Saudi Arabia’s Public Investment Fund (PIF) is at the forefront of the Kingdom’s ambitious Vision 2030, focusing on transforming the economy and ensuring a sustainable future. As of the end of 2023, PIF has successfully doubled its investment portfolio value, reaching 943 billion Saudi Riyals (USD 251 billion), underscoring its pivotal role in reducing the nation’s dependency on oil.
According to PIF’s 2023 annual report, emerging sectors accounted for more than a third of the fund’s assets under management, amounting to 2.87 trillion Saudi Riyals (USD 764 billion). This marks a substantial increase from the previous year’s 21%, indicating a strategic pivot towards long-term investments in vital sectors.
PIF’s investment strategy targets crucial sectors such as aviation, defense, automotive, entertainment, tourism, and sports. Noteworthy investments include:
* Aviation: The launch of Riyadh Air, with its distinctive purple livery, aims to differentiate it from competitors like Emirates, Qatar Airways, and Turkish Airlines. AviLease, a PIF-owned aircraft leasing company, expanded its portfolio by purchasing 13 aircraft from Avalon for USD 724 million.
* Automotive: PIF has signed a deal with Hyundai Motors to establish a car manufacturing plant with an annual production capacity of up to 50,000 vehicles.
* Entertainment: PIF’s subsidiary, Savvy Games, acquired video game company Scopely for USD 4.84 billion.
PIF has set clear objectives to be achieved by the end of 2025. These include increasing assets under management to approximately 4 trillion Riyals, with new sectors making up 21% of the total assets. Additionally, PIF aims to generate at least 150 billion Riyals in new local investments annually.
Several significant projects have been initiated to bolster the non-oil economy:
* Aradara: Specializing in tourism and urban development, this company is transforming the ‘Ardara’ project in the Asir region into a tourist hub, projected to contribute USD 19.4 billion to the non-oil GDP by 2030.
* Livera: Focused on the pharmaceutical industry, Livera aims to manufacture insulin, vaccines, and other essential products.
* Riyadh Aviation: This initiative is expected to add approximately USD 20 billion to non-oil GDP growth and create over 200,000 direct and indirect jobs.
Economists and officials highlight PIF’s role as a cornerstone in achieving Vision 2030. By diversifying its portfolio and focusing on emerging sectors, PIF is paving the way for sustainable economic growth. The fund’s strategic investments are designed to reduce Saudi Arabia’s reliance on oil, foster technological advancements, and boost job creation.
As Saudi Arabia enhances transparency to attract foreign investments, the successful implementation of PIF’s strategic plans is anticipated to yield significant economic benefits. These include increased foreign direct investment, robust economic growth, and improved quality of life for citizens.
Aligning its initiatives with Vision 2030, PIF is leading Saudi Arabia towards a diversified and sustainable economy. Through targeted investments and strategic sector development, PIF is reducing the Kingdom’s oil dependency and setting the stage for long-term economic prosperity.
