Business

DUBAI –– Middle Eastern and North African (MENA) states will need to invest $334 billion over five years to meet rising power demand in the region, a development bank said Wednesday.

The Arab Petroleum Investments Corporation (APICORP) said in a report that more than half the amount, $198 billion, will be needed to add 147 gigawatts (GW) of generating capacity until 2020, to the existing 315GW capacity.

The rest will go for transmission and distribution networks, said APICORP, the development bank of the Organisation of Arab Petroleum Exporting Countries (OPEC).

Electricity demand in the MENA region has been growing, driven by population growth, industrialisation and low power prices, the report said.

Despite projections for lower economic growth for the region, APICORP estimates that MENA demand for electricity will grow at an average of 8 per cent per year through 2020.

It estimated that 96GW of the required additional capacity are already in the execution stage.

The energy-rich Gulf Cooperation Council (GCC) currently has 47 per cent, or 148GW, of the MENA power generation capacity.

Still the GCC — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates — will need investments worth $136 billion to add a further 69GW until 2020, the report said.

OPEC kingpin Saudi Arabia is expected to account for $71 billion of the investments.

Non-Arab Iran is estimated to need $63 billion in investments to boost its power production by 23 GW to 93 GW over the next five years, the report said.

Iraq will need to spend $40 billion to double its electricity production to 29GW.

Egypt, the most populous nation in the region, is estimated to need $43 billion investments to raise its power production to 56 GW from 35GW.

APICORP however said several challenges and constraints face power investments in MENA states.

Oil-exporting countries, especially the GCC, are reducing expenditure and shelving capital investments, including in the power sector, due to the sharp decline in oil revenues, it said.

Financing power projects is becoming more challenging after rating agencies have lowered the credit worthiness of many MENA countries, APICORP said.

Price reforms are also expected to suppress demand for electricity in many countries.

NEW YORK — Internet giant Google said Wednesday it will ban all ads from payday lenders, calling the industry "deceptive" and "harmful".

Google's decision could have as much or even more impact on curtailing the industry than any move by politicians, as many payday loans start with a desperate person searching online for ways to make ends meet or cover an emergency.

Effective July 13, Google will no longer allow ads for loans due within 60 days and will also ban ads for loans where the interest rate is 36 per cent or higher. The industry will join Google's other banned categories of ads, such as counterfeit goods, weapons, explosives, tobacco products and hate speech.

"Our hope is that fewer people will be exposed to misleading or harmful products," said David Graff, Google's director of global product policy, in a blog post that announced the policy change.

Payday lenders have long been a target of criticism by politicians and consumer advocates, who argue the industry charges extremely high interest rates to customers, who are often the poor. Payday loans are often used to cover an unexpected expense or to make ends meet before the next paycheck. But for many borrowers, short-term loans wind up being difficult to pay off, leading to a cycle of debt that can drag on for months.

A 2012 study by Pew showed the average payday borrower is in debt for five months, spending $520 in fees and interest to repeatedly borrow $375. The annual per cent rate on a payday loan is 391 per cent, according to Pew.

"There is nothing fair about triple-digit interest rates being charged on loans to working families," said Keith Corbett, executive vice president with the Centre for Responsible Lending, in a statement. Payday loan stores reap billions of dollars in interest and fees on a product designed to force borrowers into repeat loans. Google is to be praised for doing its part to limit use of these abusive loans."

In response to critics, the payday lending industry has long argued it provides a necessary financial service to people in need of emergency funds.

"These policies are discriminatory and a form of censorship," said Amy Cantu, a spokeswoman with the Community Financial Centers Association of America, the trade group representing payday lenders.

State legislatures have long looked for ways to target payday lenders, but the payday lending industry has often found ways around new regulations. When several states capped the interest rates on payday loans, the industry pivoted into loans tied to auto titles or moved their operations onto Indian reservations.

The Consumer Financial Protection Bureau is considering new regulations to further restrict the payday lending industry. The rules are expected to be released later this year.

In a way, Google's announcement will likely have more of an impact than any new regulation. The majority of Internet searches happen on Google and the company also controls the Internet's largest advertising platforms. Google generates most of its ads through keyword searches, showing ads that are related to the subjects that its users are searching for.

