Saudi Arabia gets $3.8B foreign investment for King Salman Park

Saudi Arabia’s ambition to build the world’s biggest urban park has received a $3.8 billion vote of confidence from foreign investors.

The King Salman Park Foundation said on Tuesday that the new funds raise the total investment in the Riyadh mega-project to more than $5.3 billion.

The development, launched in 2019 under Saudi Crown Prince Mohammed bin Salman’s Vision 2030 economic overhaul plan, calls for construction of offices, homes, hotels, schools and shopping centers within the 17 square-kilometer (6.6 square-mile) metropolitan oasis, along with the planting of more than 1 million trees.

“Securing investment of this scale, supported by international capital and expertise, is an important milestone,” the foundation’s CEO George Tanasijevich said. 

The Daily Circuit: Global oil shock escalates + ADIA-Ardan property platform

In today’s Daily Circuit, we’re reporting on Saudi Arabia collecting $3.8 billion in foreign investment for its massive King Salman Park project, ADIA’s joint venture with Paris-based Ardan to set up a real estate secondaries platform, soaring prices for chemical fertilizers due to the shutdown of the Strait of Hormuz, and budget cutbacks at Oman’s OQ Exploration. But first, debate over whether to release as much as 400 million barrels of global strategic oil reserves. 

Governments around the world are scrambling to contain the escalating shock to energy markets from the Iran war, with oil traders tracking disruptions to Gulf exports and tanker traffic as officials weigh emergency measures to stabilize supplies.

Officials from the International Energy Agency are discussing what could be the largest coordinated release of strategic oil reserves in history – about 300 million to 400 million barrels – far exceeding the 182 million barrels released in 2022 after Russia’s invasion of Ukraine, Bloomberg reports.

Saudi Arabia, the UAE and other Gulf producers are assessing how much crude they can continue exporting as tanker insurers and shipping companies review the risks of operating in the region. Many cargoes have been delayed and freight rates for vessels willing to enter the Gulf have surged as the conflict intensifies.

At the same time, officials are studying whether alternative routes – including Saudi pipelines that bypass the Strait of Hormuz and export terminals on the Red Sea – can help keep oil moving if shipping disruptions worsen, The Wall Street Journal reports. The U.S. and its allies are also discussing naval measures to safeguard commercial traffic through the Gulf.

Energy traders say the combination of possible supply outages, tanker disruptions and a record emergency stockpile release has turned the oil market into a day-to-day calculation of how quickly governments can offset the barrels at risk from the conflict.

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UAE and Ecuador seal trade accord with $3B in potential deals

Undeterred from pursuing its long-term investment objectives amid Iranian bombardment, the UAE signed a trade pact with Ecuador on Sunday, with more than $3 billion in potential deals on the table.

Dr. Thani Al Zeyoudi, UAE Minister of Foreign Trade, signed the Comprehensive Economic Partnership Agreement at a ceremony in the capital city of Quito on Sunday.

It followed a visit to Ecuador by Abu Dhabi Crown Prince Khaled bin Mohamed, who met with President of Ecuador Daniel Noboa on Sunday ahead of the pact signing.

Among the potential deals is a $250 million collaboration between the UAE’s EDGE Group and Ecuador’s Ministry of National Defense. Ecuador is the fourth Latin American country to sign a CEPA with the UAE, joining Costa Rica, Chile and Colombia.

Al Zeyoudi said the UAE is Ecuador’s largest trading partner across the Arab world and Africa, accounting for about 30% of total trade with the regions combined.

Egypt receives $2.3 billion IMF payout after review of reforms

Egypt has secured about $2.3 billion in funding from the IMF after completing two reviews of its reform program.

The payout follows a preliminary agreement reached in December covering the latest revisions of Egypt’s economic overhaul and its climate-focused financing program.

In its latest monetary policy report, the Central Bank of Egypt said the country’s macroeconomic outlook is “cautiously improving,” supported by investment from the Gulf and other countries, along with stronger tourism and money sent home by Egyptians working abroad.

Still, the IMF warned that uneven reforms, high debt and regional tensions continue to pose risks.

Saudi Arabia softens regional HQ rule after surpassing initial target

Saudi Arabia has softened its strict regional headquarters rule just two years after requiring foreign firms to base their Middle East hubs in the kingdom to win government work.

Officials said government agencies may now seek exemptions to award contracts to companies that don’t have Saudi regional headquarters, using its Etimad procurement platform.

The Local Content and Government Procurement Authority is still setting tight conditions, allowing such bids only when a company is the sole qualified bidder or offers a price at least 25% lower than competitors.

