Saudi minister urges PIF to ease domestic spending, make way for private sector

• Minister Khalid urges PIF to make way for the private sector.
• PIF chairman said last year fund would focus on domestic projects.
• Fund's initial strategy for 2021-2025 ends December this year.
  

Saudi Arabia's investment minister on Tuesday urged the kingdom's Public Investment Fund (PIF) to ease its spending on domestic projects and make way for more investments from the private sector, as the fund prepares to draft a new strategic plan.

"It is time for us to maybe scale back on this government or PIF spend to prove and to seed some of these value chains and clusters and let the private sector start investing," Khalid al-Falih said on Tuesday as financial titans gathered in Riyadh for the country's flagship investment conference.

Crown Prince Mohammed bin Salman's Vision 2030 economic plan has led to hundreds of billions in spending on projects that are designed to transform the kingdom's economy away from its dependence on hydrocarbons.

At last year's edition of the Future Investment Initiative (FII) conference, PIF chairman Yasir Al-Rumayyan said the fund would tap more of its resources to fund plans domestically to wean the economy off oil and said the fund planned to cut its overseas investments.

But many of the plan's flagship projects have been delayed amid low oil prices and a budget deficit that has forced Saudi Arabia to prioritise and downsize.

Saudi Arabia's PIF, one of the world's largest sovereign wealth funds with more than $900 billion in assets, sits at the heart of Vision 2030. The fund's initial strategy for 2021-2025 ends this year, and it is due to announce an updated strategy.

Foreign investment into the country has grown 24% in 2024 to $31.7 billion, Rumayyan said earlier on Tuesday as he opened the event, where attendees include Colombian President Gustavo Petro, Blackrock's Larry Fink, JP Morgan's Jamie Dimon, and Citi's Jane Fraser.

Falih later added that 90% of that foreign direct investment was into Saudi Arabia's non-oil sector, without mentioning specifics.

"We just did a transaction here in the kingdom, and we had five times more demand than we could provide. It was for a pipeline in Jafurah, and the amount of money that was interested in investing here in the kingdom was at a record level," Fink said on a panel.

"To me, this is just an indication of the transformation here in the kingdom, but more importantly, in the whole region, and I do believe we're seeing more and more, as the GCC, becoming one of the major destinations for capital."

That Jafurah deal, which raised $11 billion for Saudi state oil giant Aramco upfront in exchange for payments over 20 years to the investors, is in the exact sector the kingdom is trying to reduce its reliance on.