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Access to finance tops obstacles for Saudi firms, survey finds

1

WHAT WE’RE TRACKING TODAY

Flexible hours start rolling out for Riyadh gov’t workers

Good morning, all. We lead today’s issue with a deep dive into corporate Saudi Arabia — the hurdles firms are facing, how they secure their capital, and how they compare to their regional peers.

Plus: How did Saudi M&A activity hold up last quarter? Where did the Kingdom’s net foreign assets stand at the end of April? And what new regulatory reforms are on the table to expand the asset-backed debt market?

Flexible hours for Riyadh gov’t workers

Riyadh is rolling out flexible working hours in a push to ease the capital’s notorious morning congestion, the Royal Commission for Riyadh City said on LinkedIn. The initiative lets staff stagger their arrival times within a four-hour window, with civil service entities clocking in any time between 5:30-9:30am, while government bodies under the Labor Law get a window of 7-11am.

Where it applies: The initiative covers over 50 government bodies in six business districts, including King Abdullah Financial District, Digital City, Roshn Front, Laysen Valley, Granada Business, and the Diplomatic Quarter.

The goal is mainly to smooth traffic flows. Spreading peak arrivals across a wider window is meant to flatten the rush-hour crunch in some of Riyadh’s dense employment hubs.

What we’re watching: The rollout is concentrated in marquee districts such as KAFD for now. How the staggered-hours model plays out in these high-density zones could shape whether it’s extended citywide.

EU trade agreement up next?

A long-stalled trade agreement between the GCC and the EU could be settled at a leaders’ summit in Riyadh this October, unnamed European and Gulf sources told Aleqtisadiah. The shape of the agreement is shifting, with officials discussing a move away from a single, all-encompassing framework towards sector-specific agreements — think renewable energy, digital trade, and industrial supply chains, according to the sources.

Britain lit the fuse: Brussels’ renewed urgency follows the conclusion of a trade agreement with the UK last month to remove duties on roughly GBP 580 mn worth of UK exports to the GCC annually.

The gripe: The hold-up has been the EU’s insistence on bundling in non-trade matters, head of the Gulf negotiating team and adviser at the Economy and Planning Ministry Raja Al Marzouqi told the news outlet.

Ain’t waiting around: The bloc has already signed with South Korea and is eyeing agreements with China, Turkey, and Indonesia, a pipeline that could see Gulf states lean towards bilateral arrangements at the EU’s expense if Brussels keeps dragging its feet, Al Marzouqi warned. For GCC economies recalibrating away from oil, faster trade integration means importing the capital and technical goods those new sectors will need, he said.

DATA POINT- The EU remains the GCC’s second-largest trading partner, underpinned largely by fuel imports.

BlackRock's Jafurah vehicle taps debt markets

Green Palm Bidco opened books for a USD-denominated bond issuance yesterday, Global Capital reported. The company — which BlackRock-led investors set up to take a stake in Aramco’s Jafurah gas field — is selling two senior secured tranches, with initial price talks landing at 185 bps over US treasuries for the 15-year tranche and 180 bps for the 20-year tranche.

More to come: The transaction, expected to raise around USD 2 bn, is the first in a series of issuances designed to chip away at a USD 7.8 bn bridge loan the consortium secured last year to buy into the natural gas field.

ADVISORS- Citi, HSBC, and JP Morgan are coordinators. Active bookrunners are Bank of America, First Abu Dhabi Bank, Mizuho, MUFG, SMBC, and Standard Chartered. Passive bookrunners are ABC International, Bank of China, China Construction Bank, and ICBC.


Earning well is not the same as investing well — and for most mid-level executives and entrepreneurs, the gap between the two is wider than they’d like to admit. The financial landscape has shifted. Regional markets are opening up, AI is rewriting how portfolios get managed, and Real Estate Investment Trusts (REITs) are entering the conversation.

And the questions that used to feel straightforward — buy or rent, fund the startup or play it safe, finance the car now or wait it out — are harder to answer than ever.

