Saudi’s surprise return to debt markets

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Tankers carrying Saudi oil struck in Hormuz

Good morning, friends, and welcome to a Kingdom where the money has picked a direction, and everything else is rearranging itself to face the same way.

Start with the sovereign: A borrowing plan that was declared finished in May is back at the window in September, and the order book didn’t blink. The plan may have changed, or the change of course was the plan to begin with. Neither option is a bearish read on the market — USD 12 bn of demand is the market telling you the appetite ceiling hasn’t been hit.

Then look down the ticker…: One of Tadawul’s steel names is, on the revenue split, mostly a power company now. The process took three years, happened without a name change, and serves as a sign that the same gravity that’s acting on the government is also moving a mid-cap.

… And then there’s Leap, which followed a familiar blueprint on its second day, getting smaller and more crowded at the same time. While the first day is for the big headline announcements, day two is for the people who came to actually close something. This year, they were closing on data centers, increasingly with local capital rather than the foreign cheque that used to be the headline.

It’s a lot of business moving as usual, even as regional tensions continue to flare. Two tankers carrying Saudi oil were struck within minutes of each other on Monday in the Strait of Hormuz, Reuters reports, citing Kpler and Marisks. The tankers — one of which was Saudi-flagged, the other Liberian-flagged — were each carrying 2 mn bbl of Saudi crude, which they loaded at Juaymah last week.

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ANB goes USD hunting

Arab National Bank (ANB) is lining up a USD-denominated Additional Tier 1 (AT1) capital sukuk offering, although there’s no word yet on how much it plans to raise or the final terms, ANB said in a Tadawul filing. The sukuk will be offered through a special-purpose vehicle under the bank’s newly updated international AT1 sukuk program.

ADVISORS- ANB appointed ANB Capital, Arab Bank, Arqaam Capital, ASB Capital, Citigroup Global Markets, Goldman Sachs International, HSBC, Mizuho International, Standard Chartered, and Warba Bank as joint lead managers and bookrunners.

Robots in the ring

Humanoid robots are stepping into the ring in Riyadh: Hero Esports will stage the Middle East’s first humanoid robot kickboxing event, CyberHero x Riyadh, on Wednesday, 9 September, with 10 EngineAI T800 robots facing off in a live combat showcase, according to a press release. Robots from other manufacturers are also expected to take part. Backed by Savvy Games Group and Tencent, Hero Esports plans to take CyberHero to other cities after Riyadh.

A Seychellois visitor

Seychelles Vice President Sebastian Pillay is in town this week to hold discussions with officials from the Arab Bank for Economic Development in Africa (BADEA), according to a statement. The talks will focus on securing financial backing for Seychelles' priority national development projects ahead of the bank’s next board meeting later this year.

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The big story abroad

The regional war is once again coming to a head, with the US launching a barrage of airstrikes on Iran yesterday, attacking Islamic Revolutionary Guard Corps targets. The strikes — which focused on air defence and radar systems alongside minelaying and communications capabilities — were in retaliation for Tehran’s attempt to lay mines in the Strait of Hormuz, US President Donald Trump said.

Tehran’s response? Iranian parliament speaker Mohammad Bagher Ghalibaf warned that US attacks could lead to a blockade on all oil exports through the critical waterway. Meanwhile, Iran’s military threatened to inflict high costs on US forces in the region.

Bond crisis continues: Global bond markets extended their slide yesterday as worries over inflation and government debt threatened higher borrowing rates for consumers and enterprises. Global bond yields reached multi-decade highs in Japan, the UK, Germany, France, and the US, where the 10-year Treasury yield edged close to 4.8%, a level not seen since January 2025.

In the M&A space: Nestle is looking to sell its mainstream vitamins and supplements unit to US private equity outfit Yellow Wood Partners for USD 1 bn as CEO Philipp Navratil limits the Swiss foodmaker’s strategic scope. The transaction — featuring brands like Nature’s Bounty and Osteo Bi-Flex — continues a series of divestitures, following this year’s sale of half of the firm's water business.

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DEBT WATCH

Saudi returns to the international debt market months after saying it was done for the year

Saudi Arabia is back in the international debt market — which it said in May it was done with for the year. The Kingdom issued USD 3.25 bn in two benchmark-sized USD sukuk tranches at five and 10 years, with the order book exceeding USD 16.5 bn yesterday, according to a statement by the National Debt Management Center.

The terms: Initial price thoughts came at c.100 bps over US Treasuries for the five-year tranche and 110 bps for the 10-year notes, before tightening to final spreads of 70 bps and 80 bps, respectively, Bloomberg reports. The Reg S notes are expected to be rated Aa3 by Moody’s and A+ by Fitch, according to Zawya.

