Updated 12 April 2025
Nour El-Shaeri
RIYADH: Startups across the Middle East, North Africa and South Asia are securing fresh capital and expanding into new markets, signaling strong investor confidence.
Saudi-based business-to-business marketplace Sary has announced it will merge with Bangladesh’s commerce platform ShopUp to create the SILQ Group, a newly formed entity aiming to transform cross-border trade across South Asia and the Gulf.
The merger is supported by a $110 million funding package comprising an equity investment and a financing facility dedicated to SILQ Financial, the group’s financial services arm.
The funding round includes participation from a broad investor base, led by Sanabil Investments, and joined by Valar Ventures, Flourish Ventures and STV, as well as MSA Capital, VSQ and Rocketship VC. Wafra Investment, Peak XV and Prosus were also involved, along with Tiger Global, Endeavor Catalyst and Raed Ventures.
Qatar Development Bank also participated as a new investor, as SILQ sets its sights on establishing a significant presence in the Qatari market.
This strategic alliance signals a significant step toward deeper commercial integration between the two regions, aiming to serve micro-, small-, and medium-sized enterprises with improved access to global supply chains and embedded financial tools.
Founded in 2018 by Mohammed Al-Dossary and Khaled Al-Siari, Sary connects small retailers and merchants with manufacturers and lenders across Saudi Arabia and the Gulf region.
ShopUp, founded in 2016 by Afeef Zaman, offers similar services in Bangladesh, acting as a crucial link between mills, brands, and neighborhood retailers.
The newly formed SILQ Group combines these complementary regional networks, technology stacks, and market expertise.
Saudi-based business-to-business marketplace Sary has announced it will merge with Bangladesh’s commerce platform ShopUp to create the SILQ Group. (Supplied)
“Through this merger, we’re entering what’s set to become one of the world’s largest trade corridors — projected to reach $682 billion,” said Zaman, now CEO of SILQ Group.
“We’re in the front seat to serve some of the most exciting, fast-growing economies that are set to shape global consumption in the coming decades, giving them greater access to products from around the world.” He added SILQ will focus on eliminating friction in the B2B supply chain and enabling MSMEs with better technology and financial inclusion.
Al-Dossary, now CEO of SILQ Financial, said: “By merging our strengths, we’re not just expanding our reach — we’re revolutionizing how digital commerce serves Gulf’s merchants and South Asia manufacturers.”
He added: “This alliance brings together the best of both worlds — deep regional expertise and world-class technology to empower every business in our ecosystem where financial services are a cornerstone.”
Language AI platform STUCK? secures six-figure pre-seed round
Saudi-based artificial intelligence startup STUCK?, which offers real-time language support for English and Arabic content, has raised a six-figure pre-seed investment round to advance its product and market reach.
The funding was led by the UK-based Mena Tech Fund, with participation from the KAUST Innovation Fund and several angel investors from Saudi Arabia.
Founded in 2022 by Asmaa Naga, STUCK? delivers AI-powered language assistance to content teams, offering contextual help in writing, editing and translation.
The company aims to remove language barriers for both native and non-native speakers operating in bilingual business environments.
STUCK? provides services via an AI-first platform that combines natural language processing with generative tools optimized for business communication and brand tone consistency.
With this latest round, STUCK? plans to scale its engineering capabilities.
Rabbit launches in Saudi Arabia with Riyadh regional HQ
Cairo-born quick commerce startup Rabbit has expanded its operations to Saudi Arabia by opening a regional headquarters in Riyadh.
The move marks Rabbit’s first major international market entry, as it looks to replicate its rapid delivery model — offering grocery and everyday essentials in under 20 minutes — within the Kingdom’s growing e-commerce landscape.
Founded in 2021 by Ahmed Yousry, Walid Shabana, Ismail Hafezz and Tarek El-Geresy, Rabbit leverages a network of dark stores and a proprietary logistics platform to optimize ultra-fast last-mile delivery.
In Egypt, Rabbit has positioned itself as a leader in q-commerce with its tech-driven approach, and it now seeks to replicate this success in the Gulf by localizing its services for Saudi consumers.
We pride ourselves on being a hyperlocal company, bringing our cutting-edge tech and experience to transform the grocery shopping experience for Saudi households.
Ahmad Yousry, Rabbit co-founder and CEO
Rabbit’s expansion is supported by funding from investors including Lorax Capital Partners, Global Ventures, Raed Ventures, and Beltone Venture Capital.
Existing backers Global Founders Capital, Goodwater Capital, Hub71, Simple Capital and Foundation Ventures have also reaffirmed their commitment to the company’s growth strategy.
“We are delighted to announce Rabbit’s expansion into the Kingdom,” said co-founder and CEO Ahmad Yousry.
