VISION 2030

PIF INVESTS INTO SAUDI’S ECONOMIC DIVERSIFICATION

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, is gearing up for investments required to meet the Vision 2030 goals.

The overarching Saudi Vision 2030 initiative aims to recalibrate the kingdom’s economy, reduce dependence on oil resources, and create a dynamic and diverse economy focused on technology, human capital and science.

Mohammad bin Salman Al-Saud, Crown Prince, deputy prime minister, chairman of the Council of Economic and Development Affairs, and chairman of PIF, announced in January that the wealth fund intends to invest USD 40 billion in domestic projects to boost the economy in line with the Vision 2030 initiative.

“His Royal Highness added that over the past four years, PIF made significant progress at a time of great uncertainty in the global economy,” the PIF said in a statement.

“The strategy comes as an extension to these achievements, looking to make the fund the leading catalyst for Saudi Arabia’s economic transformation and diversification. His Royal Highness additionally stated that PIF would continue to invest in businesses and sectors that would contribute to driving the future of the kingdom and the worldpioneering funding of new human futures.”

Yasir bin Othman Al-Rumayyan, the governor of the PIF, added that the fund has “become a major engine in achieving the kingdom's Vision 2030 and a catalyst for diversifying the local economy's resources away from oil.”

The PIF has been bulking up since 2018 in preparation for the 2030 initiative, increasing its asset base to SAR 1.5 trillion by the end of 2020, and doubling shareholders’ return to 8% in 2019 compared to 2018, and 3% annually compared to between 2014 and 2016. 

Over the past three years, the PIF and its various subsidiaries have injected more than SAR 170 billion into the Saudi economy and created 331,000 direct and indirect jobs.

PIF’s next five-year strategy will raise the value of its assets under management to SAR 4 trillion, including SAR 1 trillion cumulative investment in new projects locally. The fund will increase the percentage of investments in new sectors from 15% in 2020 to 21% in 2021, the governor noted.

In addition, PIF will aim to create 1.8 million jobs and contribute SAR 1.2 trillion in non-oil GDP over the next five years.

The fund will zoom in on 13 vital and high-growth sectors such as food, agriculture, aviation, defence, entertainment, tourism, sports, minerals, mining, transportation, logistics, and financial services to accelerate returns.

“The selection of these sectors was evaluated based on the local and global perspective in terms of analysing the attractiveness of the market, its size, expected growth and available opportunities, evaluating the sectors in which the kingdom has a potential for development and a competitive advantage at the regional and global level, its impact on the economy, and prioritising the sectors according to the kingdom's Vision 2030 and its realisation programmes,” the governor added.

Saudi Arabia is also racing ahead to boost its defence and military industry, which is one of its key self-sufficiency goals by 2030.

In December, the PIF launched the National Security Services Company (SAFE), aimed at growing and nurturing the private security and defence sector in the kingdom.

“The company will integrate manpower and technology, and in addition to the security services, will deliver state-of-the-art training programmes that contribute to opening many employment avenues for Saudis in the security services sector, offering attractive benefits for personal and professional growth,” the company said.

“SAFE’s establishment is part of PIF’s Investment Strategy, to contribute to Vision 2030 by launching and developing new sectors, localising cutting-edge technology and knowledge, and enabling the private sector.”

In addition, the King Salman Energy Park (SPARK) is reportedly 60% completed, comprising infrastructure, roads, utilities and real estate assets established across 14 square kilometres (sq km), in addition to a dedicated 3 sq km logistics zone and dry port.

Around USD 1.6 billion has been invested in its first phase. The mega-project will add USD 5.8 billion annually to real GDP by 2035, while creating thousands of high-skilled job opportunities when fully completed.

To boost the kingdom’s 4th Industrial Revolution credentials, the UAE-based start-up, Immensa Technology Labs said in July it was planning to open a 3D printing facility in Saudi Arabia, along with new offices in Abu Dhabi and the US. 

In November, the company acquired two leading 3D printing companies in Saudi – Shakl3D and LayLabs – to boost its presence.

"We are pleased that this partnership came to life, and we have no doubt that the 3D printing sector regionally will reach new heights,” said Eng. Omar Abuhabaya, general manager of the newly formed Immensa KSA and COO of Immensa Group. “The additive manufacturing know-how of both Shakl3D and Immensa will enable massive deployment of AM digitisation solutions in the industry, and we are certain that the Saudi market will benefit from the various uses of 3D printing across all sectors."

Work is well under way across a range of sectors, not only on the massive mega-projects, but also the equally significant innovation sector in line with the Vision 2030 goals.