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PIF drives Saudi Arabia’s diversification agenda with bold moves in 2024

PIF’s investments in 2024 reflect its multi-pronged approach to transforming Saudi Arabia’s economy. Shutterstock
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Updated 30 December 2024
Nirmal Narayanan
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PIF drives Saudi Arabia’s diversification agenda with bold moves in 2024

  • PIF ranks among the world’s most influential sovereign wealth funds
  • PIF’s activities in 2024 were not limited to cutting-edge technologies
Updated 30 December 2024
Nirmal Narayanan

RIYADH: Saudi Arabia’s Public Investment Fund continues to play a key role in the Kingdom’s economic transformation, leading efforts to diversify revenue streams and reduce reliance on oil. 

With assets under management reaching $925 billion, PIF ranks among the world’s most influential sovereign wealth funds, driving investments in technology, infrastructure, sustainability, and culture throughout 2024.

The non-oil sector now contributes 52 percent to Saudi Arabia’s gross domestic product, reflecting the success of Vision 2030, the Kingdom’s ambitious plan to create a sustainable and diversified economy. Central to this progress, PIF has expanded its reach both domestically and internationally, with landmark initiatives designed to reshape industries and enhance the Kingdom’s global competitiveness.

PIF’s tech ventures

In February, the fund launched Alat, a company dedicated to making Saudi Arabia a global hub for sustainable technology manufacturing. Alat’s partnership with Lenovo Group in May underscored this vision, with the two entities committing $2 billion through zero-coupon convertible bonds. 

The collaboration will establish a regional headquarters in Riyadh for the Middle East and Africa, alongside a new manufacturing hub to support Lenovo’s global operations. By June, Alat had expanded its focus with two new business units in electrification and artificial intelligence infrastructure, aimed at meeting the soaring demand for renewable energy technologies and AI-driven solutions.

The electrification initiative is geared toward strengthening grid technology, addressing the increasing energy needs driven by renewables like solar, wind, and hydrogen. Simultaneously, the AI infrastructure segment is set to position Saudi Arabia as a manufacturing powerhouse, leveraging advanced capabilities to cater to global industries.

Space industry leap

Another major milestone came in May when PIF launched Neo Space Group, a company designed to advance Saudi Arabia’s presence in the commercial satellite and space industry. 

Neo Space Group announced its focus on satellite communications, earth observation, remote sensing, and navigation technologies, along with a venture capital fund targeting space-focused startups.  

“NSG will contribute to the development and deployment of the latest cutting-edge technologies in the space industry through its four dedicated business segments: satellite communications, earth observation and remote sensing, satellite navigation and Internet of Things, as well as a satellite and space-focused venture capital fund,” said PIF.   

In December, Neo Space Group made headlines with its acquisition of UP42, a geospatial platform developed by Airbus. This acquisition is expected to significantly enhance Saudi Arabia’s geospatial capabilities, enabling applications across agriculture, infrastructure monitoring, and more, aligning with the Kingdom’s Vision 2030 goals.

Cultural heritage projects

PIF’s activities in 2024 were not limited to cutting-edge technologies. In September, it launched National Interactive Entertainment Co., known as QSAS, which is focused on creating immersive storytelling experiences rooted in Saudi heritage and Islamic culture. 

The initiative reflects Saudi Arabia’s broader efforts to balance cultural preservation with business development. QSAS plans to develop and operate interactive exhibitions across the Kingdom while fostering partnerships in construction, event management, and technology.

AI and ICT expansion

The fund also made a major push in artificial intelligence this year. In October, it signed a landmark partnership with Google Cloud to establish an advanced AI hub near Dammam. The agreement, inked during the Future Investment Initiative, is projected to create thousands of jobs and generate $71 billion in economic impact over the next eight years. 

Beyond economic benefits, the hub will offer AI training to millions of students and professionals, contributing to national goals of expanding the information and communication technology sector by 50 percent.

Infrastructure investments

Housing infrastructure also came into focus, with the October launch of Smart Accommodation for Residential Complexes Co., or SAARC. This company aims to address the rising demand for workforce housing tied to Saudi Arabia’s large-scale infrastructure projects. SAARC plans to develop residential complexes that adhere to international standards, creating modern living spaces that support the country’s rapid urbanization.