“We pride ourselves on being a hyperlocal company, bringing our cutting-edge tech and experience to transform the grocery shopping experience for Saudi households and delivering the best products — especially local favorites — in just 20 minutes. We’re building Rabbit Saudi for Saudis by Saudi hands.”
Sellou raises seed funding round at $3m valuation
Bahrain-based social commerce startup Sellou has closed a seed funding round at a $3 million valuation, aimed at scaling its video-powered marketplace platform across the MENA region.
Founded by Salman Al-Khalifa, Sellou allows users to create short, interactive videos to showcase and sell a wide range of products — ranging from handmade goods to general merchandise.
The platform is part of a rising wave of social commerce innovation, particularly in the Middle East, where mobile-first consumer behavior is driving the adoption of new retail formats.
Sellou’s app enables sellers to build storefronts with personalized video content and engage buyers through direct messaging, streamlining the e-commerce experience for both sides.
With fresh capital, Sellou intends to invest in expanding its engineering team, enhancing creator tools and entering new markets across the region.
Rentify raises $500k to grow rental payment platform
UAE-based proptech and fintech company Rentify has raised $500,000 in seed funding to accelerate the development of its rental payment and management platform.
The startup was founded in 2025 by Rashed Hareb and Rajneel Kumar with a vision to digitize rental transactions and improve transparency between tenants and landlords.
Rentify enables tenants to manage rental installments through a secure platform.
The company reports that over $408 million worth of property rentals have already been registered on the platform.
The seed funding will be used to further scale operations, integrate more properties across the Emirates, and introduce new fintech features including credit scoring and embedded finance solutions for tenants.
PayTic raises $4m to expand African operations
Morocco-based fintech startup PayTic has secured $4 million in funding to support its expansion into new African markets.
The round was led by AfricInvest, with participation from Build Ventures, Axian Group, Mistral, Island Capital Partner, and Concrete.
Founded in 2020 by Imad Boumahdi, PayTic focuses on automating operational processes for card issuers and banks, such as reconciliation, chargeback management, and regulatory reporting.
The capital injection will enable PayTic to grow its presence in both North Africa and sub-Saharan Africa.
Haball raises $52m to grow Shariah-compliant supply chain financing
Pakistan-based fintech firm Haball has raised $52 million to scale its Shariah-compliant supply chain finance and payment solutions.
The round includes $5 million in equity and $47 million in strategic financing.
Zayn VC and Meezan Bank led the investment, with the capital earmarked for growth in Pakistan and expansion into the Middle East, starting with Saudi Arabia later this year.
Founded to address the credit gap in Pakistan’s SME ecosystem, Haball enables businesses to access Islamic finance products for inventory and procurement needs.
“Supply chain finance in Pakistan is nascent but is expected to be worth over $9 billion; driven by the severe financing gap faced by the country’s SMEs — less than 5 percent can access financing from commercial banks,” the company said in a statement.
The funding will allow Haball to introduce new services tailored to Islamic finance users, integrate further with enterprise resource planning systems, and partner with banks to onboard new business clients.
AI set to double data center electricity demand by 2030: IEA
Updated 11 April 2025
Nirmal Narayanan
RIYADH: Electricity consumption by data centers is expected to double by 2030 to reach 945 terawatts per hour, driven by the rapid use of applications powered by artificial intelligence, according to a think tank.
In its latest report, the International Energy Agency said that this rise in electricity demand will create new challenges for energy security and carbon dioxide emission goals.
According to the IEA, electricity consumption by data centers has increased by 12 percent annually since 2019 to reach 1.5 percent of the global amount in 2024.
The agency added that even though AI is driving the use, the technology can also unlock opportunities to produce and consume electricity more efficiently.
“AI is one of the biggest stories in the energy world today — but until now, policymakers and markets lacked the tools to fully understand the wide-ranging impacts. Global electricity demand from data centers is set to more than double over the next five years, consuming as much electricity by 2030 as the whole of Japan does today,” said Fatih Birol, executive director of the IEA.
He added: “The effects will be particularly strong in some countries. For example, in the US, data centers are on course to account for almost half of the growth in electricity demand; in Japan, more than half; and in Malaysia, as much as one-fifth.”
The IEA further said that generative AI requires colossal computing power to process information accumulated in gigantic databases.
The report added that data centers in the US are set to consume more electricity than the cumulative power used for the production of aluminum, steel, cement, chemicals and all other energy-intensive goods combined by the end of this decade.
In advanced economies more broadly, data centers are projected to drive more than 20 percent of the growth in electricity demand between now and 2030, putting the power sector in those economies back on a growth footing after years of stagnating or declining demand in many of them.
In March, another report by the IEA revealed that energy demand globally rose by 2.2 percent in 2024 compared to 2023, driven by usage of electricity and growth in emerging and developing economies.
In that analysis, the agency revealed that energy demand growth last year was also faster than the average annual increase of 1.3 percent between 2013 and 2023.
