JEDDAH: Saudi telecom giant stc has signed a contract worth SR32.64 billion ($8.71 billion) with an undisclosed government entity to build, operate, and provide telecommunications infrastructure services. 

The agreement, revealed in a filing with the Saudi Stock Exchange, spans 18 months for preparation and execution, followed by 15 years of operational management. 

The deal comes amid the continued expansion of Saudi Arabia’s growing telecom and information and communication technology infrastructure sector, which was valued at $3.5 billion in 2023. 

According to market research store Research and Markets, the sector is projected to grow at a compound annual growth rate of 7.1 percent through 2029, driven by initiatives under the Kingdom’s Vision 2030, aimed at economic diversification and technological innovation. 

“The financial impact will be positive, and the revenue will be recognized in stc’s consolidated financial statements after the initial operation of the project, which is expected to be in the fourth quarter of 2026 until the end of the contract period,” the company said. 

Following the announcement, stc’s shares opened at SR43.20, up 2.01 percent from the previous close of SR42.35. 

The stc Group, ranked among the top 10 most valuable telecom brands worldwide in the 2024 Brand Finance Report, has maintained its position as the most valuable telecom brand in the Middle East for five consecutive years. 

This comes as stc seeks to enhance Saudi Arabia’s telecom capabilities, aligning with the country’s broader goals of digital transformation and economic diversification. 

Last month, stc completed the transfer of ownership of Golden Lattice Investment Co. to a newly established entity as part of the sale of a 51 percent stake in Telecommunications Towers Co. to the Public Investment Fund. 

This follows another deal struck in November, when stc received foreign investment authorization from the Spanish Council of Ministers, allowing it to raise its voting rights in Telefonica from 4.97 percent to 9.97 percent. 

This strong growth in Saudi Arabia’s ICT sector is driven by several factors, including the country’s rapidly expanding digital landscape and rising demand for advanced telecommunications and ICT solutions, according to the Research and Markets report. 

The rollout of 5G networks, alongside efforts to develop smart cities and accelerate digital transformation across industries, is further boosting the telecom and ICT sectors. Key players in the market are actively upgrading and expanding their networks to meet the evolving needs of businesses and consumers, it added. 

RIYADH: Saudi Arabia’s Public Investment Fund has successfully priced a $4 billion bond issuance, divided into two tranches.

The offering was met with strong demand, attracting global investors and resulting in an order book of approximately $16 billion — four times the initial offering size, said a statement.

According to the statement, PIF issued $2.4 billion in five-year debt instruments and an additional $1.6 billion in securities with a maturity of nine-and-a-half years, under its Euro Medium-Term Note Program.

The sovereign wealth fund confirmed that the proceeds from the bond issuance will be used for general corporate purposes.

The development comes just weeks after PIF closed its inaugural Murabaha credit facility, securing $7 billion in funding. This marks a significant milestone in the fund’s broader strategy to raise capital over the coming years.

“Strong demand from international institutional investors underscores PIF’s diverse investor base, robust capital-raising strategy, and solid credit profile,” said Ahmed Alrobayan, head of public markets, Global Capital Finance at PIF.

He added: “These factors ensure uninterrupted access to global capital markets and are vital to PIF’s role in supporting Saudi Arabia’s economic transformation.”

PIF further emphasized that the oversubscription highlights the effectiveness of its capital-raising approach and reinforces its strong financial position.

In November, credit rating agency Moody’s upgraded PIF’s rating from A1 to Aa3 with a stable outlook, a move that further underscores the fund’s financial strength.

The US-based agency gives Aa3 for entities with high quality, low credit risk, and the best ability to repay short-term debts. 

According to Moody’s, the upgrade of PIF’s long-term issuer rating reflects strong credit linkage between the sovereign wealth fund and the Kingdom’s government. 

In August 2024, the wealth fund had also obtained a $15 billion revolving credit facility for general corporate purposes from a diverse global syndicate of 23 financial institutions from the US, Europe, and the Middle East as well as Asia. 

PIF, at that time, said that this credit facility is offered for an initial period of three years and is extendable for up to two additional years. 

A revolving loan is one that can be drawn, repaid and drawn again during the agreed lending period.

PIF manages $925 billion in assets, and is set to increase that to $2 trillion by 2030, a report from monitoring organization Global SWF forecast earlier in January.