Under this ban, users searching for words like "loans" or "places to get money" will no longer pull up ads from payday lenders in the advertising section of the search results.

Google, and its parent company Alphabet, has had a history of corporate activism. The company's previous motto was "don't be evil" which was replaced with "do the right thing" last year.

TOKYO – Mitsubishi Motors said Wednesday that its years long cheating on fuel-economy tests did not affect cars sold overseas, potentially limiting the scope of a scandal that has plunged the automaker into crisis.

The company also said it was probing nine more models sold only in Japan, but ruled out a bailout from its top shareholders.

Vehicles sold overseas "were tested using methods appropriate to those markets", Mitsubishi Chairman Osamu Masuko told reporters.

"We believe the vehicles sold overseas are not affected."

The company was still investigating why cars sold in Japan were caught up in the scandal, he added. 

However, it said "overly optimistic" fuel-economy targets could be to blame for some employees fudging the tests.

In some cases, cars appeared to be about 15 per cent more fuel-efficient than they were in reality.

Mitsubishi is reeling after it admitted last month to the improper testing, and that unnamed staff manipulated data.

Despite fears about Mitsubishi's future, executives ruled out a bailout.

"As far as assistance is concerned, there have not been any concrete talks," Masuko said Wednesday, as the firm submitted a report on its internal investigation to the transport ministry.

"Our company's finances are relatively healthy. At this point, we think we can do this on our own."

Mitsubishi was pulled from the brink of bankruptcy a decade ago after it was discovered that it covered up vehicle defects that caused fatal accidents.

The vast Mitsubishi group of companies stepped in with a series of bailouts, saving the embattled firm.

But it is not clear if they would be so willing to help this time around as the automaker faces possibly huge fines, lawsuits and customer compensation costs.

Earlier Wednesday, Japan's Asahi newspaper said the under-fire company had cheated on tests for almost every model it sold in its home market over the past 25 years.

Citing unnamed company sources, the report said dozens of models sold in Japan have been affected since 1991, including sedans and sports utility vehicles (SUVs) such as the popular Pajero model.

So far, Mitsubishi has confirmed that four models and over 600,000 vehicles — all sold in Japan — were involved in the cheating scandal, but warned the number of cars affected would likely rise.

On Wednesday, it said it was probing nine more existing models for misstating their fuel efficiency, as well as those no longer in production.

Mitsubishi sold about 1 million vehicles globally last year.

The company has said it could not make financial forecasts for the current fiscal year in light of the potential damage from the scandal, including the possibility of big fines, lawsuits and compensation costs.

Mitsubishi's Tokyo-listed shares rose 2.27 per cent to 495 yen on Wednesday, but investors have lopped more than 40 per cent off the stock's value in the wake of the scandal.

DHAHRAN, Saudi Arabia — Saudi Arabia's state-owned oil giant is finalising options for its partial privatisation and will present them to its Supreme Council soon, its chief executive said about the centrepiece of the kingdom's efforts to overhaul its economy.

The company has a huge team working on the proposals for the initial public offering (IPO) of less than 5 per cent of the company's value, which include a single domestic listing and a dual listing with a foreign market, CEO Amin Nasser said on Tuesday.

They will be presented "soon" to Aramco's Supreme Council, headed by Deputy Crown Prince Mohammed Bin Salman, who is leading an economic reform drive to address falling oil revenue and sharp fiscal deficits by boosting the private sector, ending government waste and diversifying the economy.

Nasser also said Aramco was seeking to expand globally via joint ventures in Asia and North America.

"We are looking at the current market status that, even though challenging, is an excellent opportunity for growth," Nasser said, adding that he was looking at opportunities in the United States, India, Indonesia, Vietnam and China.

The CEO was speaking to reporters during a rare media visit to the company's extensive, well-guarded Dhahran headquarters, located near where American oilmen first struck the Arabian Peninsula's enormous crude reserves at Well Number 7 in 1938.

Besides proposing to sell a stake in the company, which would require it to release sensitive reserves data, Riyadh has asked Aramco to play a big role in developing industrial projects aimed at stimulating non-oil economic sectors.

Last month, Prince Mohammed said he expected the IPO would value Aramco at at least $2 trillion, but that he thought the figure might end up being higher. Any valuation would account for both oil price expectations and the size of Saudi Arabia's proven oil reserves.

