Interview: Ibrahim Almojel
What are the key priorities of the National Industrial Development and Logistics Programme (NIDLP)?
IBRAHIM ALMOJEL: The NIDLP is one of the 13 Vision Realisation Programmes that support an ambitious economic diversification plan, aiming to transform the Kingdom into a leading industrial powerhouse and international logistics hub. The programme includes the development of export activities aimed at leveraging the Kingdom’s natural resources and its location at the crossroads of three continents. It focuses on expanding four key sectors – industry, mining, energy and logistics – targeting the private sector with new incentives to promote growth. The NIDLP aims to create jobs and boost the combined contribution of the four sectors to one-third of GDP by 2030. To achieve this goal the government defined a new approach based on utilising its competitive advantages, increasing private sector participation, underlining clear socio-economic benefits and stimulating economic loans, with SIDF as the NIDLP’s financial enabler. This system has evolved to support priority sectors – namely mining, energy, logistics and existing industries – and new promising regions.
In what ways is the Kingdom encouraging sustainable business and energy efficiency?
ALMOJEL: In line with the UN Sustainable Development Goals there have been global efforts to manage demand through the efficient use of energy and adoption of renewables, and Saudi Arabia is committed to reducing greenhouse gas emissions. The NIDLP includes a number of initiatives designed to encourage sustainable practices. SIDF introduced a financing programme for energy efficiency solutions in the manufacturing, agriculture and commercial sectors, with the option of connecting clients to third-party consultants. We also launched Mutjadeda, a programme to support the introduction of renewables in the country’s energy mix by offering financing to independent power producers and manufacturers of solar and wind technology. Mutjadeda will facilitate the establishment and growth of local distributed generation projects by offering funding to project developers and facility owners.
To what degree can government incentives encourage the adoption of Industry 4.0 technologies?
ALMOJEL: The global supply chain is changing. Cheap labour is losing to automation, and scale is losing to customisation. These events are shifting global trade dynamics and are providing opportunities for countries like Saudi Arabia, which is rich in capital and strategically placed to support logistics networks. Saudi government entities are harnessing the power of advanced technologies to drive forward the Kingdom’s ideas, but there is still room to accelerate and expand efforts. The Kingdom has the opportunity to play a leading role in a new era where automation and customisation are key.
The Industrial Digital Transformation Programme aims to employ innovative technologies and combine advisory and financing offerings to improve the digitalisation and automation of the manufacturing sector.
How are industry-focused small and medium-sized enterprises (SMEs) being supported?
ALMOJEL: The Covid-19 pandemic and the precautionary measures taken in order to prevent its spread have negatively impacted SMEs. As a result, many SMEs are suffering from a loss of revenue and disrupted cash flows. As part of a wider package of governmental support for Saudi businesses and employees, SIDF intends to offer an accelerated financial loan to support the operating expenses of local SMEs, as well producers of medical supplies. Furthermore, SIDF has restructured the instalments due in 2020 for small businesses. It will also consider restructuring the same for medium and large enterprises that are affected by the precautionary measures in order to help them deal with the current situation. The total economic impact of these initiatives is expected to reach approximately SR4bn ($1.1bn).
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