PIF expanded its global investment footprint with a memorandum of understanding signed with Brookfield Asset Management in October. The deal positions PIF as a strategic anchor investor in Brookfield Middle East Partners, a $2 billion fund targeting key sectors such as industrials, health care, and technology. The partnership underscores PIF’s strategy of leveraging international opportunities to strengthen Saudi Arabia’s economic base.

Tourism and hospitality growth

In the hospitality sector, PIF introduced Adeera in December, a new company tasked with operating and managing hotels that combine world-class standards with authentic Saudi hospitality. Adeera is expected to work closely with local developers, fostering private-sector participation and supporting the growth of homegrown brands as Saudi Arabia positions itself as a premier global tourism destination.

Sustainability and innovation took center stage with the December launch of Milaf Cola by PIF subsidiary Thurath Al-Madina. Unlike conventional soft drinks, Milaf Cola is crafted from Saudi dates, eliminating added sugars and emphasizing natural, nutrient-rich ingredients. Introduced during the Riyadh Date Festival, the drink represents PIF’s focus on creating value-added products from local resources while adhering to global food safety standards.

Strategic acquisitions

Throughout the year, PIF pursued an aggressive acquisition strategy, bolstering its portfolio with high-profile deals. 

In January, the fund increased its stake in Middle East Paper Co. to 23.08 percent, enabling the company to expand production and enhance operational efficiency. 

February saw PIF acquiring a 40 percent stake in Zamil Offshore Co., a key player in the Kingdom’s energy sector. 

October marked another milestone as PIF purchased a 40 percent stake in Central Group, a Thai conglomerate interested in retail, real estate, and hospitality. 

Rounding the year, PIF announced plans in November to acquire a 54 percent stake in MBC Group for $1.99 billion, solidifying its influence in the entertainment industry.

PIF’s investments in 2024 reflect its multi-pronged approach to transforming Saudi Arabia’s economy. The fund has played a pivotal role in advancing Vision 2030’s objectives, from technology and space exploration to cultural preservation and hospitality. With a focus on sustainability, innovation, and global partnerships, PIF is laying the foundation for a diversified, resilient economy that can compete on the world stage.

As the Kingdom prepares for the next phase of its transformation, PIF’s initiatives in 2024 serve as a testament to its commitment to redefining Saudi Arabia’s economic landscape.

Topics: Saudi Arabia Saudi Arabia’s Public Investment Fund (PIF) PIF

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Saudi Arabia leads MENA startup funding in April with $158.5m  

Updated 05 May 2025
Nour El-Shaeri
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Saudi Arabia leads MENA startup funding in April with $158.5m  

Updated 05 May 2025
Nour El-Shaeri

RIYADH: Saudi Arabia led startup funding across the Middle East and North Africa in April 2025, attracting $158.5 million across eight deals — accounting for more than two-thirds of the region’s total investment for the month. 

The Kingdom’s dominant performance was largely driven by iMENA Group’s $135 million pre-initial public offering round, placing it ahead of the UAE, which followed with $62 million raised across nine startups. 

In total, MENA startups secured $228.4 million in April through 26 deals, marking a 105 percent increase from March and nearly triple the amount raised in April 2024, according to Wamda’s monthly report.  

Notably, the month’s funding activity featured no debt financing.

“Interestingly, the absence of debt-financed deals in April highlights growing investor confidence in equity-based funding — a trend reflecting a healthier capital environment,” the report stated.  

Morocco ranked third regionally, raising $4 million across two startups, while Egypt lagged behind with just $1.5 million secured by four companies. 

Early-stage ventures led in deal volume, bringing in $49 million through 20 transactions. Late-stage activity was concentrated entirely in iMENA’s pre-IPO round. 

By sector, fintech remained the top draw for investors, attracting $44 million across seven transactions. Traveltech also gained momentum, driven by HRA Experience’s deal, while e-commerce startups raised $2.5 million across three deals. 