In Issue 2 of EnterpriseAM Money Matters, we get into the decisions that don’t have easy answers, because at this stage, playing it safe is the riskiest move you can make.

Tap or click here to subscribe to the Egypt edition, delivered to your inbox today, 11 AM Egypt & KSA.

Data point

10th place — that’s where Saudi Arabia ranked globally in the 2026 Kearney FDIConfidence Index, entering the world’s top 10 for the first time. The Kingdom also maintained its position as the third-ranked emerging market behind China and the UAE.

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***

The big story abroad

No single story is dominating the global front pages this morning — but among the stories making headlines:

#1- SpaceX will reportedly raise USD 75 bn in its highly anticipated IPO, selling 555.6 mn shares at USD 135 a pop, unnamed sources told Reuters. These figures put the firm’s valuation at USD 1.75 tn.

#2- Microsoft launched its own AI offerings at its Build conference to compete with proprietary models, including coding assistants and reasoning models, which would lower costs and reliance on OpenAI products. The tech giant also unveiled Project Solara, a family of prototype devices designed to host AI agents that carry out complex tasks autonomously.

#3- Investors seem bullish and unafraid: Concerns over inflation and elevated asset prices are trumped by optimistic sentiments, as financial markets currently exhibit “more greed than there is fear,” Goldman Sachs CEO David Solomon said. He added that so long as investors remain bullish, there is ample liquidity to absorb massive upcoming IPOs from companies like SpaceX, Anthropic, and OpenAI.

#4- The UN General Assembly has elected its next head. Bangladeshi Foreign Minister Khalilur Rahman narrowly defeated Cyprus’ Andreas Kakouris to secure the presidency of the UN General Assembly.

AND- The latest war updates: Iran launched fresh attacks on Kuwait and Bahrain last night — some failed en route and others were intercepted. In response, US forces launched “self-defense” strikes on Iran’s Qeshm Island.

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2

BUSINESS

Access to finance tops obstacles for Saudi firms

Over half of Saudi firms named access to finance as the single biggest obstacle to doing business in the World Bank’s latest Enterprise Survey (pdf), more than double the 22% average across the wider MENA region and the highest reading among the survey's comparator groups. Yet the same survey shows Saudi companies tapping bank credit far more readily than their regional peers, leaving a gap between how firms actually fund themselves and how they rank their constraints. The survey covered over 1k businesses interviewed between March 2025 and February 2026.

Unlike much of the region, Saudi firms are growing. Real annual sales rose 6.3%, outpacing the 5.2% recorded across MENA. Employment grew 5.9%, comfortably ahead of the regional figure. That makes the prominence of finance as a perceived obstacle all the more notable: these are firms expanding sales and headcount, not retrenching.

Saudi firms are unusual in how much they rely on banks. Banks financed 41% of capital expenditure, against just 15% across the region and 18% in high-income economies. Internal funds covered 58% of investment, a heavier external-credit mix than the regional norm, where firms self-fund 71%. Supplier credit and equity were both negligible.

The strain falls hardest on small firms: Some 60% of small companies cited access to finance as their top obstacle, against 29% of medium-sized firms and 28% of large ones. Only around 14% of small firms reported holding a bank loan, compared with 23% of large firms. The survey does not explain the gap, but it may reflect concentrated lending to larger, more established borrowers, collateral requirements, or simply unmet demand for credit in a fast-expanding, diversifying economy.

Firms import heavily but rarely export. Around 95% of manufacturers use imported raw materials or supplies, the highest share among the comparator groups and well above the 60% regional average. Only 1.2% export at least 10% of their sales directly, the lowest reading and a fraction of the 11% regional norm. Customs is not the bottleneck: exports clear in around two days and imports in two, against six to eight days regionally.

Training, research, and women’s participation lag well behind peers. Only 1.4% of firms offer formal employee training, against 21% across MENA and 39% in high-income economies, and just 1.3% spend on R&D. Roughly 11% introduced a new product or service and 4% a process innovation — both below regional levels. Women make up 11% of the full-time workforce, 1.8% of top managers, and hold ownership stakes in just 2.4% of firms — among the lowest in the survey.