This is the conditional return that was flagged earlier this year: The National Debt Management Center (NDMC) said in May that it had largely finished its borrowing for the year, with 90% of financing needs secured before the war. While the NDMC named private channels and local markets as the “primary” sources for anything further, it reserved the right to tap international public markets “when favorable [tailwinds] arise.”

The fiscal case for using that option has hardened in the past four months. The Kingdom ran a SAR 125.7 bn deficit in 1Q alone — more than double 1Q 2025 and most of the SAR 165.4 bn projected for the full year — and financed it all through debt markets. The most recent issuance also comes as the NDMC and Aramco are in separate negotiations for new loans from international banks.

REMEMBER- The Kingdom has remained one of the most active emerging-market borrowers this year. Aramco raised USD 4 bn in February and the PIF secured another USD 7 bn in May, marking the fund’s first hard-currency issuance since the US-Iran war began.

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INDUSTRY

Al Yamamah Steel leans into power and renewables as the construction pipeline thins

Al Yamamah Steel Industries is now more an energy company than a steel one. Electricity and renewables generate around 60% of the Tadawul-listed firm’s revenue, CEO Sahal Al Thobaiti told EnterpriseAM on the sidelines of Big 5 Construct Saudi. The shift has played out over three years as the company moved away from its traditional construction materials base toward steadier, more diversified income, he explained.

Why it matters: The construction materials supplier now pulling 60% of its revenue from power and renewables has landed on steadier ground just as its core market wobbles. Al Thobaiti didn’t sugarcoat the pressure. “Liquidity volume right now is a bit weak,” he said, while “project volume right now, under current conditions, has some shortage in tendered projects.” Add the higher ins. and shipping costs tied to regional instability, and contractors and suppliers across the sector are feeling the squeeze — the kind of environment where a diversified revenue base earns its keep.

The data backs up the play: The construction pipeline lost steam in July, with just 11 contracts worth SAR 9.6 bn awarded, according to the Saudi Contractors Authority. That’s less than half the 23 projects projected in its June outlook and well below June’s SAR 29.5 bn across 25 contracts and May’s SAR 30 bn+.

The tougher backdrop hasn’t yet dented earnings: Al Yamamah’s net income reached SAR 148 mn in the nine months ended June 2026, up from SAR 42 mn, while revenue rose 6.6% y-o-y to SAR 1.6 bn.

The company has also set its sights abroad: Al Yamamah is studying prospects in new sectors and export markets, including Europe and the Americas. “No divestments so far, but partnerships may happen in the future,” Al Thobaiti said.

And it’s keeping funding options open: For its next leg, Al Yamamah is considering a mix of funding routes as it evaluates future projects, including internal funding, commercial bank loans, and financing from the Saudi Industrial Development Fund. Capital markets could also come into play. “All options are on the table; nothing is final yet, depending on the project,” Al Thobaiti said when asked whether bonds or sukuk issuances were under consideration.

REMEMBER- Al Yammamah has been working on bringing billets in-house. The company last week secured SAR 500 mn in seven-year, shariah-compliant financing from Arab National Bank for a new billet manufacturing plant under its rebar subsidiary, following a SAR 270 mn equipment contract awarded to Italy’s Danieli in July. Due for completion by 2029, the plant will let Al Yamamah produce billets, the semi-finished steel used to make rebar, in-house rather than relying entirely on external suppliers.

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Tech

Day two of Leap: Homegrown data centers, foreign clouds, and money moving both ways

The compute buildout found its customers at Leap yesterday. Roughly USD 2.5 bn in commitments ran in both directions: Saudi firms put more than USD 2 bn into new capacity, while Aramco, the Tourism Ministry, and the education sector signed up to use it. Foreign vendors, meanwhile, spent the day proving they’re here to stay with licenses, R&D centers, and localized manufacturing.

Homegrown money piles into data centers

  • Al Moammar Information Systems (MIS) said it will spend USD 1.2 bn expanding its data centers to 192 MW of total capacity;
  • NHC Innovation will invest USD 880 mn in data centers at Khuzam Digital Valley, targeting 65 MW by 2033;
  • Zain KSA signed a non-binding MoU with DataVolt to explore building data centers in the Kingdom, capacity it would share with government, enterprise, and cloud providers.

