Saudi Arabia to boost fund’s capital to enter new industries

December 15, 2016 12:24 pm


* Saudi Arabia’s seeks to diversify the economy beyond oil exports, and explore new industries

* It is expanding its main sovereign wealth fund, the Public Investment Fund, to invest in strategic projects and firms

* The additional planned allocation would be on top of the three billion riyals of capital recently injected in the fund

 

Saudi Arabia plans to boost the capital of the Saudi Industrial Development Fund (SIDF) by six billion riyals ($1.6 billion) to help finance the kingdom’s entry into new industries, Energy Minister Khalid al-Falih said.

The additional planned allocation would be on top of the three billion riyals of capital recently injected in the fund, Falih said without giving a figure for total current capital.

 

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“There is now a study to increase the capital of the fund by a large amount which will give it an opportunity to develop other industries,” the minister told reporters late on Wednesday.

“We are talking about renewable energy industries, conversion industries, automotive industries, vital industries that have never existed in the kingdom,” he said, adding that military and pharmaceutical projects would receive support.

 

(Jobs in Saudi Arabia: Growing or declining?)

 

Economic diversification

Saudi Arabia is seeking to diversify the economy beyond oil exports as low crude prices have strained state revenues. To do this, Riyadh is initially relying, to a large extent, on projects financed by big state funds.

It is expanding its main sovereign wealth fund, the Public Investment Fund, to invest in strategic projects and firms.

 

(Saudi Arabia aims to triple mining revenue by 2030: minister)

 

The SIDF was established in 1974 to finance growth of private industry by providing loans to set up new factories and upgrade existing ones. It also offers consultancy services to local industrial projects.

In its early years, the SIDF managed the government programme to finance electricity companies, helped to develop the cold storage and date-processing industries, and analysed government support for public hospitals. It is now involved in guaranteeing loans for small and medium-sized enterprises.

 

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By Reuters
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