Software-as-a-service ventures made a comeback after a quiet first quarter, securing $1.8 million from three transactions.  

In terms of business models, business-to-business startups dominated, raising $180 million across 12 deals.  

Business-to-consumer ventures followed with $43 million from seven transactions, while six companies operating both B2B and B2C models accounted for the rest of the disclosed funding. 

Gender disparities in startup funding persisted in April. Female-led startups secured less than $500,000 in total, while male-founded ventures captured 97 percent of all disclosed capital. Startups co-founded by men and women raised an additional $6.5 million. 

Topics: Investment MENA Saudi Arabia

Closing Bell: Saudi main index closes in green at 11,422 

Updated 05 May 2025
Miguel Hadchity
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Closing Bell: Saudi main index closes in green at 11,422 

Updated 05 May 2025
Miguel Hadchity

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Monday, gaining 11.45 points, or 0.10 percent, to close at 11,422.95. 

The total trading turnover of the benchmark index was SR5.21 billion ($1.39 billion), as 153 stocks advanced, while 84 retreated. 

The Kingdom’s parallel market, Nomu, also rose, gaining 129.67 points, or 0.46 percent, to close at 28,142.99. This comes as 41 of the listed stocks advanced, while 33 retreated. 

The MSCI Tadawul Index increased by 4.27 points, or 0.29 percent, to close at 1,455.44. 

The best-performing stock was Mouwasat Medical Services Co., with its share price surging 9.97 percent to SR78.30. 

Other top performers included Fawaz Abdulaziz Alhokair Co., which saw its share price rise 9.92 percent to SR14.18, and Saudi Reinsurance Co., which posted a 9.71 percent gain to reach SR53.10. 

Umm Al Qura for Development and Construction Co. recorded the day’s steepest decline, with its share price slipping 3.47 percent to SR25.05.   

Sahara International Petrochemical Co. and Saudi Steel Pipe Co. also saw declines, with their shares dropping by 2.82 percent and 2.58 percent to SR17.90 and SR52.90, respectively.   

On the announcements front, Ades Holding Co. reported interim financial results for the first three months of the year, posting a net profit of SR196.6 million — a 6.3 percent decline compared to the previous quarter. It said that the drop in net profit reflects an increased ratio of depreciation and tax costs to revenue in this period.   

The company’s total comprehensive income saw a 45.7 percent quarter-on-quarter decrease in the first quarter of 2025 to reach SR170.8 million.  

Ades Holding Co.’s share price traded 0.94 percent lower on the main market during today’s session to reach SR14.78.   

In another announcement, Makkah Construction and Development Co. reported a 32.7 percent year-on-year increase in net profit for the same period, reaching SR150 million.   

The company credited the growth to higher revenues from the hotel and towers this quarter, driven by the inclusion of the last nine days of Ramadan, increased mall revenues, and gains from financial assets classified at fair value through profit or loss.   

Similarly, the company’s total comprehensive income rose to SR758 during the quarter, up from SR576 last year.   

The MCDC’s share price traded 1.5 percent higher to reach SR108.20. 

Topics: TASI MSCI NOMU stocks

Saudi Arabia posts $15.6bn budget deficit in Q1 with resilient non-oil growth

Updated 05 May 2025
Dayan Abou Tine
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Saudi Arabia posts $15.6bn budget deficit in Q1 with resilient non-oil growth

Updated 05 May 2025
Dayan Abou Tine

RIYADH: Saudi Arabia recorded a deficit of SR58.7 billion ($15.65 billion) in the first quarter of 2025, driven by declining oil revenues and increased spending to support Vision 2030 development initiatives, according to the Finance Ministry.

According to the quarterly budget performance report, total revenues reached SR263.61 billion, marking a 10.16 percent decline compared to the same period last year.

The drop is primarily attributed to reduced oil revenues, which fell 17.65 percent year on year to SR149.81 billion, driven by ongoing OPEC+ production cuts that curbed export volumes despite relatively steady global oil prices.

Oil income accounted for 56 percent of total government revenues, down from 62 percent in Q1 2024.

In contrast, non-oil revenues continued to grow modestly, rising 2.06 percent to SR113.81 billion, underpinned by structural economic reforms and the Kingdom’s diversification agenda under Vision 2030.