Small contracts worth 1 million riyals ($266,000) or less are automatically exempt, and cabinet ministers can adjust the thresholds or halt the exceptions if they deem necessary.

The shift comes as more than 700 multinationals have already moved regional headquarters to Riyadh, well above the government’s earlier target of 500 by 2030.

Saudi startups dominate Gulf venture capital funding

Saudi startups attracted the most venture capital in the Gulf last year, raising more than double the funding of their Emirati counterparts.

Yet in AI, the UAE leads, accounting for 60% of regional AI funding, while Saudi Arabia captured just 29%, according to research from Magnitt.

The difference reflects the kingdom’s slower adoption, despite investing in foundational infrastructure.

“On a high level, the UAE and KSA have differentiated strategies when it comes to developing their AI ecosystems,” Sam Marchant, founder of Dubai-based VC Forward Pursuit, told Arabian Gulf Business Insights.

The gap, however, may narrow as Saudi Arabia ramps up 2.2 gigawatts of AI compute capacity. Meanwhile, the UAE’s earlier infrastructure build-out and rapid adoption has made it easier for entrepreneurs to ideate, validate and scale AI startups in the country.

Saudi Arabia to revise Vision 2030 plan as PIF courts foreign capital

Saudi Arabia is getting ready to unveil an updated blueprint for Crown Prince Mohammed bin Salman’s Vision 2030 overhaul of the kingdom’s finances.

Finance Minister Mohammed Al-Jadaan said on Sunday that discussions on the government’s new five-year plan are underway at this week’s economic conference in AlUla that takes into account Saudi Arabia’s declining oil revenues and resulting budget shortfalls.

“We continue really to reprioritize, rework our policies, making sure that we enhance as we go to ensure that we enable the private sector to lead the economy,” Al-Jadaan told Bloomberg.

The government is recalibrating some of its most ambitious projects, including suspending construction of the giant cube-shaped Mukaab in Riyadh’s $50 billion New Murabba development and scaling back the $1 trillion Neom development’s futuristic city called The Line.

Saudi officials have also postponed the 2029 Asian Winter Games at Neom’s Trojena resort and reduced the original scope of Neom’s sprawling development to focus on what are projected to be the most promising sectors, such as tourism, logistics and technology.

Saudi Arabia’s Public Investment Fund, meanwhile, will be testing the appetite of foreign investors to put their money in the kingdom, including in the sovereign wealth fund’s 120 portfolio companies, at this week’s PIF Private Sector Forum, Arabian Gulf Business Insight reports.

Egypt hatches $1 billion plan to nurture projected 5,000 startups

Egypt has rolled out a National Startup Charter, unveiling a $1 billion plan to turn young companies into engines of jobs and growth.

The five-year program is designed to back about 5,000 startups and create half a million jobs as officials try to make entrepreneurship a mainstream career path, Arab News reports.

Egyptian startups have been gaining traction, pulling in $238 million in venture capital over the past year.

The charter promises simpler regulations, faster government approvals and better access to financing, addressing long-standing complaints about Egypt’s labyrinthine bureaucracy and red tape.

Qatar unveils $2 billion push for startups as Web Summit opens

Qatar committed $2 billion to support startups as its banner tech gathering opened to sold-out crowds, drawing more than 30,000 people.

The Qatar Investment Authority is planning to invest in five new venture capital funds, expanding an earlier created Fund of Funds and and taking its total commitment for startups to $3 billion. 

The funds newly included – Greycroft, Ion Pacific, Liberty City Ventures, Shorooq and Speedinvest – will open offices in Doha to help develop the city as a hub for tech entrepreneurs. 

“This year, we move from momentum to scale,” Sheikh Mohammed bin Abdulrahman Al ⁠Thani, Qatar’s Prime Minister and Minister of Foreign Affairs, said in a keynote address on Sunday at the opening of Web Summit Qatar, where he announced a raft of incentives, including a 10-year residency program for entrepreneurs, founders, investors, and senior executives.

“We invite you to put down roots and grow alongside a nation that invests in your future,” he said. 

Now in its third year, the Middle East’s franchise of the famed Web Summit in Lisbon drew a record 1,600 startups, 85% of which came from outside of Qatar. 

Lockheed opens Saudi software factory to boost tech industry

Lockheed Martin has opened a new software factory in Riyadh to speed development of advanced digital systems in Saudi Arabia.

The facility, officially launched on Sunday, will focus on rapid prototyping and advanced software practices to support modern command-and-control aeronautics systems.

It is being developed with Saudi partners, including Saudi Arabian Military Industries, and is designed to build local engineering and software talent.

The move aligns with Saudi Arabia’s push to localize high-value technology and expand the country’s digital capabilities.