PIF Leads Saudi Economic Diversification Efforts With Several Deals in 2022
The Saudi Public Investment Fund (PIF) supports the diversification of the Saudi economy and aims to contribute SAR 1.2 trillion to Saudi Arabia’s non-oil GDP and create 1.8 million jobs by the end of 2025.
The fund is working towards this goal by activating growth opportunities for strategic and vital sectors, including investment in the tourism sector in Saudi Arabia in line with Vision 2030, which aims to raise the contribution of this sector to the GDP to more than 10% by 2030.
Toward achieving this goal the PIF has concluded several deals and established many companies that will spearhead the Kingdom’s economic diversification efforts.
PIF acquires up to 9.5% stake in Skyborn renewables
In December, the Public Investment Fund announced the acquisition of up to 9.5% of Skyborn Renewables (Skyborn), a leading offshore wind developer and operator, alongside Global Infrastructure Partners (GIP), the global, independent infrastructure investment fund. The investment will allow PIF to participate in the acceleration of energy transition and clean energy at an international scale through an investment in a geographically diversified offshore wind energy platform.
The Skyborn platform includes interests in operating and under-construction projects in Germany, France, and Taiwan as well as a pipeline of over 30 GW (gross) of highly diversified offshore wind projects in various stages of development. The company has over 20 years of development experience, a track record of over 7.0 GW of capacity developed to date, and a presence in over 15 European and APAC markets.
HRH Crown Prince announces King Salman International Airport masterplan
In November, His Royal Highness Crown Prince Mohammed bin Salman bin Abdulaziz, Prime Minister and Chairman of the Council of Economic and Development Affairs (CEDA), Chairman of PIF, announced the masterplan for King Salman International Airport which will boost Riyadh’s position as a global logistics hub, stimulate transport, trade and tourism, and act as a bridge linking the East with the West. The airport project is in line with Saudi Arabia’s vision to transform Riyadh to be among the top ten city economies in the world and to support the growth of Riyadh’s population to 15–20 million people by 2030.
King Salman International Airport is expected to be one of the world’s largest airports covering an area of approximately 57 km2, allowing for six parallel runways and including the existing terminals named after King Khalid. It will also include 12km2 airport support facilities, residential and recreational facilities, retail outlets, and other logistics real estate. The airport aims to accommodate up to 120 million travelers by 2030 and 185 million travelers by, with the capacity to process 3.5 million tons of cargo, by 2050.
Saudi’s PIF and BlackRock to invest in infrastructure projects
Also in November, PIF announced the signing of a non-binding MoU with BlackRock, the global investment company, to anchor BlackRock’s Middle East Infrastructure strategy and establish a framework to jointly explore infrastructure projects in the Middle East, with a majority of the investment activity focused on Saudi Arabia. In support of this initiative, BlackRock will look to build a dedicated infrastructure investment team in Riyadh to cover the Middle East region.
The target projects are across a range of sectors including energy, power, utilities, water, environment, transportation, telecommunications, and social infrastructure, leveraging positive Saudi and regional market dynamics to deliver sustainable long-term returns. PIF and BlackRock plan to work together to attract regional and international investors to participate in investment projects, boost foreign direct investment (FDI) into Saudi Arabia, and add value to the Saudi Arabian economy and the wider market while facilitating knowledge and skills transfer.
PIF launches Ceer, the first Saudi electric vehicle brand
His Royal Highness Crown Prince Mohammad bin Salman bin Abdulaziz, Prime Minister and Chairman of the Public Investment Fund announced, in November, the launch of Ceer, the first Saudi electric vehicle brand that will contribute to Saudi Arabia’s automotive manufacturing sector. The launch comes in line with PIF’s strategy to focus on unlocking the capabilities of promising sectors locally that can help drive the diversification of the economy, to help achieve the objectives of Vision 2030. In addition, the company will contribute to Saudi Arabia’s efforts towards carbon emissions reduction and driving sustainability to address the impact of climate change.
