• 01-10-2022

The Saudi Oil Derivatives Grant

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The Saudi Oil Derivatives Grant

The Kingdom of Saudi Arabia, under the directives of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and His Royal Highness Crown Prince Muhammad bin Salman Al Saud, provided a Saudi oil derivatives grant through the Saudi Development and Reconstruction Program for Yemen (SDRPY), at a value of $422 million, with a total amount of 1,260,850 metric tons, to operate more than 80 power stations inside Yemen for a year, to meet the needs of the people of various Yemeni governorates with the arrival of the summer season, which represents the peak of electrical consumption, and in response to the request of the Yemeni government.

This grant supports the electricity and energy sector on which all basic needs depend, and is considered an essential backbone of a decent life in all parts of the world, and because the sector faces a decline in its services in the Republic of Yemen, which is going through different and difficult circumstances, especially in the economic aspect, this makes the provision of oil derivatives a heavy burden on the state budget, and contributes to the instability of the Yemeni riyal as a result of the purchase of derivatives in hard currency.

As electricity in Yemen is subject to frequent power outages as a result of the weak infrastructure of power plants, the deterioration of their distribution networks, their inability to generate, and the repercussions of poor performance that lead to the disruption of service, vital and productive sectors and the deterioration of the standard of living, the grant will contribute to helping the Yemeni government direct part of the value of oil derivatives to address those situations.

This grant is an extension of the previous oil derivatives grants provided by the Kingdom of Saudi Arabia to the Republic of Yemen, where the total value of the previous grants amounted to $4.2 billion with regard to oil derivatives alone, to harness efforts in various tracks to support Yemen and its people, by raising the operational capacity of electricity, and improving per capita consumption of electricity, to contribute to the revival of the financial sector, and the economic and commercial activity.

This platform was launched as part of measures to enhance transparency after setting up an executive program that defines organizational procedures and an integrated governance mechanism, including digitizing grant indicators and reports, and providing access to its data for everyone.

The platform’s reports are a documentation of the work of the Monitoring, Supervision and Follow-up Committee, which was formed for the Saudi oil derivatives grant with the Yemeni government and of which the Saudi Development and Reconstruction Program for Yemen (SDRPY) is a member, to ensure that the grant reaches the beneficiaries and to assure the use of the oil derivatives for the purposes for which they have been allotted only.

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