Saudi Arabia to create the largest venture capital funds in the world

Saudi Arabia to create the largest venture capital funds in the world

The injection of investments and the operation of a package of projects worth billions of dollars


Thursday – 2 Rabi’ al-Thani 1444 AH – 27 October 2022 AD Issue No. [
16039]


The signing of an agreement to establish a package of hotel projects worth two billion dollars in Makkah Al-Mukarramah on the sidelines of the Investment Initiative Conference yesterday (SPA)

Riyadh: “Middle East”

In conjunction with Saudi Arabia’s efforts to reduce greenhouse gas emissions, Aramco announced yesterday (Wednesday) the establishment of a $1.5 billion sustainability fund to invest in technology to support a stable and comprehensive energy transition, one of the largest venture capital funds worldwide.
This took place during the activities of the sixth edition of the Future Investment Initiative, where the new fund will be managed by Aramco Ventures – Aramco’s venture capital arm – as an extension of its efforts to reduce gas emissions.
zero neutrality
The fund will seek to invest in technologies that support Aramco’s ambition to achieve zero emission neutrality in its operations by 2050, in addition to developing new low-carbon fuels.
Initially, the fund’s focus areas will include carbon capture and storage, solutions for greenhouse gas emissions, nature-based climate, digital sustainability, hydrogen, low-carbon ammonia and industrial fuels, as well as advances in energy efficiency.
The company, through its wholly-owned subsidiary Aramco Trading, is planning the first voluntary auction of carbon credits organized by the Public Investment Fund, and it follows the signing of a memorandum of understanding between the two parties earlier this year to participate in a voluntary regional carbon market to be launched in 2023.
Energy Challenges
“Climate change is a very important issue, which is why the sustainability framework is integrated with the company’s strategy and investment decisions,” says Yasser Al-Rumayyan, chairman of Saudi Aramco.
He added that the company harnesses innovation and collaboration in its quest to find long-term solutions to global energy challenges, and by promoting large-scale investments and building important local, regional and international partnerships, Aramco aims to create a stable and comprehensive energy – make transition possible. meeting the world’s energy needs with lower emissions.
English Amin Al-Nasser, President and Chief Executive Officer of Saudi Aramco, for his part explained that the launch of the company’s sustainability fund and participation in the voluntary carbon market represent clear additions in the trend towards zero neutrality.
He added, “We treat climate challenges as a top priority, focusing our efforts on identifying practical and tangible solutions that can have a beneficial impact, and through the fund we plan to invest in new and innovative technologies that have the potential have to reduce emissions of greenhouse gases, and at the same time by helping to create a voluntary carbon market in the Kingdom, we hope to encourage investment in these technologies to make them economically viable.”
blue ammonia
In addition, Saudi Aramco aims to achieve zero greenhouse gas emission neutrality in bands 1 and 2 across its wholly owned and operated assets by 2050.
In June, the company also announced a set of interim targets by 2035, whereby it aims to reduce or mitigate greenhouse gas emissions in bands 1 and 2) at its wholly owned and operated business facilities by more than 50 million metric tons of greenhouse gases CO2 equivalent per year , compared to the company’s normal business forecast.
The company is developing its blue ammonia and hydrogen business, aiming to produce up to 11 million metric tonnes of blue ammonia annually by 2030, with the potential to help significantly reduce emissions in hard-to-decarbonise sectors .
The company is also exploring opportunities to reduce greenhouse gas emissions along the entire value chain of its products, and intends to implement a range of initiatives in support of a circular carbon economy framework to reduce, reuse, recycle and remove carbon dioxide emissions.
investment opportunities
On the other hand, Saudi STC Group announced yesterday during the Future Investment Initiative that it has committed an additional $300 million in addition to $500 million for STV, the largest independent technology investment company in the Middle East and North Africa region.
In a recent report, STV predicted that the Middle East and North Africa region is poised to create 45 unicorns by 2030, providing a $100 billion opportunity to be made available through local IPOs.
STV plans to acquire a significant share of the accelerated unicorn creation process based on its investments in leading companies in fast-growing sectors.
digital transformation
Engineer Olayan Al Wetaid, CEO of STC, said that this additional investment is the group’s future vision and contribution to digital transformation efforts in the Kingdom and abroad, and reflects the trend to inject innovative projects into the digital economy, as well as aspirations to develop technology in the country and the Middle East region and North Africa.
Engineer Olayan added, “Our investments in STV have achieved great investment returns since launch which has been the main catalyst for doubling our participation today. In addition, through our comprehensive strategy, we aim to provide support and motivation to leading digital companies. with the aim to grow and expand the scope of the group’s investments in modern technical sectors.” ».