Company officials said Saudi Arabia had discovered a total of 805.6 billion barrels of oil, of which 141.5 billion had already been produced and 260 billion barrels were considered "proven", the industry term for reserves that can definitely be extracted.

Aramco also had 403 billion barrels of reserves it could probably extract, they said, adding that it hoped to add another 100 billion barrels to total reserves by 2025 by increasing the recovery rate by 50-70 per cent using new technology.

Growing demand

Aramco expects global crude oil demand to grow by 1.2 million barrels per day this year, he said, and has seen increasing demand in the United States and India.

"We will meet the call on Saudi Aramco," Nasser said, adding that the company will increase capacity in future if needed, but that for the time being its maximum sustainable capacity would stay at 12 million bpd, with total capacity of 12.5 million bpd.

Saudi Arabia produced an average of 10.2 million bpd of crude in 2015, he said, adding there had been a big drop in oil output among non-conventional and even other conventional producers.

The expansion of the Khurais oilfield will come on stream in 2018, he said, adding that the latest stage of its expansion project at the southeastern Shaybah oil field would be finished "in a couple of weeks".

The increased capacity of 250,000 bpd, taking Shaybah's total production capacity to 1 million bpd, is aimed at rebalancing Saudi Arabia's crude oil quality and at compensating for falling output at other fields as they mature.

The immense Saudi Aramco complex in Dhahran resembles a small city, with its large residential complex, its own hospital, sports stadium and parks.

Inside a sleek control room, technicians monitored huge screens that showed via digital graphics the core elements of the business, from the progress of oil tankers across the oceans to the available crude grades and refining facilities.

At Aramco's research centre nearby, officials showed reporters "the cave", a colourful virtual representation on wraparound screens of drilling operations under the Shaybah oil field.

Industrialisation 

Aramco's continued investment in downstream industry is seen as a crucial element of economic diversification plans. One example of this is its plans to sign an agreement soon with Saudi Basic Industries Corp. (Sabic), the state-run petrochemical and metals conglomerate, to jointly develop an oil-to-chemicals project, an official said in a briefing to reporters.

The project, likely to cost up to $30 billion, would chime with efforts to better integrate the kingdom's energy and industrial sectors. On Saturday, a new energy, industry and mineral resources ministry was created in place of the old oil ministry.

Another example is its huge ship repair and shipbuilding complex that it is developing at Ras Al Khair on the kingdom's east coast to be fully operational by 2021, Nasser said.

The first part of the shipbuilding complex will be ready by 2018, and it will eventually make oil rigs and tankers, Nasser said.

A presentation by the company said the complex would create 80,000 jobs and allow Saudi Arabia to reduce its imports by $12 billion, while increasing the country's gross domestic product by $17 billion.

LONDON – British budget airline easyJet  said strong demand for beach holidays was making up for a drop in travelling in the wake of recent attacks in Europe, and raised its dividend in a sign of its confidence.

Europe's No. 2 low-cost carrier is facing an increasingly competitive market as larger rival Ryanair and others add capacity and low fuel prices help all airlines to cut fares.

But the company said on Tuesday it remained confident about future growth, announcing plans to increase its dividend payout ratio by a quarter to 50 per cent of post-tax income, subject to approval at its annual shareholder meeting.

"Second half pricing guidance implies easyJet is much more confident on the peak summer quarter, citing beach routes in particular," Barclays analyst Oliver Sleath said.

For the 12 months to September 30, easyJet expects to post pretax profit in line with analyst estimates of £721 million ($1 billion), despite reporting a £24 million loss in the first-half, swinging into the red after making a £7 million profit in the period of last year.

Attacks in Paris in November and in Brussels in March hit demand for flights, prompting easyJet to cut prices to encourage bookings and weighing on the results.

Other European airlines including Ryanair, British Airways-owner IAG, Lufthansa and Air France-KLM have warned recently about the impact on tourism from the attacks.

EasyJet's first-half results also suffered from cancelled flights to the Egyptian resort of Sharm El Sheikh over security concerns and air traffic control strikes in France.

"This half has had external events that we haven't seen come close together in this way for over a decade," Chief Executive Carolyn McCall told reporters.

