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Saudi wealth fund driving change in Kingdom

The Public Investment Fund engages in equity investments, loans and guarantees, channeling public funds into strategic projects locally and globally. File
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Updated 25 December 2023
Nirmal Narayanan
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Saudi wealth fund driving change in Kingdom

  • PIF’s diverse 2023 comes to an end with new companies and strategic alliances
Updated 25 December 2023
Nirmal Narayanan

RIYADH: When Saudi Arabia launched its ambitious roadmap for economic diversification in 2016, there was too much skepticism over its outcome, as the Kingdom had been reliant on crude oil for several decades.

Seven years later, the Vision 2030 blueprint has not only facilitated the rise of the Kingdom’s non-oil sector but also fired up the economy with sunrise industries fueled by the sovereign wealth fund.

The Public Investment Fund engages in equity investments, loans and guarantees, channeling public funds into strategic projects locally and globally. It also finances significant government and private industrial ventures, catalyzing economic change in the Kingdom.

To its credit, the PIF has established over 79 companies and created over 500,000 jobs. In 2023, it had a series of successful launches and purposeful partnerships, consolidating its position as one of the world’s largest sovereign funds with over $700 billion in assets under management.

Here’s a wrap of PIF’s high-profile launches and partnerships this year that promise to catapult the Kingdom’s economy to new heights.

Dan Co.

In December, Dan Co. entered the market to promote ecotourism and agricultural tourism in Saudi Arabia.

Established by the PIF, the company is expected to contribute SR6 billion ($1.6 billion) to the country’s non-oil gross domestic product by 2030.

The company will develop and operate high-end resorts and lodges in the Kingdom in partnership with the local community.

The PIF also revealed that the firm’s first project will be located in the Al-Ahsa region, across 1.8 million sq.m., featuring an eco-resort, an agri-resort and an adventure resort.

Tasaru Mobility Investments

In October, Tasaru Mobility Investments was launched to boost the automotive and mobility ecosystem in Saudi Arabia.

The firm founded by the PIF is expected to accelerate strategic investments and partnerships with local and global companies.

At the time of the launch, the fund revealed that Tasaru’s first investment is a joint venture with Zamil Group Real Estate Co., Abdullah Ibrahim Alkhorayef Sons Co. and Dar Al-Himmah Projects Co. Ltd. which will develop an automotive logistics hub in King Abdullah Economic City.

To propel the growth of Tasaru, PIF appointed Michael Muller as its CEO. Muller has previously held several senior management positions in companies like Porsche AG and Volkswagen Group.

Al Balad Development Co.

In October, Al Balad Development Co. set the stage to transform the historic Jeddah district into a renowned tourist destination.

The company is working toward restoring heritage buildings and improving the infrastructure in Al-Balad.

The project will oversee the creation of 9,300 homes and 1,800 hotel units across an area of 2.5 million sq. meters.

The development will also create 1.3 million sq. meters of commercial and office space.

The company aims to position Jeddah as a global economic hub, a cultural and heritage destination, and a premier tourism hot spot aligned with Saudi Vision 2030.

SRJ Sports Investment Co.

In August, SRJ Sports Investment Co. entered the gaming arena to accelerate the sports sector’s growth in the Kingdom and the Middle East and North Africa region.

The investment company focuses on acquiring and developing new sports events and intellectual property, besides availing commercial rights of big games and hosting major global championships in Saudi Arabia.

The PIF company also plans to target businesses offering unique fan engagement activities and transformative sports technology across the industry.

According to media reports, the company acquired a minority stake in the Professional Fighters League, a prestigious mixed martial arts company, to boost PFL’s regional expansion.

Saudi Facility Management Co.

In August, Saudi Facility Management Co., also known as FMTECH, dawned on the country’s institutional landscape to improve operational efficiency within the local facilities handling sector.

The PIF company offers maintenance services for the health, industrial, real estate and entertainment sectors, besides catering to aviation facilities and educational institutions.

It delivers comprehensive services, including utilities, energy and waste management. Housekeeping, security, and landscaping are the other services that the company provides.

Sawani Co.

Sawani Co. hit the dairy scene in July to grow the Saudi camel farming industry and contribute to its sustainable development.