Informality is minimal, but corruption surfaces at the permit window. Only 9% of firms reported competing against unregistered operators, against 36% across the region, and 95% were formally registered from the outset. Bribery incidence, at around 10%, sat below the 13% regional rate — though above the 4% high-income benchmark. Some 17% of firms said they were expected to offer gifts or informal payments to obtain a construction permit.

One bright spot: working with the state is fast. Operating licenses took about six days to obtain, against 21 regionally and 42 in high-income peers, and construction permits took 16 days. Senior managers spent just 4% of their time on regulatory compliance, and barely 1% of firms were required to meet tax officials, a fraction of the 35% regional figure.

The big question: The survey depicts a private sector that is growing, well-banked by regional standards, lightly burdened by red tape, and largely unburdened by the informality and power-supply problems that hold back its neighbors. The soft spots lie elsewhere — in SME credit access, near-absent direct exporting, thin spending on skills and innovation, and low participation of women. These are precisely the areas the Kingdom is counting on to build a more diversified, non-oil private sector, which raises the question of whether the next phase of reform can convert a stable, fast-growing business environment into one that lends deeper, exports more, and trains and includes a broader workforce.

3

M&A WATCH

PIF-backed stability keeps Saudi M&A volume rising despite regional war

Saudi M&A activity held up in 1Q 2026 despite a broader regional slowdown, recording 24 transactions (up 4% y-o-y) worth USD 689 mn, according to an Ansarada Middle East report (pdf). Across MENA, however, total M&A value fell to USD 23.3 bn from USD 31.3 bn a year earlier, and volumes were down to 196 agreements from 207.

Infrastructure + tech led the market: Transportation generated the highest agreement value across the region at USD 8.2 bn from just nine transactions, pointing to continued appetite for large-scale infrastructure assets. Technology remained the busiest sector by volume, recording 68 transactions worth USD 7.3 bn, driven by continued interest in AI, fintech, and enterprise software.

The defensive sectors are still showing up: Energy and natural resources attracted USD 2.2 bn across 18 transactions, while healthcare drew USD 1.9 bn from 19 transactions and industrials generated USD 1.6 bn across 23 transactions. Communications, media, and entertainment accounted for USD 740 mn from seven transactions.

What’s keeping transactions flowing? Economic diversification programs, technology investment, cross-border expansion, and sustained capital deployment are helping sustain M&A activity across the region. Sovereign wealth funds are also providing a steady anchor, supporting dealmaking through long-term investment strategies, national transformation plans, and infrastructure priorities even as geopolitical uncertainty weighs on short-term sentiment.

Timelines stretch, conviction doesn’t: “The conflict may be reshaping [transaction] timelines, but it’s not reshaping the region’s thirst for ongoing M&A activity,” Ansarada Managing Director Justin Smith told Arab News. In Saudi Arabia, the conflict is making investors more cautious and thorough rather than deterring them altogether, Smith said. While enhanced due diligence is extending dealmaking timelines, appetite for transactions remains intact.

REMEMBER- MENA M&A activity slumped 74% y-o-y to USD 18.8 bn in 1Q, according to LSEG, as the US and Israel’s war on Iran weighed on market sentiment. Inbound M&A saw the sharpest decline, plunging 90% to a 10-year low of USD 4.6 bn, while outbound M&A fell 55% to USD 11.5 bn, its lowest level in two years.

Looking ahead, transportation and technology are expected to remain the most active sectors for dealmaking through the rest of 2026, while healthcare and industrials continue to draw strategic investors. Despite ongoing geopolitical uncertainty, the region’s M&A momentum remains intact.

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4

REGULATION WATCH

Saudi regulators target asset-backed debt market expansion

Tadawul is laying the groundwork for a new generation of sukuk and debt instruments. Proposed amendments (pdf) published by the Saudi Exchange would create a dedicated framework for securitization and asset-backed debt issuances, expanding the market beyond traditional corporate debt. The draft rules are open for consultation until 14 June.