"April was particularity awful on yields because of Brussels and the tail-end of Paris, but there's an improving trajectory on that for May and June."

The airline was seeing strong demand for beach holidays in Spain, Portugal, Italy and Greece, McCall added.

Ryanair is due to announce results for the year ended March on May 23.

EasyJet said it would focus on keeping down costs, setting a target out to 2019 of flat unit costs at constant currency and excluding fuel.

As it grows, the airline is considering larger Airbus A321 jets for its fleet, which is currently focused on the A320. McCall said it was conducting a "rigorous review" to ensure the bigger plane would be compatible with its operations.

AMMAN — Minister of Industry, Trade and Supply Maha Ali on Tuesday invited Greek businesspeople to make investments in Jordan, which she said can be their gateway to regional and international markets. 

Jordan enjoys free trade agreements it signed with Arab countries, the US and Canada and other countries, she told a delegation of businesspeople visiting the Kingdom to participate in the Jordanian-Greek business forum, which commenced Tuesday. 

Ali briefed the delegates on investment opportunities available in the Kingdom, and discussed with them ways to enhance economic cooperation between both countries, the Jordan News Agency, Petra, reported. 

There are several investment opportunities in Jordan and Greece that can be utilised to increase economic cooperation through holding investment projects, Ali said. 

Dimitris Mardas, Greek deputy foreign minister for trade affairs and head of the delegation, expressed his country's keenness to develop economic cooperation with Jordan in various fields, particularly energy.

He also called for encouraging Jordanian and Greek businesspeople to benefit from available investment opportunities in both countries, Petra added.

In 2015, Jordanian exports to Greece stood at nearly $5 million, while exports of Greece to the Kingdom amounted to $41 million. 

At the business forum, organised by Amman Chamber of Industry (ACI) and Amman Chamber of Commerce (ACC), Mardas said that Jordan can benefit from his country's expertise in the field of renewable energy and infrastructure.

He said that reform programmes the Greek government has implemented over the past years paid off as Greece has gradually started to exit the economic crisis and started to regain investors' confidence in its economy.  

ACI Chairman Ziad Homsi said Greece can also play an important role in enabling Jordanian products reach European markets, particularly the Balkan region. 

He said that regional unrest has deprived Jordanian products from access to traditional markets in the Middle East, adding that the industrial sector is ready to remove obstacles that may hold back larger economic cooperation with Greece. 

ACC Chairman Issa Murad described trade exchange between Jordan and Greece as modest, indicating it represents less than 1 per cent of the overall trade volume with European countries. 

ATHENS –– Greek lawmakers passed unpopular pension and tax reforms on Monday that a European official said marked a major advance in negotiations towards unlocking more rescue funds from the country's creditors.

Eurozone finance ministers will hold talks on Greece's progress on economic and fiscal reforms later in the day, and assess if it has met terms of its multibillion-euro bailout.

A positive sign-off on the review will unlock more than 5 billion euros ($5.7 billion) to ease Greece's squeezed finances and cover debt repayments maturing in June and July.

Greece also hopes the sign-off will launch discussions on debt relief, and eurozone officials in Brussels said the finance ministers would discuss how to reprofile its debt to make future servicing costs manageable.

"We have an important opportunity before us for the country to break this vicious cycle, and enter a virtuous cycle," Prime Minister Alexis Tsipras earlier told parliament during a debate on the reforms, which opposition lawmakers voted against.

While markets welcomed the vote, thousands of demonstrators protested outside parliament. Police used tear gas when isolated groups hurled petrol bombs in a central 

Under the measures passed early on Monday, a combination of social security reform and additional taxation aims to ensure Greece will attain savings to meet an agreed 3.5 per cent budget surplus target before interest payments in 2018, helping it to regain bond market access and make its debt load sustainable.

Greece's 10-year bond yield hit its lowest level in four months on Monday, and European Commission Deputy President Jyrki Katainen said the package was "a major step forward".

Eurogroup finance ministers would probably not release more funds right away but further discussions on debt relief would come before a new tranche was released, he told Finnish broadcaster YLE.

'Tombstone for growth'

During the debate, opposition parties argued pension cuts and tax hikes would prove recessionary, dealing another blow to a population fatigued by years of austerity.

