Financial

PIF invests $1.3bn in Saudi construction firms

Move set to encourage companies’ regional and international expansion and boost supply chain strength in the Kingdom

Saudi sovereign wealth fund PIF (Public Investment Fund) has announced investments worth US $1.3bn in four leading local construction companies, via subscribing to their new shares and boosting the percentages owned by minority shareholders.

PIF said it has invested in: Nesma & Partners Contracting Company, ElSeif Engineering Contracting Company, AlBawani Holding Company, and Almabani General Contractors Company.

The investment will contribute not only to the construction services sector, but improve local supply chains for current and future projects in Saudi Arabia, thereby further developing the country’s construction ecosystem, it explained.

The four companies in which PIF has invested are said to have built a successful track record in executing and managing complex large-scale projects across multiple sectors in various regions of Saudi Arabia.

In late January 2023, PIF and Samsung C&T partnered to develop construction tech and modular housing and, in early February 2023, PIF & AeroFarms signed a deal to develop vertical farms across the MENA region.

The companies’ partnerships with PIF will support the regional and international expansion of their operations and businesses. Moreover, the investments will help increase private sector local content, contribute to growing Saudi Arabia’s gross domestic product (GDP), enhance supply chains and increase the construction services sector’s overall competitiveness, the statement from PIF added.

Leveraging its global reach, PIF said it will enable the four companies to develop regional and international partnerships, which will help increase the adoption of the latest technologies and the transfer of knowledge from global EPC (engineering, procurement, and construction) companies.

On the strategic move, Yazeed A. Al-Humied, Deputy Governor and Head of Mena Investments at PIF, said, “These partnerships demonstrate PIF’s commitment to unlock the capabilities of key strategic sectors in Saudi Arabia, including the Construction & Building Components and Services sector, which has been identified as one of 13 strategic sectors locally. PIF’s investment in four national champions will support local capacity expansion across the sector and stimulate private sector participation and investment to meet current and future demand, in line with Vision 2030.”

He concluded, “The Kingdom also aims to increase the role of the private sector within the economy, and this investment will enhance the ability of private sector firms to provide key services.”

In mid February 2023, PIF said it raised US $5.5bn with a second green bond.

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