ACWA Power and Saudi Aramco ink deals to boost renewables, hydrogen, and desalination

RIYADH: Saudi Arabia is exploring collaboration opportunities with India’s largest business conglomerate TATA Group in multiple sectors, including military, aviation, and electronics. 

According to a Saudi Press Agency report, the Kingdom’s Minister of Industry and Mineral Resources, Bandar Alkhorayef, met with officials of the group’s affiliates, TATA Defense, TATA Electronics Limited, and TATA Steel, where he discussed cooperation avenues. 

During the meeting, the Saudi minister outlined the economic diversification goals of the Vision 2030 program and highlighted investment opportunities in the country’s industrial sector.

The Indian conglomerate’s affiliate TATA Motors is already operating in Saudi Arabia, with the automobile manufacturer celebrating its 30th anniversary in the Kingdom in November. 

India and Saudi Arabia share a strong trade and bilateral relationship, and according to the latest report by the General Authority for Statistics, India was the second favorite destination for the Kingdom’s non-oil exports in November, with outbound shipments to the Asian nation amounting to SR2.52 billion ($670 million) — a rise of 19.43 percent compared to the previous month. 

During the meeting with Alkhorayef, Sukaran Singh, CEO of Tata Defense, showcased the company’s products, including military aircraft and vehicles. 

He also highlighted the firm’s expertise in designing, building, and operating military factories. 

TV Narendran, CEO of Tata Steel, showcased the company’s expertise in exporting materials in the construction, automotive, and supply chain sectors across various international markets. 

SPA added that Tata Electronics and Saudi Arabia’s National Industrial Development Center also discussed potential collaboration opportunities to foster the development of the semiconductor industry within the Kingdom. 

Alkhorayef’s visit to India had already seen a new deal prior to the latest meeting, with the countries agreeing to strengthen cooperation in the critical minerals sector on Feb. 4. 

The Saudi official and Indian Minister of Coal and Mines G. Kishan Reddy discussed building a resilient mineral supply chain to reduce import dependency and promoting joint ventures in the critical minerals sector to support the energy transition journey. 

Alkhorayef began his visit to India on Feb. 3, leading a high-level delegation from the industry ministry and the Local Content and Government Procurement Authority. The meeting aimed to enhance industrial collaboration with India and attract high-value investments.

Earlier this month, Saudi Arabia’s Deputy Minister of Finance for International Relations Khalid Bawazier met with Suhel Ajaz Khan, ambassador of India to the Kingdom, where they discussed bilateral relations and other issues of common interest. 

RIYADH: Saudi Arabia’s bank loans surged to SR2.96 trillion ($788 billion) in December, marking a 14.39 percent year-on-year increase, according to official data.

Figures from the Saudi Central Bank, also known as SAMA, revealed that corporate loans were the main driver, rising 18.6 percent to SR1.6 trillion.

This marks the highest annual growth for corporate loans among the lending activity data available in SAMA’s reporting since 2021.

Real estate activities dominated corporate lending, accounting for 21 percent of the total and rising by 33 percent to SR333.34 billion. This marks an increase from an 18.7 percent share in the same period last year.

Wholesale and retail trade accounted for 12.51 percent of corporate lending, reaching SR198.87 billion with an annual growth rate of 10.94 percent.

The manufacturing sector, a key component of Vision 2030’s economic diversification goals, represented an 11.51 percent share at SR182.95 billion.

Electricity, gas, and water supplies contributed 11.51 percent to the total corporate share, growing significantly by nearly 29.12 percent to reach SR182.94 billion.

Professional, scientific, and technical activities, though holding a smaller 0.51 percent share of corporate credit, witnessed the most significant surge, with a 40.76 percent annual growth rate to SR8.12 billion.

Financial and insurance activities loans followed real estate with the third-highest growth rate, increasing by 31 percent to SR136.6 billion.

On the personal loans side, which includes various financing options for individuals, the sector grew 9.87 percent annually to SR1.37 trillion. This expansion underscores the continued confidence in consumer lending and the Kingdom’s economic diversification strategies.

Saudi banks are significantly increasing their lending to the real estate sector, driven by strong demand, regulatory backing, and growing opportunities for public-private partnerships and foreign investment.

This expansion is occurring alongside a shift in monetary policy as interest rates begin to decline in line with the US Federal Reserve’s approach, creating a more favorable lending environment.

Industry experts at the Real Estate Future Forum highlighted the importance of real estate financing for financial institutions, with Ibrahim Al-Alwan, managing director and partner at Watheeq Financial Services, emphasizing that banks now hold substantial real estate portfolios, requiring effective regulation, risk management, and investment tools to optimize growth.

Structured financing solutions, such as securitization and real estate investment funds, also play a key role in attracting institutional and foreign investors.

Joe Jabbour, managing director and partner at Boston Consulting Group, highlighted that many investment structures currently in development are designed with foreign investors in mind, reflecting the sector’s international appeal.

The recent decision by Saudi Arabia’s Capital Market Authority to allow foreign investment in listed firms that own real estate in Makkah and Madinah further underscores efforts to expand capital inflows into the sector.

At the same time, major projects are reshaping the Kingdom’s real estate market, with the Public Investment Fund spearheading nine developments in the Asir region, four of which are already underway.

The region is also seeing rapid growth in hospitality infrastructure, with thousands of approved hotel rooms under development. As Saudi Arabia advances its Vision 2030 agenda, innovations such as AI-driven property solutions and 3D-printed construction are expected to further transform the sector.

The loan-to-deposit ratio in Saudi banks increased to 83.24 percent in December compared to 80.7 percent in the same period last year, according to SAMA data.

The LDR is a key indicator used by banks to measure the proportion of loans granted compared to the deposits they hold. In this case, even though the demand for loans has increased at a faster pace than deposit growth, the ratio has stayed below the regulatory limit of 90 percent.