Deep-rooted partnership and future aspirations
Saudi-German relations are witnessing a new phase of strategic growth, transcending traditional cooperation to forge a deep partnership that reflects the Kingdom of Saudi Arabia's pivotal role on the international stage and Germany's need, as Europe's largest economy, to diversify its partnerships in the energy and technology sectors. High-level reciprocal visits underscore this trend, most notably German Chancellor Olaf Scholz's visit to the Kingdom in September 2022 and his meeting with His Royal Highness Crown Prince Mohammed bin Salman, which marked a turning point in bilateral relations.
Historical background: From diplomacy to economic cooperation
Diplomatic relations between the Kingdom of Saudi Arabia and Germany span decades, founded on principles of mutual respect and shared interests. Historically, Germany has been a key industrial and technological partner for the Kingdom, while Saudi Arabia has been a reliable source of energy for Germany. With the launch of Saudi Vision 2030, this relationship has evolved from a purely commercial one to a comprehensive strategic partnership. German companies have found promising investment opportunities in Saudi Arabia's economic transformation projects, while the Kingdom views German expertise as an ideal partner for achieving its goals of economic diversification and sustainable development.
Vision 2030: The primary driver for deepening partnerships
Vision 2030 is the cornerstone of the renewed Saudi-German relationship. The two countries seek to enhance cooperation in vital sectors that support the Vision's objectives, such as renewable energy, petrochemicals, mining, healthcare, digital transformation, and artificial intelligence. Saudi Arabia's mega-projects, such as NEOM, the Red Sea Project, and Qiddiya, provide ideal platforms for German companies to showcase their advanced technologies and contribute to building a modern and sustainable infrastructure. The Saudi-German Joint Committee serves as an institutional framework to coordinate these efforts and encourage public-private partnerships in both countries.
Clean energy and green hydrogen: the future of cooperation
The clean energy sector stands out as a key area for future cooperation. As Germany strives to ensure energy security and diversify its energy sources away from traditional fossil fuels, the Kingdom of Saudi Arabia emerges as a strategic partner in the production and export of green hydrogen. The memorandum of understanding to establish the “Saudi-German Green Hydrogen Bridge” between ACWA Power and the German company Uniper is a tangible example of this trend, aiming to export significant quantities of green hydrogen to Europe. This will strengthen the Kingdom’s position as a major player in the new global energy market and support Germany’s green transition goals.
Geopolitical importance and international influence
The importance of this partnership extends beyond economic aspects to encompass political and strategic dimensions. Coordination between Riyadh and Berlin, as active members of the G20, is essential for addressing global challenges. Furthermore, the timing of these visits, coinciding with political and security developments in the Middle East, underscores the importance of consultations between the two countries' leaderships to bolster regional security and stability. Both countries share a common vision regarding the necessity of finding a just solution to the Palestinian issue based on the two-state solution, guaranteeing the Palestinian people's right to establish their independent state and achieve lasting peace in the region.
Growth in trade and quality investments
Trade figures reflect the strength of the economic relationship, reaching approximately $9.4 billion in the first three quarters of 2023. This extends beyond trade to include strategic investments, with the Saudi Public Investment Fund (PIF) making strategic investments in promising German companies, such as the acquisition of the self-driving electric vehicle company Hulon. Conversely, the Kingdom is working to attract German investment in advanced transportation sectors, such as the Saudi Group's purchase of 100 electric aircraft from the German company Lilium, which aligns with the objectives of the National Transport and Logistics Strategy.