Sawani Co. is working in partnership with the private sector to boost the production capacity of the camel dairy industry and is also trying to modernize the sector by implementing new technologies.

Last month, the PIF company signed a memorandum of understanding with Al Balad Development Co. to provide the “Noug” brand of camel milk products for all visitors to the historic Jeddah district.

Saudi Tourism Investment Co.

In July, Saudi Tourism Investment Co., also known as Asfar, unlocked the potential of the Kingdom’s leisure opportunities.

The PIF company aims to accelerate investments in tourist destinations and projects nationwide.

It is also enabling the private sector by creating investment opportunities for local suppliers, contractors, and small and medium enterprises.

The company is also focused on developing attractive destinations with hospitality, retail, and food and beverage offerings in cities across Saudi Arabia.

In November, Asfar CEO Fahad bin Mushayt told Arab News that the company’s long-term goal is to contribute to positioning the Kingdom as a leader in sustainable and innovative tourism.

“Asfar envisions Saudi Arabia as a globally recognized tourism hub, a destination that seamlessly blends tradition with modernity,” bin Mushyat told Arab News.

Lifera

In June, Pharmaceutical Investment Co., also known as Lifera, entered the Kingdom’s healthcare sector to boost the domestic pharmaceutical industry.

The company manufactures lifesaving products, including insulins, vaccines, plasma therapeutics and monoclonal antibodies. It also works toward developing cell and gene therapies and innovative small molecules.

In July, Lifera partnered with French pharmaceutical company Sanofi and Saudi manufacturer Arabio to increase the local production of vaccines in the Kingdom.

Equity investments

The PIF also made significant investments in several reputed organizations this year besides launching these companies.

In December, the sovereign wealth fund bought a significant minority stake in UK-based Rocco Forte Hotels.

It said that the agreement is in line with the fund’s plans to invest in promising sectors globally and obtain returns in the long term. 

In November, the fund also bought a 10 percent stake in Heathrow Airport from Spanish infrastructure giant Ferrovial.

Heathrow is one of the world’s largest air traffic platforms, connecting the UK with global trading partners to help stimulate economic growth.

Moreover, in November, the fund raised its stakes in luxury carmaker Aston Martin to 20.5 percent from 17.9 percent.

The fund’s bullish move through emerging opportunities is not only providing optimism to the Saudi economy but also prompting the Kingdom’s vibrant workforce to join hands in achieving national goals scripted in the Vision 2030 blueprint.

Topics: PIF SaudiVision2030

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IMF’s support for Egyptian economy to remain a priority, Georgieva says

Updated 7 sec ago
Reem Walid
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IMF’s support for Egyptian economy to remain a priority, Georgieva says

Updated 7 sec ago
Reem Walid

 

RIYADH: The International Monetary Fund’s commitment to supporting Egypt’s economic reforms will remain a priority, despite external pressures, according to managing director Kristalina Georgieva.

Speaking in an interview with Asharq on the sidelines of the AlUla Conference for Emerging Market Economies, Georgieva reaffirmed the IMF’s stance, emphasizing that political considerations fall outside its mandate.

This comes on the back of Egypt’s ongoing 46-month IMF loan program, which was initially approved in 2022 and expanded to $8 billion in 2024 amid an economic crisis marked by soaring inflation and acute foreign currency shortages. 

Georgieva acknowledged that Egypt faces economic headwinds, exacerbated by regional instability, including recent geopolitical tensions.

“Egypt has been going through some difficult times because of the events in the region. We know that just the loss of revenues from the Suez Canal are hitting the fiscal position of Egypt significantly,” she said.

She highlighted the necessity of structural reforms aimed at enhancing competitiveness and strengthening private sector participation.

“I want to express my respect for some of the key brave steps that they have taken, for example, letting the exchange rate reflect market conditions, moving forward with a privatization program, being very keen on reducing subsidies so the country can be in a stronger position,” she said.

“Of course, the more the government does what is necessary, the stronger the position of Egypt. We are looking at the progress today. And, actually, our board will soon discuss the second review of the program,” she added.

When asked whether the IMF would remain committed to Egypt regardless of any external pressures, Georgieva was firm in her response.