"The measures will be a tombstone for growth prospects," said Kyriakos Mitsotakis, leader of the conservative New Democracy Party which leads in opinion polls.

Tsipras was re-elected in September on promises to ease the pain of austerity for the poor and protect pensions after he was forced to sign up to a new bailout in July to keep the country in the eurozone.

Monday's reforms are part of a package that aims to generate savings equivalent to 3 per cent of GDP, raising income tax for high earners and lowering tax-free thresholds.

It increases a “solidarity tax” and introduces a national pension, while phasing out benefits for poor pensioners.

Greeks could face a new bout of taxes within weeks.

Athens has been in talks with lenders over increasing value-added tax, introducing additional taxes on fuel and tobacco, hotel overnight stays and Internet use, officials said.

Finance Minister Euclid Tsakalotos said the reforms would affect the rich and not the poor. Greece had done what was expected of it and deserved debt relief, he said.

"Our word is a contract. We have done what we promised and hence the IMF and Germany must provide a solution that is feasible, a solution for the debt that will open a clear horizon for investors," Tsakalotos told lawmakers.

In Berlin, German government spokesman Steffen Seibert said the finance ministers needed to review the economic reforms before any additional debt relief could be decided on.

TAIPEI –– Taiwanese smartphone maker HTC said Monday its first-quarter revenue plunged by more than half, but that losses in its struggling business should end later this year as it banks on a new flagship product.

Revenue from January to March was down 64 per cent year-on-year to Tw$14.8 billion ($456 million), while net loss in the period was Tw$2.6 billion, the company said in a statement. 

The loss — compared with profit of Tw$360 million a year earlier — marked the fourth consecutive quarter of declines for HTC, once the star of the intensely competitive smartphone sector. 

Results were much worse than expected, according to Yuanta Securities, despite booking gains from selling some properties in the quarter. 

But Chief Financial Officer Chialin Chang was hopeful the recent launch of the HTC 10 in April would boost fortunes.  

"We are actually quite hopeful that the HTC 10 will bring back the momentum," he said. 

"From the internal management perspective, we are hoping the third quarter in the smartphone business we will be able to achieve a breakeven," Chang added. 

The homegrown Taiwanese brand has struggled to maintain its edge as Samsung, Apple and strong Chinese brands like Huawei expand their market share. 

But the company touts its new HTC 10 to have the best smartphone camera on the market. It carries a new feature that gives users more options to personalise home screens than many Android phones. 

HTC has also been cost-cutting to turn the ailing business around, slashing headcount and streamlining its product offerings to focus on high-end phones.

But analysts are still sceptical, with some observers saying the focus on cost-cutting may deter innovation. 

First-quarter results did not yet reflect the launch of its new virtual reality product HTC Vive, which also went on sale in April. 

HTC has been pouring resources into virtual reality, as have its rivals including Samsung and LG. 

The company is one of the early players to venture into virtual reality and has spearheaded an informal alliance to develop the sector — including Warner Brothers, Alibaba and Valve. 

Chang declined to comment on reports that HTC is looking to spin off its virtual reality business, only emphasising that it is a "very high potential market". 

"We're going to put in resources to make sure we have long-term success in this sector," he said. 

Research firm CCS Insight predicts the number of virtual reality devices sold will grow from 2.2 million last year to 20 million in 2018, with smartphone-based devices representing the vast majority.

LONDON –– The number of company bosses in Britain who want the country to stay in the European Union has risen slightly, but just over half think Britain would eventually prosper on its own, according to a survey published on Monday.

The Institute of Directors lobby group said 63 per cent of executives who took part in its survey wanted to stay in the EU, up from 60 per cent in a previous poll in February.

Twenty-nine per cent wanted Britain to leave the bloc, down from 31 per cent, while 8 per cent answered "don't know".

IoD director general Simon Walker said the importance of the EU's single market and the ability to hire skilled workers from across the bloc were making business leaders increasingly supportive of staying in the EU.

"However, more members than not think the UK could ultimately make an economic success of leaving the EU, in particular believing that it would have a positive effect on employment red tape," Walker said in a statement.

Previous polls of business leaders by various employers groups have shown strong support for remaining in the EU. But polls of the public show voters are narrowly divided ahead of the June 23 referendum.

The survey of 1,224 IoD members was conducted between April 13 and 28.