Saudi Arabia's PIF plans $24bn Mena investments through six regional companies

Sovereign fund sets up five new companies to invest in Bahrain, Iraq, Jordan, Oman and Sudan after the launch of Egyptian investment vehicle in August

A general view shows the Bahraini capital, Manama, on February 10, 2016. - Five years after the popular uprising was harshly repressed, the Kingdom of Bahrain is locked in a political stalemate coupled with an economic crisis that underline the urgency of a compromise between the rulers and the opposition, according to experts. (Photo by MOHAMMED AL-SHAIKH / AFP) / TO GO WITH AFP STORY BY TAIEB MAHJOUB
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Saudi Arabia’s sovereign wealth fund, Public Investment Fund, plans to invest 90 billion Saudi riyals ($24bn) in the broader Middle East and North Africa region to expand its portfolio of assets and boost regional economies.

PIF is setting up five investment companies after the launch of the Saudi Egyptian Investment Company in August.

The PIF’s new investment vehicles will seek opportunities in Bahrain, Iraq, Jordan, Oman and Sudan, Crown Prince Mohammed bin Salman said on Wednesday.

Together, the six companies will invest in several key sectors including infrastructure, real estate development, mining, health care, financial services, food and agriculture, manufacturing, telecoms, technology and other strategic industries.

The announcement comes on the second day of the Future Investment Initiative (FII), the kingdom’s annual forum in Riyadh, which is attended by government leaders, policymakers, investors and finance and technology leaders from around the world.

The launch of the five new companies will “contribute to an increase in regional investment opportunities for PIF’s portfolio companies and Saudi Arabia’s private sector”, PIF said in a statement.

The move will bolster “attractive financial returns over the long term and create more avenues for strategic economic collaboration with the private sector in the target countries as well as enabling the Saudi private sector”, it said.

The potential investments by PIF align with the fund’s strategy, which includes seeking new investment opportunities in the Middle East and North Africa to build lasting strategic economic partnerships and achieve sustainable returns, grow PIF’s assets under management, and diversify Saudi Arabia’s sources of revenue, while underscoring the objectives of Vision 2030, the fund said.

PIF, which invests on behalf of the government in domestic and international markets, is at the heart of the kingdom's efforts to diversify its economy away from oil. It is mandated to pump $40bn to $50bn into the local economy to generate jobs and boost the non-oil economic base of the kingdom.

The fund, chaired by Prince Mohammed, has stakes in global companies including ride-hailing company Uber and is a cornerstone investor in SoftBank’s vision fund that invests in global technology companies. It currently has assets of $620bn and plans to boost it to $2 trillion by 2030.

PIF’s Saudi Egyptian Investment Company has already started investing capital in the Egyptian market.

In August, it acquired minority stakes worth about $1.3bn in four companies listed on the Egyptian Stock Exchange, Egypt’s planning ministry announced at the time.

The four companies are Abu Qir Fertilisers and Chemical Industries, Alexandria Container and Cargo Handling, E-Finance for Financial and Digital Investments. and Misr Fertilisers Production Company.

Earlier this month, the investment vehicle also acquired a 34 per cent stake in Egypt’s BTech, the 25-year-old consumer electronics retailer, for an undisclosed sum from Development Partners International, an Africa-focused investment company based in the UK.

Updated: October 26, 2022, 1:49 PM