Foreign cloud plants local flags

  • Mobily and ByteDance’s BytePlus will jointly put in more than USD 150 mn to launch BytePlus cloud services in the Kingdom;
  • India’s Zoho will invest SAR 500 mn to expand its Riyadh office and hire Saudi talent;
  • China's Tencent Cloud secured a Saudi operating license, cleared to serve government bodies and financial institutions, and will build on the c. USD 150 mn it has invested so far. It struck six to eight infrastructure and AI agreements at the show, including migrating Trucker’s systems to its local cloud;
  • And Humain worked the domestic side, investing in and partnering with Arabic.AI and Tarjama to build Arabic translation and document-intelligence tools. The tools target Saudi enterprises first — contracts, tenders, regulatory filings, and digitizing legacy archives;
  • Some Saudi money heads the other way: Vision Invest and the Africa Finance Corporation are leading a USD 300 mn strategic investment in WIOCC to expand digital infrastructure and connectivity across African markets.

Oil, tourism, and schools line up as buyers

  • Aramco and Aramco Digital partnered with Sony’s semiconductor unit to develop an industrial-AI model for predictive maintenance;
  • The Tourism Ministry and Saudi Accenture partnered to pilot AI across the sector — visitor-flow management, multilingual assistants, VR — and build tourism-specific language models;
  • Solutions by stc signed a five-year revenue-sharing agreement with Tatweer for Education Technologies to develop Madaris, its digital platform for private schools, investors, parents, and students.

Made in Saudi push widens

  • Nokia opened a Riyadh R&D center for AI network-automation software — the tools that let networks tune themselves and cut power draw — and will use it to work on 6G and Made in Saudi software for its customers;
  • HPE stretched its own Made in Saudi program from hardware to fully localized solutions, and opened a Saudi Innovation Center with Intel to back AI startups and local talent.

And the spillover reaches the startups

Saudi climate-tech startup Remedium raised USD 1.5 mn in a pre-seed round, led by Kaltaire Investments, for a platform that helps companies measure and cut their carbon footprint. It will spend the round building out AI capabilities — risk modeling, forecasting, automated reporting — and expanding local compute to keep client data in-Kingdom.

We said this would happen: A senior venture investor told us before the show kicked off that the VC money that pulled back when the war began in March has since recalibrated and was waiting for events like Leap — where investors, founders, and traction converge — to give the backlog of deals a platform and help sentiment rebound alongside it. Keep an eye out for more funding rounds during and after the show.

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M&A WATCH

Alwaleed’s Kingdom Holding completes Al Hilal purchase as PIF starts bringing in club co-owners

Kingdom Holding finalized its SAR 840 mn acquisition of a 70% stake in Al Hilal from the Public Investment Fund (PIF), the company said in a Tadawul filing. The transaction, first signed in April, closed yesterday after clearing regulatory approvals. The price values the club’s equity at SAR 1.2 bn and its enterprise value at SAR 1.4 bn, with PIF retaining the remaining 30%.

Kingdom Holding ended up paying much less than early negotiations implied: When talks first surfaced in September 2025, Chairman Prince Alwaleed bin Talal was said to be seeking 75% of the club at a valuation of around SAR 2 bn. The final terms — 70% at a SAR 1.2 bn equity value — came in well below that.

Al Hilal is the pick of the litter. It’s the strongest of the four clubs PIF took control of in June 2023, and it reported record revenue of USD 340 mn (SAR 1.27 bn) for the 2024-2025 season, the highest ever for a Saudi sports organization, with sponsorship and partnership income up 16.5% after its Club World Cup victory over Manchester City.

The first of many planned PIF club exits: PIF is moving to sell its Saudi football holdings as it reins in spending across its portfolio, with Al Hilal being the furthest along. The fund took majority stakes in the Saudi Pro League’s Big Four: Al Hilal, Al Nassr, Al Ittihad, and Al Ahli, in 2023, then began courting buyers this year as it pulled back from the wage-heavy spending that lured stars like Cristiano Ronaldo in 2023. Talks over an Al Ittihad buyout were reported to be in early stages late last year, with Al Nassr and Al Ahli expected to follow, though nothing is imminent.

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M&A WATCH

Tasnee exits plastics conversion, redirecting capital to a battered balance sheet

Tasnee closed its full exit from plastic conversion, completing the sale of Al Rowad Industrial Transformation Company to Tahweel Holding for SAR 684 mn, according to a Tadawul disclosure. The transaction closed on Monday after all conditions, including General Authority for Competition clearance, were met.

The final figure came in below both the SAR 700 mn enterprise value announced in March, after a closing banknote adjustment, and Al Rowad’s SAR 714 mn book value. The discount to book suggests Tasnee was willing to leave some value on the table to get the asset off its books and put the capital to work elsewhere.

