RIYADH: Saudi Arabia’s ongoing sports privatization initiative has sparked significant interest from both local and international investors. A total of 25 companies are now actively pursuing investment opportunities in six of the 14 sports clubs proposed for privatization in the first phase.

During the Budget Forum 2025, Sports Minister Prince Abdulaziz bin Turki Al-Faisal discussed the economic potential of the privatization drive, estimating that these investments could amount to SR500 million ($133 million).

“There is also interest from foreign companies in investing and acquiring local sports clubs, which we will announce soon,” the minister said.

Prince Abdulaziz noted that the Saudi Pro League’s international profile is on the rise, with broadcasts now reaching over 160 countries. Revenues from the league have increased by 33 percent this year, reflecting growing participation and interest in the Kingdom’s sports sector.

The expansion of sports is part of Saudi Arabia’s broader Vision 2030 reforms, which seek to diversify the country’s economy. To facilitate investment in the sector, the privatization process has been streamlined with the launch of a platform that licenses academies and clubs, making it easier for individuals and businesses to invest.

“In 2018, no one was allowed to establish a club except through the hassle of regulatory processes. Now, through the platform, anyone can open their club or academy and invest easily in the sector,” he explained.

Saudi Arabia has also made notable progress in sports tourism, hosting around 80 sports events over the past four years, attracting 2.5 million visitors. Major events such as the Formula One race in Jeddah have brought substantial economic benefits. The 2023 edition, for instance, generated over 20,000 job opportunities and attracted attendees from 160 different countries.

The minister further highlighted improvements in sports sector administration, including a reduction in contract termination penalties among clubs from SR616 million to SR30 million last year. He also pointed to the shift from part-time or voluntary staffing to a full-time workforce of 5,000 employees, with a target of creating 130,000 direct and indirect jobs by 2030.

In another session at the conference, Saudi Tourism Minister Ahmed Al-Khateeb shared that tourism’s contribution to the Kingdom’s gross domestic product had increased from 3 percent in 2018 to 5 percent in 2023, with a target of 10 percent by 2030.

“In the recent G20 meeting in Brazil, they presented the tourism growth of the nations in the first seven months of this year compared to the same period in 2019. Saudi Arabia was the highest with 70 percent, followed by Turkiye with 5 percent — a huge growth gap between the first and the second,” Al-Khateeb remarked.

Domestic travel in Saudi Arabia has also seen a surge, with the average number of flights per Saudi citizen or resident rising from 1.4 in 2018 to 2.5 in 2023. This compares favorably with leading global tourism destinations such as France (3.5) and Spain (2.8).

Saudi Arabia’s focus on cultural, sports, and historical events has positioned the Kingdom to capture a share of the 1.6 billion travelers expected to grow to 3.8 billion by 2032. Al-Khateeb emphasized that Vision 2030 initiatives have been central to this growth, driving both job creation and economic diversification.

In a separate panel, Ibrahim Al-Mubarak, assistant minister of Investment, highlighted the role of monetary policies in fostering sustainability and building trust with investors.

“There is no other spot in the world that has seen the transformation witnessed in the Kingdom at such an unprecedented speed since the launch of Vision 2030,” Al-Mubarak said.

He also praised the upcoming launch of a new investment system, set to replace the current foreign investment system in early 2025. This new framework aims to offer equal support to both domestic and international investors, consolidating investor rights and freedoms into a more transparent and business-friendly environment.

Al-Mubarak further celebrated the Kingdom’s success in the regional headquarters program, which has already surpassed its Vision 2030 target of attracting 500 regional headquarters by 2030.

“We are now hosting 540 companies by 2024,” he added, emphasizing Saudi Arabia’s growing position as a regional business hub.

RIYADH: Moody’s has upgraded the ratings of six major government-related institutions in Saudi Arabia, including the Public Investment Fund, to Aa3 from A1.

The move reflects strong sovereign backing and stable credit linkages to the government. 

The agency also assigned the Aa3 rating to Saudi Aramco, Saudi Basic Industries Corp., and Saudi Electricity Co., as well as Saudi Power Procurement Co., and Saudi Telecom Co. 

