France targets Saudi PIF's 'colossal' investment power

President Macron, who faces a bitter fight over budgets at home, looks to edge into market dominated by US companies

President Emmanuel Macron on Tuesday said France wants to become one of Saudi Arabia's most important business partners as the kingdom pushes forward with an overhaul of its economy, including a multibillion dollar plan to cut its dependence on oil exports.

During a three-day official state visit focused on boosting business ties, Mr Macron told a Saudi-French business forum in Riyadh that one of his objectives was to convince Saudi Arabia to invest more in France. “We want to partner with you, meaning we want to create jobs here. We want to produce with you,” Mr Macron said. “We want to be partner of your vision and the vision of the Crown Prince [Mohammed bin Salman] for 2030.”

Saudi Energy Minister Prince Abdulaziz bin Salman said France “feels like home” as he stood alongside Mr Macron at the forum, where a flurry of business deals have been announced. They include a consortium between Electricite de France (EDF) and China's SPIC Huanghe Hydropower Development to build a 1,000-megawatt solar power plant in Al Masaa and a 400-megawatt plant in Al Hinakiyah. The value of the new contracts was not shared.

In 2023, trade between France and Saudi Arabia amounted to €9.5 billion ($10 billion). Saudi Arabia is France’s leading supplier of hydrocarbons in the region. France, where the government is facing the prospect of collapse over budget cuts, is a major foreign investor in Saudi Arabia, with investments valued at €2.2 million ($2.3 million) in 2022.

Last month the Saudi Public Investment Fund (PIF) said it would reduce investments abroad from 30 per cent to about 18-20 per cent of the $930 billion fund. However, advisers to Mr Macron have said they believe the PIF's investment powers “remain colossal”. Foreign direct investment in Saudi Arabia reached $25.6 billion last year – 16 per cent above the Saudi investment ministry's target after a change in methodology that led to a significant upward revision of the figures.

AI high on the agenda

A strategic partnership between the two countries was signed between Mr Macron and Crown Prince Mohammed bin Salman on Tuesday. The leaders have scheduled a one-on-one dinner on Wednesday before Mr Macron flies to the Al Ula heritage site, which is overseen by a French-Saudi development organisation. The new partnership's aim is “multiplying co-operation and concrete achievements in all areas” including defence, culture and artificial intelligence, the French government said.

France can’t compete with the US but wants to support Saudi Arabia in its drive to diversify its economy

Gulf expert Camille Lons

Speaking to The National at the business forum, Xavier Niel, a French businessmen viewed as an AI pioneer, said he had come to support French start-ups hoping to work in Saudi Arabia. “France has the third AI ecosystem in the world. I'm interested in seeing how we can mix our know-how and assets [in Saudi Arabia],” he said.

Khaled Sharbatly, chief executive of Saudi solar energy company Desert Technologies, said that French energy and infrastructure expertise, with companies such as Total, Engie and EDF, would be useful to his country's vision of economic development. “Saudi Vision 2030 is built around building infrastructure and the French are leaders of infrastructure investment and construction,” Mr Sharbatly said.

French entrepreneur Julie Barbier, who worked in Dubai for 14 years before relocating recently to Saudi Arabia with state incentives, said France's business world wanted to be part of the “massive dynamic wave” in the kingdom. “They realise now the deep transformation of the kingdom. There's nothing that can prevent change now,” said Ms Barbier.

France has had a close relationship with Saudi Arabia for decades, but faces stiff competition from China and the US on business and investments. “France has been trying to relaunch its business relations with Saudi Arabia for several years,” Camille Lons, deputy head of the European Council on Foreign Relations’ Paris office, and a Gulf expert, told The National. “So far success has been limited because both sides expect larger investments than what has materialised.”

France is also pushing to sell about 50 Rafale fighter jets made by Dassault Aviation to Saudi Arabia. Germany has said it may soon reverse the ban on selling its Eurofighter Typhoon jets to Saudi Arabia, and Washington is negotiating a wide-ranging defence package with Riyadh. “France can’t compete with the US but wants to support Saudi Arabia in its drive to diversify its economy,” Ms Lons said.

French President Emmanuel Macron arrives in Saudi Arabia – in pictures

French President Emmanuel Macron on a tour as part of his three-day visit to Saudi Arabia, on December 3. SPA

Mr Macron is greeted at one of his stops on December 3. SPA

Mr Macron oversees the signing of Saudi-French agreements in Riyadh. SPA

Mr Macron accompanied by members of his delegation. SPA

Saudi Crown Prince Mohammed bin Salman with Mr Macron and chief executives of French companies on the sidelines of the OneWaterSummit in Riyadh on December 3. SPA

Prince Mohammed with one of the French chief executives. SPA

Prince Mohammed and Mr Macron with the French leaders of industry on the sidelines of the OneWaterSummit. SPA

Prince Mohammed speaks with Mr Macron on the second day of the French President's three-day visit, at the OneWaterSummit in Riyadh on December 3. SPA

Mr Macron and Prince Mohammed after the French President's arrival in Riyadh on December 2. SPA

Prince Mohammed and Mr Macron hold talks as their delegations watch on. SPA

Prince Mohammed and Mr Macron are discussing bolstering the Lebanese army's presence in the country's south, as part of the Israel-Hezbollah ceasefire agreement, and strengthening bonds between France and Saudi Arabia. SPA

Mr Macron meets Saudi officials, accompanied by Prince Mohammed. Saudi Royal Palace / AP

Prince Mohammed and Mr Macron inspect an honour guard during a welcoming ceremony at the Royal Palace in Riyadh. Saudi Royal Palace / AP

Mr Macron and Prince Mohammed before their meeting in Riyadh on December 2. All photos from here on: AFP

Mr Macron met Prince Mohammed in Riyadh as part of a three-day visit to the kingdom

Mr Macron and Prince Mohammed walk past an honour guard

Mr Macron and Prince Mohammed were to discuss matters including the stationing of the Lebanese Armed Forces in the country's south

Prince Mohammed welcomes French Culture Minister Rachida Dati, who is part of Mr Macron's delegation to the kingdom

Prince Mohammed greets French presidential diplomatic adviser Emmanuel Bonne in Riyadh

Mr Macron is received by Prince Mohammed on his arrival in Riyadh

Mr Macron is welcomed by Prince Mohammed after arriving in the Saudi capital on Monday for a three-day visit

French and Saudi flags fly at King Khalid International Airport in Riyadh

Prince Mohammed bin Abdulrahman, Deputy Governor of the Riyadh region, greets Mr Macron

Mr Macron shakes the hands of Saudi dignitaries after disembarking in Riyadh

The scene is set on the tarmac for Mr Macron's arrival

Regional crises in the Middle East were also high on the agenda of discussions between Mr Macron and Crown Prince Mohammed, almost one week after France and the US announced a ceasefire in Lebanon.

Their priority is “to establish a ceasefire without further delay in Gaza, in order to free all hostages, protect the civilian populations through the delivery of humanitarian aid and contribute to the search for a political solution based on the two-state solution”, the French Presidency said.

“The unstable situation in France is proving to be an issue for Macron, who is falling back on foreign policy, which has always been his strong point. Appearing active on the Lebanon ceasefire and continuing to invest in powers such as Saudi Arabia is clearly important for him,” Ms Lons added.