“We look at the macro position of a country, and we concentrate on the economy. There are matters of politics that are not in our domain. We are not the best institution to comment on that. So I can confirm that for the fund to support the Egyptian economy in the path of reforms, this is and will remain a priority,” she said.

Discussing the next steps in the IMF’s program with Egypt, Georgieva said, “We will be presenting, as you know, we will be presenting the outcome of the review to our board of directors. There will be a discussion and a decision then taken by the board as management.”

She emphasized that the IMF has remained engaged with Egyptian authorities despite the rapidly changing global environment. “This is an environment of rapid change, not just in Egypt, everywhere in the world. So we remain very engaged so we can get to a point of board discussion. And it is a matter of schedule,” she said.

Engagement with Syria

Addressing Syria’s engagement with the IMF, Georgieva noted that the institution’s involvement had been “unfortunately interrupted” since 2009.

“Even more unfortunate is what happened to the Syrian people. For far too long, they have suffered the consequences of a civil war. And we are very much praying that there would be a new page turned for Syria," she said.

Georgieva confirmed that engagement at the staff level has resumed to address significant gaps in economic data.

“There is already indication of the key institutions like the central bank that they would be looking for support to build institutional strength of Syria so it can function well for the benefit of the economy and the benefit of people,” she said.

When asked about the timeline for potential IMF assistance to Syria, Georgieva emphasized that the speed of engagement depends on Syrian authorities.

“I was very encouraged to learn from my staff that first contacts have already taken place. And, as far as we are concerned, we stand ready to support Syria. It is a very important country for its own people, and you know very well it is also very important for the whole region. So as quickly as the conditions allow, that quickly we would move,” she said.

Organized by the IMF and Saudi Arabia, the high-level annual conference in AlUla brings together finance ministers, central bank governors, policymakers, and leaders from the public and private sectors. The two-day event serves as a platform to discuss global economic challenges and pathways for emerging markets.

During the interview, Georgieva highlighted the significance of the AlUla Conference, noting that it marks the first time emerging markets have gathered to discuss policy issues of shared interest.

“We have over 70 central bank governors, ministers of finance, and representatives of international organizations gathering here,” she added.

"The agenda is very interesting. All the topics you cover are being discussed today and tomorrow. Well, we hope it is a successful conference, and we are looking forward to the additions next year and so forth," she added.

Topics: IMF Egypt economy

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Saudi Arabia, IMF host roundtable on supporting conflict-affected Middle East economies
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Saudi Arabia, IMF host roundtable on supporting conflict-affected Middle East economies

Updated 27 min 35 sec ago
Arab News
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Saudi Arabia, IMF host roundtable on supporting conflict-affected Middle East economies

  • Focus on Syria as meeting calls for international cooperation in supporting devastated populations
  • Finance leaders highlight wider regional consequences of prolonged instability
Updated 27 min 35 sec ago
Arab News

ALULA: Saudi Arabia’s Finance Ministry and the International Monetary Fund co-hosted on Sunday a high-level roundtable aimed at addressing economic recovery in conflict-affected countries in the Middle East, with a particular focus on the Syrian Arab Republic. 

The meeting, held on the sidelines of the inaugural AlUla Conference for Emerging Market Economies, brought together regional finance ministers, the Syrian foreign minister, the managing director of operations at the World Bank Group, and representatives from international financial institutions and the Arab Coordination Group.

Following the discussion, IMF Managing Director Kristalina Georgieva and Saudi Finance Minister Mohammed Al-Jadaan issued a joint statement emphasizing the significance of international cooperation in rebuilding economies devastated by conflict, the Saudi Press Agency reported.

They stressed the urgency of addressing humanitarian needs and facilitating a durable recovery, underscoring the commitment of participating nations and institutions to pool their expertise and resources to support affected populations, SPA added.

Participants highlighted the wider regional consequences of prolonged instability, reinforcing the need for coordinated recovery efforts. Syria remained a focal point of the discussions.

As part of a collective strategy, attendees identified three priorities for supporting conflict-affected economies.

First, they agreed on the necessity of a continuous diagnostic process to assess each country’s unique challenges, humanitarian requirements, and reconstruction needs. This would include evaluating gaps in institutional frameworks, economic policies, and financial resources.