His Royal Highness Crown Prince Mohammed bin Salman said: “Saudi Arabia is not just building a new automotive brand, we are igniting a new industry and an ecosystem that attracts international and local investments, creates job opportunities for local talent, enables the private sector, and contributes to increasing Saudi Arabia’s GDP over the next decade, as part of PIF’s strategy to drive the economic growth in line with Vision 2030.”
PIF announces the establishment of the regional voluntary carbon market company
In October, the PIF established the Regional Voluntary Carbon Market Company, in which PIF holds an 80% stake and Saudi Tadawul Group Holding Company (“Saudi Tadawul Group”) holds a 20% stake in the company. The company will offer guidance and resourcing to support businesses and industries in the region as they play their part in the global transition to net zero, ensuring that carbon credit purchases go above and beyond meaningful emission reductions in value chains.
HRH Crown Prince unveils Saudi Downtown Company, which aims to develop downtowns in Saudi Arabia
Also in October, HRH Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, and Chairman of the Public Investment Fund (PIF) announced the launch of Saudi Downtown Company (SDC), which aims to build and develop downtown areas and mixed-use destinations in 12 cities throughout Saudi Arabia. The company will aim to improve the infrastructure and build strategic partnerships with the private sector and investors, by creating new business and investment opportunities in key economic sectors, including retail, tourism, entertainment, and housing.
The 12 cities include: Al-Madinah, Al-Khobar, Al-Ahsa, Buraidah, Najran, Jizan, Hail, Al-Baha, Arar, Taif, Dumat Al-Jandal, and Tabuk. SDC will develop over 10 million square meters of land across all projects, creating modern destinations drawn from Saudi Arabia’s diverse local culture and traditional architectural motifs, while using cutting-edge technology in every project.
PIF launches “AviLease”, an aircraft leasing company
In June, PIF announced the launch of the Aircraft Leasing Company “AviLease”, which aims to be a leading institution across the aviation leasing value chain, maintaining an optimal portfolio of assets with its core focus on leasing, trading, and asset management services.
“AviLease” will initially focus on scaling through purchase-and-lease-back transactions with airlines, portfolio acquisitions, and direct orders from aircraft manufacturers. It will also look into expansions through corporate acquisitions. The company’s fleet will consist of a new generation of narrow-body and wide-body aircraft from the world’s leading manufacturers.
PIF launches the Saudi Coffee Company to further enable Saudi Arabia’s food & agriculture sector
In May, the Public Investment Fund announced the launch of the Saudi Coffee Company. The company has been established to enable Saudi Arabia’s coffee bean to be a global product in the future and will play a vital role in developing sustainable coffee production in the southern Jazan region, home to the world-famous Coffea Arabica.
The launch of the Saudi Coffee Company aligns with PIF’s strategy, which focuses on developing and enabling 13 promising sectors, including food and agriculture, as part of broader efforts to diversify sources of income for the local economy.
HRH Crown Prince unveils ultra-luxury hospitality brand ‘Boutique Group’
In January, His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Deputy Prime Minister, Chairman of the Council for Economic and Development Affairs, and Chairman of the Public Investment Fund (PIF) announced the launch of ‘Boutique Group’, a new hospitality brand that will manage and convert a collection of iconic historic and cultural palaces in Saudi Arabia into ultra-luxury boutique hotels. The company will revive the vibrant heritage and culture of Saudi Arabia to create a new and unique hospitality experience.
The first phase of the project will focus on the development of three historic palaces in cooperation with the private sector, Al Hamra Palace will offer 77 keys including 33 luxury palace suites and 44 luxury villas in Jeddah. Tuwaiq Palace will provide 96 keys including 40 luxury palace suites and 56 luxury villas. Whereas Red Palace will offer 71 keys including 46 luxury suites, and 25 luxury guest rooms. Both Tuwaiq and Red Palace are located in Riyadh.
