Saudi Arabia’s Alfanar Group has announced it is establishing a subsidiary company in London, with the intention of developing clean energy projects in the UK.
The newly created Alfanar Energy UK will kickstart operations with an initial investment of £1bn ($1.3bn) in six UK waste-to-energy plants, a significant outlay for a fresh entity.
A significant venture
Alfanar’s entry into the UK’s clean energy market may provide a signpost of what the Gulf’s relationship with the UK will be like in the post-Brexit era.
The UK and Gulf oil producers have forged close trading relationships over decades, including the supply of multibillion-dollar arms orders for GCC states. Alfanar’s decision to establish a UK company will please those in London hoping for increased investment from outside Europe, at a time when the British government attempts to reach an amicable exit from the EU.
The establishment of Alfanar’s UK subsidiary came only weeks after the conglomorate signed a memorandum of understanding with Saudi investor Taqnia Energy. Under the agreement, the companies will seek to develop alternative energy projects and manufacture renewable products within the Kingdom.
Alfanar’s decision to boost its presence in the renewables sector shows the region’s businesses are seeking to benefit from the burgeoning energy transformation, and prepare for life in the post-peak-oil era. While Alfanar will be seeking to win major work in the Kingdom’s ambitious 58.7GW renewable energy programme, its decision to branch out into the UK shows that the clean energy sector offers regional investors benefits both at home and abroad.