Saudi Arabia's Public Investment Fund (PIF) gets boost from giga-projects

 

Saudi giga-projects propel PIF to profitability  

Saudi Arabia's Public Investment Fund (PIF) has made a significant turnaround, reporting doubled revenues of $88.3 billion (Dh324 billion) in 2023. This recovery comes despite prior funding challenges due to lower oil prices and subdued foreign direct investment.

The sovereign wealth fund, as revealed in its audited financial statement, streamlined the management of its ambitious giga-projects by consolidating five schemes to better handle escalating costs.

 

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PIF, central to Saudi Arabia's economic reform agenda, saw its revenue surge thanks to enhanced investment returns and equity revenues. This resulted in a net income of $36.8 billion (Dh135 billion), a notable improvement from a $16 billion (Dh58.7 billion) loss in 2022. The fund's assets grew by 25 percent over the year, reaching $977 billion (Dh3.5 trillion) from $778 billion (Dh2.8 trillion), with assets under management estimated at $925 billion (Dh3.3 trillion) by June.

James Swanston of Capital Economics suggested that transferring more ownership of state oil giant Aramco to PIF could help it reach its target of managing $2 trillion (Dh7.3 trillion) in assets by 2030. Although PIF is not publicly listed, it doubled its stake in Aramco to 16 percent through an 8 percent share transfer this year.

 

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The report also highlighted an increase in PIF subsidiaries from 146 to 168 in 2023, largely due to local acquisitions. This aligns with PIF's strategy to reduce external investments from 30 percent to between 20 and 25 percent.

Source: Gulf News