What’s changing? The proposals would separate the listing framework for debt instruments from equities, while introducing disclosure requirements tailored to securitized transactions. Issuers would need to identify key parties involved in the structure — including sponsors, originators, and trustees — and provide details on underlying assets, credit ratings, and credit enhancements.

Opening the door to asset-backed financing: The changes would allow issuances backed by specific assets, meaning investors would wholly assume the risk of the underlying asset pool rather than the issuing company, Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings, told Al Arabiya (watch, runtime: 5:12). He added that the new instruments could diversify funding sources and provide companies with more flexible financing options, although they will require greater transparency and investor understanding due to their complexity.

And more oversight: The proposed rules would also expand Tadawul’s oversight of securitization transactions, including restrictions on originators selling asset-backed debt instruments during mandatory lock-up periods.

Who benefits? Al Natoor expects institutional investors to be the primary adopters initially, given the complexity of the instruments. Asset-backed sukuk could also attract strong demand from shariah-compliant investors because of their direct link to tangible assets. However, the amendment’s ultimate impact will depend on market uptake by issuers and investors, according to Al Natoor.

The move builds on a broader regulatory push to develop Saudi Arabia’s securitization market, including last year’s reforms to special purpose entities (SPEs) and the CMA embedding debt crowdfunding into the mainstream capital market.

5

BANKING

Net foreign assets hit SAR 1.54 tn in April

Net foreign assets in the Kingdom’s banking sector climbed to SAR 1.54 tn in April, edging up from SAR 1.51 tn in March, according to the Saudi Central Bank’s latest monthly bulletin (pdf).

What drove the bump? It mostly comes down to commercial banks shrinking their deficits. Their net foreign asset deficit narrowed to SAR 230.5 bn, down from the SAR 262.3 bn deficit they were carrying in March. Meanwhile, Sama’s own net foreign assets dipped to SAR 1.77 tn from SAR 1.78 tn the previous month.

On the broader front, commercial banks saw total assets hit SAR 5.08 tn by the end of April — up from SAR 5.07 tn in March, marking a 7.8% y-o-y jump. Total bank credit across all maturities also grew 8% y-o-y to reach SAR 3.38 tn.

Where did the money go? Personal loans dominated the credit market with a total of SAR 1.45 tn, followed by corporate credit to real estate activities (SAR 411.1 bn), electricity, gas, and water supplies (SAR 231.6 bn), and wholesale and retail trade (SAR 219.1 bn).

Mortgages are booming: Bank-financed residential mortgages surged 51.1% m-o-m to SAR 6.3 bn in April, driven by 9.6k new contracts, up sharply from 6.4k in March.

Import financing bounces back: Settled letters of credit (LCs) financing private-sector imports fell 20% y-o-y to SAR 12.7 bn in April. Looking m-o-m, however, that’s a healthy step up from March’s three-year low of SAR 12.03 bn.

The drivers: Building materials accounted for the largest share at SAR 3.48 bn, up 28.4% m-o-m. Other major categories included motor vehicles (SAR 1.67 bn), food items (SAR 1.50 bn), appliances (SAR 699 mn), and machinery (SAR 465 mn).

New LCs — our look-ahead for imports — totaled SAR 10.81 bn by the end of the month, up 11.4% m-o-m. This included SAR 2.54 bn for building materials, SAR 1.76 bn for motor vehicles, SAR 1.19 bn for food items, SAR 806 mn for machinery, and SAR 690 mn for appliances.

ALSO- Broad money supply (M3) grew 10% y-o-y to SAR 3.36 tn in April. Demand deposits made up 43.7% of the total, followed by time and savings deposits (39.3%) and other quasi-money deposits (9.4%). Total liabilities in the survey reached SAR 5.69 tn, up 7% y-o-y.