Meeting rising demand
According to the IEA, the world should tap a diverse range of energy sources to meet data centers’ rising electricity needs.
Data centers are set to account for around one-tenth of global electricity demand growth to 2030, less than the share from industrial motors, air conditioning in homes and offices, or electric vehicles.
The report projected that renewables and natural gas are set to take the lead in this journey due to their cost-competitiveness and availability in key markets.
“Renewables generation is projected to grow by over 450 TWh to meet data center demand to 2035, building on short lead times, economic competitiveness and the procurement strategies of tech companies,” said the IEA.
It added: “Dispatchable sources, led by natural gas, also have a crucial role to play, with the tech sector helping to bring forward new nuclear and geothermal technologies as well.”
The report further said that natural gas and nuclear power capacity is projected to grow by over 175TWh each by the end of this decade to meet electricity demand in data centers.
Aligning with this trend, in October Google signed a deal with Kairos Power to to use small nuclear reactors to generate the vast amounts of energy needed to power its AI-based data centers.
In the same month, Amazon also signed three agreements with X-Energy to develop nuclear power technology called small modular reactors to power its data centers.
Microsoft is also eyeing to use nuclear energy from new reactors at Three Mile Island, the site of America’s worst nuclear accident.
Earlier this month, in a separate report, the IEA said that the range of new energy technologies under development globally is broader and appears more promising than ever before, catering to the rising demand.
The think tank added that modern energy technology landscape is highly dynamic, with both emerging and established economies contributing to the growth of innovation in the sector.
Unlocking opportunities through AI
According to the IEA, while data centers could negatively impact energy security, wise implementation of AI has the potential to transform the energy sector in the coming decade.
The report said that effective use of the technology could unlock significant opportunities to cut costs, enhance competitiveness, and reduce emissions.
“With the rise of AI, the energy sector is at the forefront of one of the most important technological revolutions of our time,” said Birol.
He added: “AI is a tool, potentially an incredibly powerful one, but it is up to us – our societies, governments and companies – how we use it.”
According to the report, countries that want to benefit from the potential of AI need to quickly accelerate new investments in electricity generation and grids.
The IEA also urged these nations to improve the efficiency and flexibility of data centers, and strengthen the dialogue between policymakers, the tech sector and the energy industry.
The report added that countries should also consider establishing new data centers in areas of high power and grid availability.
The Paris-based agency further said that AI could intensify some energy security strains while helping to address others.
“Cyberattacks on energy utilities have tripled in the past four years and become more sophisticated because of AI. At the same time, AI is becoming a critical tool for energy companies to defend against such attacks,” said the IEA.
The emission factor
The IEA said that the growth of data centers will inevitably increase carbon emissions linked to electricity consumption, from 180 million tons of CO2 today to 300 million tonnes by 2035.
However, these emissions remain a minimal share of the 41.6 billion tonnes of overall global emissions estimated in 2024.
“While the increase in electricity demand for data centers is set to drive up emissions, this increase will be small in the context of the overall energy sector and could potentially be offset by emissions reductions enabled by AI if adoption of the technology is widespread,” said the report.
The think tank added that AI could also accelerate innovation in sustainable energy technologies such as batteries and solar photovoltaics, thus contributing to the global climate goals.
Symbols of power: Saudi Arabia and UAE stamp their marks on global finance
Updated 11 April 2025
MIGUEL HADCHITY
RIYADH: In a display of economic ambition, Saudi Arabia and the UAE have unveiled new currency symbols for the riyal and dirham, marking a pivotal moment in their quest for global recognition.
Within just a few weeks of each other, the two Gulf powerhouses introduced these symbols — a strategic move designed to elevate their currencies on the world stage, signaling modernization, stability, and a vision for the future of trade and digital finance.
Saudi Arabia took the lead as King Salman approved the launch of a new riyal symbol in late February. The design, rooted in Arabic calligraphy, merges cultural heritage with modernity — a reflection of the Kingdom’s Vision 2030 ambitions.
In an interview with Arab News, economist and policy adviser Mahmoud Khairy said: “Currency symbols play a vital role in shaping how people view a nation’s money, and introducing new symbols for the riyal and dirham could help position them as modern and independent currencies.”
He added that a well-crafted symbol fosters national pride and distinguishes these currencies from others, crucial for gaining international recognition.
The Saudi riyal symbol. Supplied
When it was revealed, Saudi Central Bank Gov. Ayman Al-Sayari described the symbol as a reinforcement of the riyal’s identity both domestically and internationally.
The design comes as Saudi Arabia embraces digital transformation, having joined Project mBridge, a multinational CBDC initiative that includes China, Hong Kong, Thailand, and the UAE. This move underscores the Kingdom’s commitment to reshaping global trade through blockchain technology.
