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The government is moving at pace to expand energy and water output to meet growing demand from businesses and individual consumers. Saudi Arabia’s ambitious plans to upgrade its utilities networks, while aligning more closely to market prices, make the Kingdom an increasingly attractive proposition for investors. There is an established framework for private participation and a track record of government will to increase the role played by the private sector in the Kingdom’s transformation towards cleaner and renewable sources of energy, according to targets outlined in Vision 2030. This chapter contains interviews with Mohammed Al Mowkley, CEO, National Water Company; and Khaled Al Qureshi, CEO, Saudi Water Partnership Company.

Saudi Arabia’s energy sector remains the backbone of the economy. As of March 2020 energy operations were facing the twin challenges of low oil prices and sluggish demand as economies around the world ground to a halt following the outbreak of Covid-19. However, the fundamentals underpinning the Kingdom’s energy sector remain strong. The size of its endowment, the comparatively low cost of recovery and opportunities to tap into new natural gas fields all suggest that the country’s energy sector will be a valuable source of competitively priced fuel when the world’s industrial economies start up again.

Located on Saudi Arabia’s Red Sea coast, Jeddah is the Kingdom’s second most-populous city after the capital Riyadh, and serves as a key commercial and logistics centre. Recently completed and ongoing developments to enhance Jeddah’s transport infrastructure will continue to strengthen the city’s position as a key thoroughfare for both cargo and visitors to the holy cities of Makkah and Medina and the surrounding area. Although visitor numbers will dip as a result of the Covid-19 pandemic, in the long term the city will be able to leverage relaxed visa regulations and the increased capacity of its hotels. This chapter contains an interview with Mohammed Yousuf Naghi, Chairman of the Board of Directors, Jeddah Chamber of Commerce and Industry.

The holy sites of Makkah & Medina attract millions of pilgrims each year, and religious tourism remains central to their local economies. The world’s largest mosque, the Masjid Al Haram, also known as the Grand Mosque, is in Makkah and is home to the Kaaba, a shrine that Muslims consider the most sacred place in the world. While uncertainty remains surrounding Covid-19’s impact on the 2020 Hajj season, the bigger picture looks positive for the Kingdom’s two holy cities. The real estate sector is expanding alongside the Grand Mosque’s capacity, and more streamlined visa processes should encourage a larger annual influx of visitors. The key challenge for the government going forwards will be to ensure that transport and hospitality infrastructure keeps pace with the anticipated growth. This chapter contains an interview with Fahad Albuliheshi, Mayor of Medina.

The ongoing process of privatisation driven by Vision 2030 is slated to provide opportunities to assess or cover risk, both for the government and investors looking to take on state assets. Furthermore, as Saudi companies and citizens take up more financial tools, the insurance sector is likely to benefit. Coverage of risks in areas such as trade credit and investment in foreign markets have already emerged as more active segments, with new products targeting specific concerns such as seizure of assets by a foreign jurisdiction. However, downside risks remain for the Kingdom’s insurers. Volatile capital markets caused by the economic fallout from the global outbreak of Covid-19 may result in lower returns. As such, the insurance sector may well experience consolidation in the year ahead.

The ongoing liberalisation of capital markets provides a positive long-term outlook for Saudi Arabia’s alternative investment segment. The Kingdom is a regional leader in mutual fund activity, with the deepest and most varied investment pool in the GCC. Nevertheless, some structural hurdles remain to fund expansion in Saudi Arabia. The lack of arrangements for the mutual recognition of fund licences between the GCC states means that regional funds face constraints to distribution. At the same time, early-stage investment – which has traditionally been dominated by government funds and accelerator schemes – is starting to attract regional interest. With markets in turmoil as a result of the spread of Covid-19 in the first half of 2020, alternative assets may prove to be a more resilient part of the investment landscape.