SOUND SMART- M3 is the broadest measure of money supply in an economy. It includes banknotes, current accounts, and other money that can be quickly mobilized (what econ nerds call M2), as well as large time deposits, institutional money market funds, short-term repurchase agreements, and larger liquid funds.

Government and quasi-government bonds rose to SAR 666.9 bn, an 8.1% increase compared to April 2025. Bank credit to public sector enterprises stood at SAR 255.8 bn, representing a 17.2% y-o-y jump.

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ALSO ON OUR RADAR

Humain, Nvidia partner in autonomous transport + Stock fraud lawsuit against Raydan board members

Humain-Nvidia alliance steps into autonomous transport

Humain is partnering with Nvidia to support the development of Saudi Arabia’s autonomous transport ecosystem, according to a post on X. Nvidia’s Drive Hyperion platform will provide the infrastructure, AI capabilities, and operational scale needed to deploy Level 4 autonomous vehicles across the Kingdom.

Level 4? Level 4 autonomous vehicles can drive themselves without human input within designated areas or operating conditions, handling all driving tasks and safely stopping if they encounter a situation they can’t manage. The technology is commonly used for robotaxis, shuttles, and logistics vehicles operating in mapped or controlled environments, similar to the ongoing WeRide-Uber robotaxi pilot operating in Riyadh.

Humain + Nvidia go way back: Humain joined forces with Nvidia in May 2025, straight after its launch, to develop 500 MW of AI data centers over five years. They expanded their collaboration in November after the US Commerce Department approved sales of advanced AI semiconductors to the Kingdom, providing Humain with access to GB300 processors.

Investor files suit against Raydan board

CMA approves class action suit against Raydan Food: The Capital Market Authority approved the registration of a class action lawsuit filed by an investor against certain members of Raydan Food Company’s board of directors and audit committee, according to a statement.

What for? The suit alleges the accused created a misleading impression regarding the company’s stock value by ignoring accounting standards, approving financial statements known to contain violations, failing to assess investment impacts, and failing to report asset losses.

A 90-day window: Investors who held shares between 29 March 2019 and 30 March 2022 have 90 days to apply to join the class action suit.

7

PLANET FINANCE

Muted AI exposure and war spell trouble for Indian equities as AI shakeout puts other EMs ahead

Foreign investment in Indian equities hit its lowest level in nearly 10 years, with Bloomberg reporting that overseas holdings dipped to INR 7.3 tn at the start of June. The slide marks a sharp reversal for a market that spent years as one of the standout destinations in emerging markets, drawing investors in with its strong GDP growth, expanding middle class, and young demographic dividend. Two converging forces are now driving the retreat.

The US-Iran conflict has rattled global investor sentiment, but India is feeling the shock more acutely than most. As the world’s third-largest oil importer, India is directly exposed to the elevated oil prices triggered by the conflict. Higher energy costs feed quickly into inflation, widen the current account deficit, and put downward pressure on the INR, which has already fallen from around INR 90 to past INR 95 against the USD.

The resulting risk-off sentiment has accelerated foreign outflows that were already underway: India recorded USD 17 bn in outflows by late 2025 as US tariff pressures and weaker global sentiment began to bite, with overseas ownership of NSE-listed firms falling to under 17% — around a 15-year low.

The second headwind is structural and longer-term, but investors are pricing it in now. India’s economic model has long relied on a large, skilled, English-speaking workforce to power its services and outsourcing sectors — but that is precisely the category of labor most exposed to automation in the current AI cycle. This could threaten a core pillar of India’s GDP, and — unlike Taiwan or South Korea — India has a limited presence in the semiconductor and AI infrastructure supply chains that stand to benefit most from the current technology wave.

Despite the foreign exodus, there’s still been activity. The IPO market closed 2025 with a record USD 22 bn raised across more than 200 approved listings. The caveat? Some 75% of allocations were absorbed by domestic institutions and retail investors.