The UAE followed closely, revealing the new dirham symbol, a sleek and meaningful design that blends the English letter “D” with two horizontal lines symbolizing financial strength.
The inclusion of elements from the UAE flag underscores national pride while reinforcing the currency’s role in international markets.
The Central Bank of the UAE emphasized that the symbol will soon be integrated into global typographical fonts, ensuring the dirham stands alongside the US dollar, British pound, and euro as a recognizable financial emblem.
This rebrand is not merely cosmetic. It coincides with the UAE’s adoption of the FX Global Code, making the CBUAE the first central bank in the Arab world to join this framework, which promotes transparency and best practices in foreign exchange markets.
Additionally, the UAE is pushing forward with its digital dirham, a blockchain-based central bank digital currency set to revolutionize financial transactions.
CBUAE Gov. Khaled Mohamed Balama has hailed the initiative as a leap forward for financial inclusion, security, and efficiency.
The digital dirham will feature smart contracts, tokenization for fractional asset ownership, and seamless cross-border payments — positioning the UAE as a leader in the digital economy.
The bigger picture: a strategic assertion of financial independence
The introduction of these symbols is far more than a typographical update — it is a calculated assertion of financial independence.
Historically, dominant currencies such as the dollar and euro have enjoyed instant recognition through their symbols, reinforcing their influence in global markets.
The new UAE dirham symbol. File
By establishing their own, Saudi Arabia and the UAE are declaring their currencies as serious contenders in international trade and finance.
“The new currency symbols for the Saudi riyal and UAE dirham are more than design updates. They’re strategic instruments of soft power and economic diplomacy,” said Andreas Hassellof, CEO of tech firm Ombori. “By embedding cultural identity into global financial language, both nations are signaling a readiness to elevate the riyal and dirham on the world stage.”
Hassellof believes that familiar symbols create a perception of legitimacy, influencing how currencies are referenced, traded, and held.
Arun Leslie John, chief market analyst at investment planning firm Century Financial, told Arab News that the rebranding reflects economic confidence and institutional maturity, which are key to attracting foreign direct investment.
“The new logos will bring more visibility in cross-border transactions, making the UAE dirham and Saudi riyal practical as invoicing currencies for trade, thereby reducing reliance on traditional denominations like the dollar and euro,” he said.
The UAE dirham has already been ranked among the top 10 most traded currencies by a leading UK forex provider, signaling its growing prominence. Saudi Arabia, with its vast oil wealth and economic diversification efforts, is similarly positioning the riyal as a currency of stability and innovation.
Arun Leslie John, chief market analyst, Century Financial. Supplied
The digital frontier: reshaping finance and inclusion
Both nations are leveraging these rebrands to accelerate their digital finance agendas.
The UAE’s digital dirham, part of its Financial Infrastructure Transformation Programme, will be legally recognized as a universal payment method, available through banks, fintech firms, and exchange houses. Its features — such as instant settlement and automated smart contracts — promise to redefine financial transactions.
“The rollout of digital currencies, particularly the UAE’s blockchain-based digital dirham, represents a bold leap toward a more efficient and inclusive financial ecosystem,” said Hassellof.
“Traditional cross-border transactions are slow and feel-heavy, especially for smaller enterprises and remittance flows. Digital currencies remove these frictions, enabling near-instant settlement at a fraction of the cost.”
Andreas Hassellof, CEO, Ombori. Supplied
Century Financial’s Leslie John highlighted the operational benefits, stating: “The UAE’s mBridge will facilitate intra-regional payments at a faster pace, with fast settlement terms and smart contracts of the digital dirham enabling trade finance flows, minimizing operating costs, and improving efficiency.”
He also emphasized how tokenization allows fractional ownership of assets, opening investment opportunities for SMEs and retail investors.
Khairy pointed to the broader economic implications, saying: “Digital currencies like the UAE’s digital dirham or Saudi Arabia’s CBDC pilot aren’t just tech experiments — they could reshape how trade is settled, how foreign investors view regional stability, and how citizens connect with their economies.”
He stressed that faster, cheaper cross-border payments could make Gulf economies more attractive to global partners.
Saudi Arabia, meanwhile, is integrating its new riyal symbol into digital and physical transactions, with plans for gradual implementation across financial platforms. Its participation in Project mBridge highlights a shared Gulf vision for blockchain-powered trade efficiency.
A unified Gulf financial future?
The parallel moves by Saudi Arabia and the UAE suggest deeper monetary cooperation could be on the horizon. “Today’s digital dirham and symbolic riyal may well be the foundation stones of tomorrow’s unified Gulf financial future,” said Hassellof.
Leslie John expanded on this, saying: “The simultaneous digital money and rebranding moves by Saudi Arabia and the UAE present the potential for further deepening monetary integration of the Gulf Cooperation Council, paving the way for interoperable payment mechanisms or even a future digital GCC currency union.”