Second, they underscored the importance of enhanced capacity development, with an emphasis on scaling up IMF and World Bank initiatives to strengthen key institutions, particularly in fiscal, monetary, and banking sectors.

Lastly, they emphasized the mobilization of financial assistance from the global community, stressing the importance of securing coordinated support from international and regional development partners for reconstruction and humanitarian programs.

The IMF, World Bank, and Arab Coordination Group reaffirmed their commitment to working together within their respective mandates to facilitate economic recovery efforts in the region.

To enhance these efforts, they agreed to establish an informal coordination group that will oversee ongoing initiatives. Further discussions are scheduled to take place at the upcoming IMF/World Bank Spring Meetings, set to be held in Washington, from April 25-27.

The meeting saw participation from regional governments, international financial institutions, and high-level Syrian representatives, marking a significant step toward a collaborative and sustained approach to economic recovery in the Middle East.

Topics: Saudi Arabia IMF

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OPEC Fund in talks with Lebanon to launch key economic support initiative

Updated 16 February 2025
Nadin Hassan
Reem Walid
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OPEC Fund in talks with Lebanon to launch key economic support initiative

Updated 16 February 2025
Nadin Hassan Reem Walid

RIYADH: The OPEC Fund for International Development is currently in talks with Lebanese authorities for a significant intervention, the institution’s president announced.

In an interview with Arab News on the opening day of the AlUla Conference for Emerging Market Economies, Abdulhamid Al-Khalifa shared that the fund is working with Lebanon to determine the optimal timing and approach to ensure the greatest impact on the country’s development.

This initiative is in line with the OPEC Fund’s ongoing commitment to global development, having already invested around $27 billion in projects across more than 125 countries. It also aligns with the fund’s mission to foster development, strengthen communities, and empower individuals.

“As you know, OPEC Fund is, as I said, a development institution and those institutions are created to take additional risks when it comes to development and they are what they call it counter-cyclical, when a country faces major issues, these institutions, intervene with high risk, but their objective is maximizing development impact, not maximizing returns on their assets,” Al-Khalifa said.

The president further emphasized that such institutions are not political in nature; instead, their focus is solely on driving development.

Al-Khalifa explained that the OPEC Fund has both a public sector arm and a private sector arm.

He added that the fund was already involved in investment projects in Lebanon through both arms and windows.

However, he noted that the approach depended on the circumstances and the right timing for intervention.

He mentioned that the fund was working with the authorities in Lebanon and looked forward to carrying out the intervention in the near future.

During the interview, the president also highlighted that while the region as a whole has significant potential, it also faces major risks, including geopolitical ones.

Al-Khalifa mentioned that some countries in the region were emerging from such risks, and expressed hope that this would help the region move forward. He added that the future held great potential and significant economic prospects for the region, particularly for the countries emerging from conflicts.

He added: “But also, you have countries that are stable and they are also doing well when it comes to economic development like GCC countries and also some Middle Eastern and North African countries.”

Al-Khalifa expressed his optimism about the future of the region but said: “It depends on many circumstances and depends on many risks that has to be mitigated.”

The president also highlighted that the OPEC Fund was established 50 years ago, with Saudi Arabia being one of the most important establishing members.

Al-Khalifa stated that the fund was focusing its efforts on development in both middle-income and low-income countries. He noted that Saudi Arabia, as the fund’s major shareholder, was supporting these countries through the OPEC Fund platform, which was one of the platforms Saudi Arabia uses to promote global development.

“As you know, Saudi Arabia is one of the major donors around the world when we compare it to GDP and they are processing their assistance through their bilateral institutions, but also they are using multilateral platforms like the World Bank, OPEC Fund, Islamic Development Bank and other regional banks,” he added.

Topics: AlUla Conference for Emerging Market Economies

Pakistan sees Saudi Vision 2030 as model for its economic transformation

Updated 16 February 2025
Nadin Hassan
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Pakistan sees Saudi Vision 2030 as model for its economic transformation

Updated 16 February 2025
Nadin Hassan

RIYADH: Saudi Arabia’s influence in regional economic transformation is expanding, with Pakistan acknowledging the Kingdom’s progress under Vision 2030 as a valuable model, according to a senior official.

