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Gems Education and Hassana Investment company, the arm of Saudi Arabia’s General Organisation for Social Insurance have signed a partnership to invest up to $800 million over the next decade to acquire and develop schools in the kingdom.
The agreement will provide places for up to 130,000 students and create employment opportunities for 16,000 people, 40 per cent of which will be Saudi citizens, Saudi Arabia’s media office said in a statement late Wednesday.
The partnership, which includes the acquisition and upgrading of existing schools and construction of new facilities, was signed on the side lines of the Future Investment Initiative summit that ends in Riyadh on Thursday.
“Gems Education, which is among the world’s oldest and largest K-12 private education providers, is a strong supporter of Saudi Arabia’s Vision 2030,” said Gems chief executive Majed Al Mutairi.
“The Vision's focus on opening up public service sectors such as education highlights a commitment to developing human capital and allowing the private sector to enable long-term positive change for Saudi citizens.”
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Under Vision 2030, the kingdom is looking for greater involvement of the private sector in developing its education industry, which is growing at a rapid pace.
In Saudi Arabia, the total number of students is forecast to grow at an annual rate of 3.5 per cent to 11 million by 2020 from an estimated 9.2 million in 2015, according to a 2016 report from Dubai-based investment bank Alpen Capital. The education sector is thriving due to the rising school and college age population, high per capita income, and surging demand for quality education.
Saudi Arabia’s education sector is the largest in the region, accounting for three-quarters of total enrolments in 2014.
Saudi Arabia has more than 37,000 schools, 25 public universities with over 500 colleges, more than 65 private colleges, and several technical colleges, the report added.
“This partnership is driven by our view that the education market in Saudi Arabia is one of the most attractive growth markets over the long-term,” said Saad Al Fadhli, chief executive of Hassana.
“Benefiting from Hassana’s role as a long-term, financial and strategic institutional investor and Gems’ international expertise, both partners expect to create a strong, innovative and successful education platform in Saudi Arabia.”