Who’s picking up India’s slack? The capital rotating out of India is, in part, finding a home in markets better positioned for the AI era. Taiwan and South Korea both have deep semiconductor and AI infrastructure exposure that India lacks. Taiwan has been climbing toward India’s spot as the fifth-largest global equity market by capitalization — driven largely by TSMC, which climbed more than 25% in April alone. South Korea’s Kospi has recently hit a record high.

MARKETS THIS MORNING-

Japan’s Nikkei hit record highs in early trading, echoing gains felt across Wall Street. The benchmark is up over 2% this morning with gains across automakers and tech stocks fueling the rally. The Shanghai Composite is looking at more modest gains, while the Hang Seng is in the red, down 1.2%.

TASI

11,016

+0.1% (YTD: +5.0%)

MSCI Tadawul 30

1,469

+0.2% (YTD: +5.9%)

NomuC

22,966

0.0% (YTD: -1.4%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

4.25% repo

3.75% reverse repo

EGX30

52,927

+0.1% (YTD: +26.5%)

ADX

9,621

-0.3% (YTD: -3.7%)

DFM

5,732

-0.7% (YTD: -5.2%)

S&P 500

7,610

+0.1% (YTD: +11.2%)

FTSE 100

10,374

+0.3% (YTD: +4.5%)

Euro Stoxx 50

6,108

+1.2% (YTD: +5.4%)

Brent crude

USD 96.00

+1.1%

Natural gas (Nymex)

USD 3.17

+0.2%

Gold

USD 4,492

-0.6%

BTC

USD 67,302

-5.8% (YTD: -23.2%)

Sukuk/bond market index

913.20

-0.8% (YTD: -0.7%)

S&P MENA Bond & Sukuk

151.63

-0.4% (YTD: -0.2%)

VIX (Volatility Index)

15.77

-1.7% (YTD: +5.5%)

THE CLOSING BELL: TADAWUL-

The TASI was up 0.1% yesterday on turnover of SAR 5.7 bn. The index is up 5.0% YTD.

In the green: Dar Albalad (+6.9%), Saudi Cable (+4.6%), and Arabian Pipes (+4.5%).

In the red: Saudi Industrial Development (-5.0%), Saleh Alrashed (-4.4%), and Rasan (-4.4%).

THE CLOSING BELL: NOMU-

The NomuC was flat yesterday on turnover of SAR 26 mn. The index is down 1.4% YTD.

In the green: Digital Research Company (+12.1%), Sahat Almajd (+9.9%), and Service Equipment (+6.6%).

In the red: Lana Medical (-14.2%), Fadeco (-9.7%), and Ratio (-9.3%).


JUNE

21-24 June (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh Front Expo.

21-24 June (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

22-24 June (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

AUGUST

30 August-1 September (Sunday-Tuesday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

31 August-3 September (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

SEPTEMBER

8-10 September (Tuesday-Thursday): The WTM Spotlight Riyadh, Riyadh Front Exhibition & Conference Center (RFECC), Riyadh

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

28 September-1 October (Monday-Thursday): The International Conference on Theory and Practice of Electronic Governance (ICEGOV), Prince Sultan University, Riyadh.

OCTOBER

12-15 October (Monday-Thursday): World Energy Congress, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

28-29 October (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

28-29 October (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

NOVEMBER

11-12 November (Wednesday-Thursday): Aluminum Arabia, The Arena, Riyadh.

16-19 November (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Centre (Malham), Riyadh.

25-29 November (Wednesday-Sunday): Aero Middle East and Sand & Fun, Thumamah Airport, Riyadh.

Signposted to happen sometime in 2026:

Signposted to happen sometime in 2027:

  • The World Water Forum takes place in Riyadh;
  • The Ocean Race finishes in Amaala on the Red Sea;
  • Riyadh-Kudmi transmission line to be completed;
  • Capital Markets Forum takes place in March in Riyadh.

Signposted to happen sometime in 2Q 2027:

  • The Hail Region Water Networks Project is expected to be completed.

2027

FEBRUARY

1-3 February (Monday-Wednesday): Energy Regulators Regional Association annual conference, Riyadh.

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