What Tahweel is buying: Al Rowad houses a group of specialized plastic conversion firms, including Al Rowad Global Packaging, Taldeen Plastic Solutions, and Al Rowad International Industrial Films — producing packaging films, polyethylene pipes, agricultural plastics, and geomembrane liners, alongside a nationwide retail distribution network.

The logic for Tasnee is a return to basics. The sale lets Tasnee refocus on its core role as a Tier-1 upstream petrochemical producer and put the proceeds toward debt reduction on a balance sheet that has taken heavy hits. The company posted a SAR 889 mn net loss in 1H, reversing SAR 830 mn in net income a year earlier, while revenue fell nearly 30% y-o-y to SAR 875 mn, extending a similar pattern from 2025. Against that, the exit prioritizes liquidity and a simpler structure over the vertical integration Tasnee once pursued.

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MOVES

Roshn Group brings on Naaman Atallah as CEO

PIF-owned real estate developer Roshn Group has tapped Naaman Atallah (LinkedIn) as CEO, its first full-time chief executive in more than two years, according to its website. Atallah brings around 20 years of experience in executive roles, most recently serving as president of the UAE’s Al-Futtaim, after serving in chief positions at Nakheel, Primal Realty, and Dubai Properties.

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ALSO ON OUR RADAR

Amak finds 11.3 mn-ton resource at Jabal Qaran, Luberef signs 10-year Aramco supply pact, Saudia adds Riyadh-Muscat flights

Amak’s Jabal Qaran reports 11.3 mn tons of mineral resources

Al Masane Al Kobra Mining Company (Amak) secured its first independent, JORC-compliant resource for the Jabal Qaran polymetallic project in Najran — 11.3 mn tons holding 34k tons of copper, 118k tons of zinc, 281k oz of gold, and 3.7 mn oz of silver, the company said in a Tadawul disclosure (pdf). Another 2.7 mn tons sit outside the current resource estimate as potential upside that Amak plans to drill into. The estimate was prepared by Perth-based Cube Consulting.

Why it matters: The figure edges out the c. 11 mn tons Amak put out as a preliminary estimate last November, but this is the first independent estimate, giving investors a JORC-compliant resource they can use to assess the asset. Jabal Qaran spans 57.7 sq km and sits around 60 km south-southwest of Amak’s Al Masane and Qiyam mining complex.

What’s next: Jabal Qaran is at the pre-feasibility stage, with metallurgical testwork by SLR Consulting still underway to firm up recoveries.

Luberef locks in feedstock

Saudi Aramco Base Oil Company (Luberef) signed a 10-year feedstock and supply agreement with Aramco for its Jeddah facility, locking in the raw material it needs to keep producing Group I base oils in the Kingdom’s western region, the firm said in a Tadawul disclosure. The agreement secures up to 24.5k bbl / d of feedstock, with Luberef selling 16.5k bbl / d of returned streams to Aramco. Aramco is Luberef’s majority shareholder.

New Saudia routes to Oman

National air carrier Saudia is adding three weekly direct flights between Muscat and Riyadh starting 27 October after the Omani Civil Aviation Authority approved the route, according to a post on X.

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PLANET FINANCE

GCC equity markets rebound even as outlook appears murky

GCC equity markets posted their strongest monthly performance in seven months in August, with the MSCI GCC index up 3.9% — breaking a three-month losing streak as regional geopolitical tensions eased, according to Kamco Invest’s monthly report (pdf). The rally tracked a broader global rebound: the MSCI World Index gained 2.6% on a healthy earnings season.

Saudi Arabia led regional gains with a 5.1% rise — its best month since January — followed by Oman (+4.5%) and Kuwait (+1.6%). Abu Dhabi added 0.9% and Dubai 0.7%, while Qatar (-1.1%) and Bahrain (-1.0%) were the only markets to close the month lower.

The rally was broad-based across sectors, led by hotels and leisure (+10%), materials (+8.2%), and ins. (+7.5%). Telecom rose 5.0% and banking 4.7% — the region’s most heavily weighted sectors. One outlier: energy stocks, despite elevated and volatile oil prices tied to the closure of the Strait of Hormuz, gained just 1.2% — the weakest of any sector.

YTD, the picture is more mixed — and it’s Oman, not Saudi Arabia, that leads the region. The MSX 30 is up 29.6% YTD, by far the GCC’s best performer, built on outsized gains of 7.9% in January and 16.8% in February. Saudi Arabia (+6.1%) and Abu Dhabi (+0.1%) are the only other markets in positive territory for the year, while Qatar (-8.9%), Bahrain (-6.3%), and Dubai (-3.5%) remain the laggards.

