Saudi Arabia's Public Investment Fund (PIF), the kingdom's sovereign wealth fund, is launching a new venture that will invest $3 billion in developing tourism and infrastructure projects in a mountainous area of the Asir region.
The Soudah Development Company (SDC) will develop Soudah and Rijal Alma'a into a tourist destination for residents and visitors with the aim of contributing about $8bn to the kingdom's gross domestic product by 2030, according to a statement announcing the project by Mohammed bin Salman bin Abdulaziz Al Saud, crown prince and chairman of the fund.
The planned developments include 2,700 hotel rooms, 1,300 residential units and 30 commercial and entertainment attractions. SDC will build various offerings across the hospitality, residential, commercial and entertainment sectors. The venture aims to attract over 2 million visitors annually and create 8,000 direct and indirect permanent jobs by 2030.
Saudi Arabia's PIF is a seminal part of the kingdom Vision 2030 initiative, which seeks to diversify the economy, nurture local industries, create jobs and reduce the reliance on oil revenue.
Last month the fund launched a five-year strategy, with the aim of doubling its assets to $1.07 trillion and plans to invest a minimum of $40bn a year into the domestic economy until 2025 and create 1.8 million jobs. It will contribute $320bn to the kingdom's non-oil economy. The fund aims to grow assets under management to over $2tn by 2030
"Our investment in the Asir region reflects our confidence in the character of the location, which is a rich amalgamation of identity, heritage and experience," Yasir Othman Al-Rumayyan, governor of the fund, said. "SDC will provide yet another remarkable destination in the diverse and growing portfolio of Saudi Arabia’s experiences capturing the imagination of a broad range of investors and travellers."
Building up the tourism sector is a strategic imperative of the kingdom and the Vision 2030 aims to increase the sector's contribution to more than 10 per cent of GDP by 2030 from 3 per cent currently.
"SDC aims to create a roadmap to transform the region’s vast public areas into a diverse landscape that organically and respectfully integrates yearlong adventure and culture tourism, while highlighting the region’s distinct culture, geography and its verdant nature," the fund said.
"Preserving the environmental integrity of the destination will be a priority and the development will follow a rigorous regulatory framework and urban planning code."
The new Asir venture is among other key tourism projects Saudi Arabia has undertaken like the Red Sea Development. That project covers more than 28,000 square kilometres including an archipelago of more than 90 islands. The first phase is set to complete by 2023, with the entire project due to be delivered by 2030.
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The kingdom economic diversification also includes an expansion of entertainment complexes in different locations across the country to boost leisure tourism. In 2017, the PIF set up the Saudi Entertainment Ventures Company, known as Seven, to invest and build 20 entertainment destinations, 50 cinemas and two large theme parks in prime locations across the kingdom.
The fund is also investing in mega-projects including the Qiddiya entertainment city featuring a Six Flags theme-park and major new tourism resorts on the Red Sea coast.