Saudi Arabia wealth fund secures $17bn loan for megaproject push

من الصحافة اخترنا لكم

Financial Times

Financial Times 30/11/2022

Saudi Arabia’s sovereign wealth fund has secured a $17bn loan to help finance its push into the megaprojects that it hopes will diversify the kingdom’s economy from oil revenues. The seven-year senior unsecured loan was provided by a syndicate of 25 financial institutions in Europe, the US, the Middle East and Asia, the Public Investment Fund said on Wednesday. An earlier $11bn loan for five years that was arranged in 2018 will be paid off early, it said. The $600bn fund, chaired by the country’s day-to-day ruler Crown Prince Mohammed bin Salman, is in charge of kick-starting an ambitious reform policy that will reduce its reliance on sales of crude oil. Unlike most other wealth funds, PIF has a dual mandate to help develop the nation, as well as pursue financial returns. “The new loan forms part of PIF’s medium-term capital raising strategy and its 2022 Annual Capital Raising Plan — the plan includes several funding tools that would ensure PIF continuous and sustainable access to diverse funding sources, including public and private,” the fund said in its statement. PIF is not believed to need the capital imminently. But analysts have questioned how the fund will finance all its schemes, which include commitments to invest $40bn annually in the domestic economy until the end of 2025 and the development of Neom, a futuristic carbon-free city built in a 170km line through the Saudi desert that is expected to cost $500bn. Recommended The Big Read Saudi Arabia’s green agenda: renewables at home, oil abroad It has also been charged with leading Saudi Arabia’s efforts to develop renewable energy in the kingdom, with Riyadh aiming to have half its electricity generated by solar and wind by 2030. Ahead of its green bond debut, the PIF in September issued a prospectus revealing that it delivered a shareholder return of 25 per cent last year. The prospectus revealed that the fund’s assets under management stood at $608bn at the end of June, up from $528bn at the end of last year. Listed equities account for 44 per cent of the assets, with private equity at 21 per cent and infrastructure and real estate at 13 per cent. The fund is targeting an increase in assets under management to $1.07tn by 2025, with 24 per cent held internationally compared to 23 per cent at the end of June. Its 62 per cent stake in Lucid Motors is its largest individual shareholding in the US, and was valued at $17.4bn on June 30.

الكاتب

Financial Times