The outlook has since grown murkier. Kamco’s report notes that global bond yields already hit their highest level since 2008 by the end of August as Fed comments raised the odds of a September rate hike. That selloff has deepened further: Japan’s benchmark yield hit 3% for the first time since 1996, and Australia’s 10-year touched its highest since 2011, after renewed US-Israeli strikes on Iran pushed Brent crude above USD 91/bbl. JPMorgan’s Tai Hui says the risk for the region runs through energy prices directly — a prolonged regional stalemate, paired with depleted inventories and rising winter fuel demand, points to further upside pressure on global headline inflation.

MARKETS THIS MORNING-

Asian markets tumbled at the open today, as Japan’s Nikkei and South Korea’s Kospi each dropped roughly 2.4%. The slide mirrors Wall Street’s overnight decline, driven by escalating regional conflict and a worsening government bond crisis.

TASI

11,101

-0.2% (YTD: +5.8%)

MSCI Tadawul 30

1,493

-0.4% (YTD: +7.6%)

NomuC

21,846

+0.5% (YTD: -6.2%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

4.25% repo

3.75% reverse repo

EGX30

55,431

+1.0% (YTD: +32.5%)

ADX

9,974

-0.3% (YTD: -0.2%)

DFM

5,834

-0.0% (YTD: -3.5%)

S&P 500

7,631

-0.7% (YTD: +11.5%)

FTSE 100

10,789

-0.3% (YTD: +8.6%)

Euro Stoxx 50

6,369

-0.8% (YTD: +9.9%)

Brent crude

USD 94.65

+4.6%

Natural gas (Nymex)

USD 2.95

+1.6%

Gold

USD 4,375

-0.5%

BTC

USD 77,268

-2.1% (YTD: -11.8%)

Sukuk/bond market index

904.13

-0.3% (YTD: -1.6%)

S&P MENA Bond & Sukuk

150.97

-0.2% (YTD: -0.6%)

VIX (Fear gauge)

16.34

+9.5% (YTD: +9.3%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.2% yesterday on turnover of SAR 5.2 bn. The index is up 5.8% YTD.

In the green: Al Moammar Information Systems (+7.2%), Saudi Azm for Communication and Information Technology (+6.2%), and Arabian Internet and Communications Services (+5.9%).

In the red: Saudi Fisheries (-5.6%), Naseej International Trading (-4.1%), and Sustained Infrastructure Holding (-3.1%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.5% yesterday on turnover of SAR 18.6 mn. The index is down 6.2% YTD.

In the green: Alfakhera for Mens Tailoring (+11.8%), United Mining Industries (+10.0%), and Abdulaziz and Mansour Ibrahim Albabtin (+10.0%).

In the red: Mufeed (-13.7%), Ratio Speciality Company for Trading (-13.3%), and Naf Company for Feed for Industry (-11.4%).


AUGUST

30 August-1 September (Sunday-Tuesday): Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition 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.

9 September (Wednesday): CyberHero x Riyadh, Riyadh.

14-17 September (Monday-Thursday) The fourth Unesco Global Forum on the Ethics of AI (GFEAI), The Ritz-Carlton, 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

25-26 October (Sunday-Monday): The Global Proptech Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

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

26-29 October (Monday-Thursday): The Future Investment Initiative, King Abdulaziz International Conference Center, Riyadh.

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.

30 October-1 November (Friday-Sunday): The New Global Sport Conference, Sofitel Hotel & Convention Centre, 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.

29 November-1 December (Sunday-Tuesday): The UN Trade and Development Global Supply Chain Forum, Riyadh.

29 November-1 December (Sunday-Tuesday): The Global Logistics Forum, King Abdulaziz International Convention Centre, Riyadh.

Signposted to happen sometime in 2026:

2027

FEBRUARY

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

MARCH

21-25 March (Sunday-Thursday):The World Water Forum, Riyadh.

22–24 March (Monday-Wednesday): Capital Markets Forum, Four Seasons Hotel, Riyadh

APRIL

26-29 April (Monday-Thursday): World Energy Congress, Riyadh.

JUNE

1-3 June (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

Signposted to happen sometime in 2027:

  • The Ocean Race finishes in Amaala on the Red Sea;
  • Riyadh-Kudmi transmission line to be completed;
  • Aero Middle East and Sand & Fun takes place in Thumamah Airport, Riyadh.

Signposted to happen sometime in 2Q 2027:

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