For his part, Abdul Rahman Trabzoni, CEO of STV, stated that the region has reached an upward turning point and has emerged as one of the most attractive regions in the world for project investments.
capital
Since its launch in 2018, STV has invested in a group of technology companies in a number of sectors in the Middle East and North Africa, with a primary focus on opportunities with a gap between digital demand and supply in traditionally large industries, such as logistic. , e-commerce and technology Finance, to multiply these opportunities and support its current start-up companies.
She has grown her team to more than 20 professionals with diverse backgrounds including technology, investments and operations.
This additional support will help STC consolidate its position as the most active investor in the region, as the fund has led nearly 60 percent of investment capital opportunities in Saudi Arabia, and its portfolio has provided nearly 3 million indirect jobs, in addition to being a player in the sector due to its expansion across the region and internationally.
With the growth of investment capital in the Middle East and North Africa significantly in recent years, Riyadh has become the fastest growing market in the region with investment capital growing 244 percent year-on-year to $584 million in the first half to be achieved by 2022. , in addition to The “Vision 2030” programs contributed to the promotion of digitization and innovation and provided a strong economic environment, in addition to the large inflow of international institutional capital.
Hotel projects
On the other hand, Umm Al-Qura Company for Development and Reconstruction, the owner and developer of “Massar”, announced the destination of the 100 billion riyals ($26.6 billion) and the strategic partner of the “Future Investment Initiative Foundation” made. on the sidelines of the conference, the signing of an agreement to establish and operate his package of hotel projects worth a total of almost two billion dollars, in the presence of Engineer Saleh Al-Rasheed, chairman of the Royal Commission for Makkah and the Holy Places.
The efforts of the “Massar” destination in its quest to set new and international standards within the hospitality sector in the region led to the appointment of international operators. The agreement included the international hospitality brands “Kempinski” and “Taj” for the first time in Mecca to take over the operations of two five-star hotel towers, In addition to the residential tower of the first brand, this hotel group occupies a unique location in the central area, only 500 meters from the Holy Mosque, and contains a commercial complex with an area of ​​more than 43,000 square meters, and offers a variety of parking spaces and a stop for high-frequency buses.
Last July, the “Massar” destination signed a strategic partnership contract with the Future Investment Initiative Foundation, as part of its zeal to effectively contribute to the Foundation’s work and its interest in improving the positive impact on humanity, and supporting various initiatives in its four fields: artificial intelligence and robotics, education, health and sustainability.
carbon credit
On the other hand, the Public Investment Fund yesterday, during the results ceremony of the participants in the auction of the Voluntary Market Initiative for Carbon Credit Trading during the conference during its sixth session in Riyadh, the success of the trading of 1.4 million tons of carbon announced credit in the largest auction of its kind in the world.
The auction witnessed the participation of 15 leading national and regional entities in the region, and Aramco, Olayan Financial Company and Ma’aden bought the largest number of carbon credit units in the auction. Other participants include the Saudi National Bank, Saudi Airlines, SABIC, the International Islamic Trade Finance Corporation, Inowa, a subsidiary of NEOM, Gulf International Bank, Yanbu Cement Company, ACWA Power, Saudi Motorsports Company, and Zamil Group. to Abdul Latif Jameel Company, and the Saudi Golf Company.
CORSIA criteria
The carbon credit certificates offered during the auction are in accordance with CORSIA criteria registered in the VERA program, which contributes to enable companies to contribute to the achievement of zero neutrality, in addition to purchasing securing carbon credits to reduce carbon emissions in value chains.
The Voluntary Market Initiative for Carbon Credit Trading plays an important role in enhancing the efforts of the Public Investment Fund to support the Kingdom’s initiatives to promote investment and innovation to counter the impact of climate change, and to achieve zero neutrality in the country to be achieved by 2060.
The Fund plays a key role in supporting Riyadh’s efforts to meet the challenges of climate change as an engine for development and economic diversification.
The voluntary market initiative for carbon credit trading is a continuation of the Fund’s initiatives in this area, including the announcement of the completion of the issuance of the first green international bond worth $3 billion, and the program for renewable energy, which supports the development of 70 percent of the country’s renewable energy generation capacity by 2030 in line with the goals The Kingdom’s ambitious vision.


Saudi Arabia

Economy

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