• Sun. Apr 2nd, 2023

    Grant agreement worth $200 million inked to supply oil derivatives for Yemen


    Sep 30, 2022

    Saudi Gazette Report

    RIYADHThe Saudi Development and Reconstruction Program for Yemen (SDRPY), represented by its Supervisor General Ambassador Mohammad Al Jaber, and the Yemeni government, represented by Minister of Electricity and Energy Eng. Mane Yaslam Bin Yamin, signed a grant agreement of Saudi oil derivatives with a total value of $200 million to provide a total of 250,000 metric tons of oil derivatives to Yemen.

    This is part of Saudi Arabia’s continuous support to the Yemeni people in line with the directives of Custodian of the Two Holy Mosques King Salman and Crown Prince Mohammed bin Salman, the Saudi Press Agency reported.

    This came in response to a request of the Yemeni government to help it provide oil derivatives to operate power generation stations in Yemen. The signing ceremony was also attended by Yemeni Minister of Finance Salem bin Saleh bin Braik.

    SDRPY has already implemented the procedures of delivering the first consignment of Saudi oil derivatives with a value of $30 million out of the total value of $200 million to operate more than 70 power generation plants in Yemen.

    During the signing ceremony, Al-Jaber said that the new grant agreement of Saudi oil derivatives reflects the bonds of brotherhood and solid relations between Saudi Arabia and Yemen and an extension of Kingdom’s development and economic support to Yemen through SDRPY in all fields and aims to enhancing and supporting the Yemeni economy in a way that enables the Yemeni government to fulfill its other commitments.

    For his part, Eng. Mane praised the efforts of the Kingdom through SDRPY in securing the Saudi oil derivatives grant, which directly contributed to increasing the capabilities of government institutions and the stability of electric power in various government and private institutions and the industrial sector, in addition to boosting the commercial activities in all governorates. He noted that providing electricity has also contributed to improving the basic services provided to citizens, mainly security and social stability. The minister added that the Saudi oil derivatives grant had a direct impact on providing electricity in Yemen and maintaining good reserves of oil, as well as disbursing amounts of oil derivatives in an organized and stable manner, which reflected in increasing operation periods of electricity plants, reaching more than 20 hours per day in some governorates.

    The new oil derivatives grant stresses the Kingdom’s keenness to realize security, stability and development for the Yemeni people, and is an extension of previous grants totaling $4.2 billion, the latest of which was a grant of $422 million that was completed over a year and contributed to economic stability, boosting the budget of the Yemeni government, increasing the purchasing power of Yemeni citizens and improving security conditions, as well as boosting the service sector and improving citizens’ lives, increasing the rate of daily service hours for the operation of power stations and ensuring the self-operation of power plants in Yemen.

    Previous oil derivatives grants, provided by SDRPY, contributed to partially lowering government expenditure through alleviating the public expenditure on the government and securing operational budget and wages of the Public Electricity Company with an amount exceeding $21 million between May 2021 and April 2022, and doubling the production capacity to reach a target of 2,828 gigawatts per hour during the operation duration of plants.

    The grants also played a role in covering the needs of electricity plants in Yemen, where the total energy sales of electricity by Public Electricity Company by $81.7 million, marking an increase of 20 percent compared with previous years, where the cash collection went up by 41 percent compared with previous years.

    This contributed to lowering the consumption of the Central Bank of Yemen from foreign currency reserves to buy oil derivatives to generate electricity from international markets through lowering prices of selling fuel derivatives to generate electricity by 79 percent for diesel and 94 percent for fuel oil between May 2021 and April 2022.

    SDRPY, through oil derivatives grants, seeks to contribute to realizing economic stability in Yemen and taking part in the rehabilitation of the infrastructure of the electricity sector in Yemen, and retrieving basic services with direct impact on the Yemeni people.

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