Moody’s assigns an Aa3 rating to companies with high quality, low credit risk, and strong ability to repay short-term debts, providing an assessment of the creditworthiness of borrowers, including governments, corporations, and other entities that issue debt. 

“The rating action is a direct consequence of the sovereign rating action and reflects the credit linkages between the Government of Saudi Arabia and each of the six entities,” said Moody’s. 

It added: “While several of these corporates benefit to varying degrees from international assets and cash flows, they all have significant credit linkages to the Saudi Arabia sovereign and are exposed to the domestic environment including political, economic, regulatory and social factors.” 

The strong ratings received by these firms is an indication of Saudi Arabia’s robust economic stability, following Moody’s upgrade of the Kingdom’s credit rating to Aa3 with a stable outlook in November. 

In May, Fitch Ratings upgraded Saudi Arabia’s credit rating to A+ with a stable outlook. 

PIF

The upgrade of PIF’s long-term issuer rating to Aa3 from A1 aligns with the Saudi government’s rating action and reflects the strong credit linkage between the sovereign wealth fund and the Kingdom, according to Moody’s. 

The report also noted that PIF is expected to receive strong and extraordinary support from the Saudi government whenever needed. 

“PIF is closely interlinked with the Kingdom because it is one of the main vehicles of the Kingdom to execute its Vision 2030; PIF continues to receive contributions from the Kingdom via asset transfers; and given the fund’s investment focus and concentration in domestic markets,” added the US-based agency. 

According to the analysis, PIF’s rating is in line with that of the Saudi government, meaning the fund’s rating could be downgraded if the sovereign rating declines. 

In July, PIF’s consolidated financial statement revealed that the fund generated SR331 billion ($88.3 billion) in revenue in 2023 from its diverse investment portfolio, reflecting over 100 percent growth compared to 2022. 

Saudi Aramco

The report indicated that Aramco’s rating upgrade reflects the high likelihood of extraordinary support from the government if needed. 

The US-based agency also noted that the energy company has access to nearly all of Saudi Arabia’s vast hydrocarbon resources and significant petrochemical operations. 

Earlier in November, Aramco reported a net profit of SR103.37 billion for the third quarter of 2024, surpassing analyst expectations, which had projected a median net income of SR101.06 billion. 

SABIC

According to Moody’s, SABIC’s rating upgrade is due to its strong reliance on the government and the high probability of receiving government support in the event of financial distress. 

The report also highlighted the company’s strong global position in the petrochemical and fertilizer markets as another key factor behind the credit rating upgrade. 

In the third quarter of this year, SABIC reported a net profit of SR1 billion, a turnaround from the net loss of SR2.87 billion in the same period last year. 

SEC 

Describing SEC as the “dominant vertically integrated electricity utility in Saudi Arabia,” Moody’s stated that the company served over 11.23 million customers as of Sept. 30, 2024. 

“SEC’s rating reflects the significant credit linkages between SEC and its ultimate shareholder, the Government of Saudi Arabia. All of SEC’s assets are in Saudi Arabia and the company benefits from supportive government policies,” said the US-based agency. 

In the third quarter of this year, SEC reported a net profit of SR4.7 billion, a 19.8 percent increase compared to the same period last year. 

SPPC

Moody’s stated that SPPC has a clear public policy mandate that aligns its interests and objectives with those of the government. 

As the sole licensed principal buyer of electricity in Saudi Arabia, the company has significant credit linkages with the government, which played a crucial role in the latest rating action. 

Moody’s also noted that the rating reflects SPPC’s low business risk profile, its monopoly position in the Kingdom, and its ability to maintain a strong liquidity profile despite high working capital seasonality. 

stc

According to the report, the rating upgrade of stc – the leading integrated telecommunications and ICT operator in Saudi Arabia – reflects the company’s strategic importance to the government, as well as the state’s high level of control through PIF. 

Moody’s added that stc generates over 90 percent of its revenue in the Kingdom and plays a key role in supporting the government’s technological and digital ambitions, a crucial goal outlined in Vision 2030. 

Affirming stc’s dominance in the Saudi market, the company reported a net profit of SR11.23 billion in the first nine months of this year, a 2 percent increase compared to the same period in 2023.