In an interview with Arab News during the AlUla Conference for Emerging Market Economies, Pakistan’s Finance Minister Muhammad Aurangzeb emphasized that Saudi Arabia’s leadership in economic reforms offers important lessons for Pakistan as it embarks on its own structural changes.

“Pakistan and the Kingdom of Saudi Arabia have been long-standing partners, one of the strongest partnerships that we have,” Aurangzeb said.

“As we go through our own structural reforms at this point in time, on the back of the macroeconomic stability that we have achieved, there’s a lot to learn from Vision 2030,” the minister said.

He also stated that the Kingdom is well ahead of its targets of Vision 2030, “so there’s so much to learn in Pakistan from our partners in Saudi Arabia.”

Saudi investments 

The finance minister also highlighted the growing Saudi investments in Pakistan, particularly in the business-to-business sector. He pointed to recent developments such as Saudi Aramco’s foray into the downstream petroleum industry and ongoing talks concerning government-to-government agreements.

“We’ve already had a few investments coming through from Saudi Arabia in the B2B space, and then of course, we have just seen Aramco coming into downstream, so these are all very, very good investments,” Aurangzeb said.

“There are a number of G2G transactions which are underway at this point in time to be announced later in the year.”

Aurangzeb underscored the potential for boosting exports from Pakistan to Saudi Arabia, especially in the skilled labor sector.

He noted that this aligns with the Kingdom’s expanding workforce needs as it progresses toward its Vision 2030 objectives.

The minister added: “Meanwhile, we remain grateful for the support that we have received from Saudi Arabia, especially with respect to our IMF program.”

The minister noted that the conference serves as an important multilateral platform to discuss economic resilience and cooperation among emerging economies.

Topics: AlUla Conference for Emerging Market Economies

Saudi Arabia emerging as an economic ‘powerhouse,’ says top IMF official

Updated 16 February 2025
Nadin Hassan
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Saudi Arabia emerging as an economic ‘powerhouse,’ says top IMF official

Updated 16 February 2025
Nadin Hassan

RIYADH: Saudi Arabia’s role in the international financial system is growing, solidifying its position as an emerging economic “powerhouse,” according to a senior executive. 

In an interview with Arab News on the sidelines of the AlUla Conference for Emerging Market Economies, Jihad Azour, director of the Middle East and Central Asia department at the International Monetary Fund, stated that the Kingdom took a leadership role following the G20 summit in 2020. 

“The role of Saudi in the international financial system is growing. It’s an emerging global power. Now, after the G20 in 2020, Saudi is chairing the IMFC, which is the government body of the IMF,” Azour said. 

He continued: “Also, Saudi is very active in a certain number of global initiatives, like the debt relief initiative through the common framework, as well as also a certain number of important initiatives related to the role of emerging markets” and their contribution in setting global priorities.

Azour also noted that despite enduring multiple global economic shocks over the past five years, beginning with the COVID-19 crisis, the Kingdom has sustained strong economic growth. 

This resilience is largely attributed to government policies aimed at diversifying the economy beyond its reliance on oil. Fiscal policies have played a crucial role in strengthening economic management and stability. 

“Accelerating economic transformation has been beneficial to the GCC countries, in particular to Saudi. It helped maintain a high level of growth despite the various shocks that the region and Saudi economy faced over the last five years, starting from the COVID crisis and going on with several other global shocks,” he said, 

Azour added: “The investment in structural reforms that has increased women participation in the economy, improved the quality of infrastructure accelerated the trend in digitalization, has also contributed to accelerate the level of growth. 

Furthermore, large-scale infrastructure and development projects have played a key role in building a more prosperous future for the Kingdom by fostering economic expansion and modernization, Azour further elaborated.

The conference is set to deliver key recommendations to bolster financial stability and drive sustainable growth in emerging economies. 

Experts will also delve into the role of artificial intelligence and digital transformation in accelerating economic development across these markets.  

Discussions will focus on strategies to enhance economic resilience, fostering stronger collaboration between emerging and advanced economies to pave the way for a more equitable and sustainable global future.

Topics: AlUla Conference for Emerging Market Economies

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