Taxation on goods and services remained the largest contributor to non-oil income, generating SR71.56 billion—up 2.37 percent year on year. Other non-oil revenue sources, including fees and investment returns, added SR25.41 billion, making up 22.3 percent of the non-oil total.

Total government expenditures in the quarter rose 5.39 percent year on year to SR322.32 billion. The increase reflects Saudi Arabia’s continued investment in strategic initiatives and priority development projects aligned with Vision 2030 goals.

Compensation for government employees remained the largest expenditure category, totaling SR146.09 billion—an annual increase of 6.24 percent—and accounting for 45.3 percent of total spending.

Expenditures on goods and services amounted to SR64.63 billion, or 20 percent of the quarterly total, while capital spending represented 8.6 percent. Other operational costs comprised 10.6 percent.

The first quarter deficit was entirely financed through debt instruments, pushing Saudi Arabia’s total public debt to SR1.33 trillion—up 19.08 percent from a year earlier.

Of this, 60 percent was sourced domestically, with the remainder attributed to external borrowing, in line with the Kingdom’s debt diversification strategy.

Despite the fiscal shortfall, the ministry noted that the quarterly figures remain consistent with the government’s 2025 budget plan. Revenues in the first quarter represent 22.3 percent of the full-year target, while expenditures account for 25 percent of the planned annual spend.

Looking ahead, Saudi Arabia’s fiscal outlook may receive a boost from higher oil output. OPEC+ recently announced plans to accelerate the unwinding of prior production cuts, including a June increase of 411,000 barrels per day. Combined with earlier boosts in April and May, the group plans to restore a total of 960,000 barrels per day—reversing 44 percent of the 2.2 million bpd reduction agreed upon in December 2024.

Topics: deficit budget Saudi Arabia Oil revenue non-oil income

Saudi Aramco raises June oil prices for Asian markets

Updated 05 May 2025
Arab News
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Saudi Aramco raises June oil prices for Asian markets

Updated 05 May 2025
Arab News

RIYADH: Saudi Aramco has increased its official selling price for crude oil destined for Asia in June, ending a two-month streak of price cuts, the company confirmed in an official statement on Sunday.

The state-owned oil giant raised the price of its benchmark Arab Light crude by $0.20, setting it at $1.40 per barrel above the average of Oman and Dubai crude prices.

The adjustment comes despite persistent downward pressure on global oil markets due to concerns over rising supply and a fragile demand outlook.

The move follows Saturday’s announcement from the OPEC+ alliance, which agreed to boost oil production for a second consecutive month. The group, which includes both OPEC members and key allies like Russia, plans to increase output by 411,000 barrels per day in June.

Market observers are now closely watching the outcome of the next OPEC+ meeting, scheduled for May 5, which will further clarify the group’s production strategy heading into summer.

Saudi Aramco prices its crude oil across five density-based grades: Super Light (greater than 40), Arab Extra Light (36-40), Arab Light (32-36), Arab Medium (29-32), and Arab Heavy (below 29).

The company’s monthly pricing decisions impact the cost of around 9 million barrels per day of crude exported to Asia and serve as a pricing benchmark for other major regional producers, including Iran, Kuwait, and Iraq.

In the North American market, Aramco set the May OSP for Arab Light at $3.40 per barrel above the Argus Sour Crude Index.

Aramco determines its OSPs based on market feedback from refiners and an evaluation of crude oil value changes over the past month, taking into account yields and product prices.

Topics: Aramco OSP

UAE, Kuwait, and Qatar sustain non-oil growth in April: S&P Global

Updated 05 May 2025
Nirmal Narayanan
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UAE, Kuwait, and Qatar sustain non-oil growth in April: S&P Global

Updated 05 May 2025
Nirmal Narayanan

RIYADH: The non-oil private sectors of the UAE, Kuwait, and Qatar continued their expansion in April, supported by strong demand, improving output, and stable employment conditions, according to the latest Purchasing Managers’ Index surveys released by S&P Global.

In the UAE, the headline PMI held steady at 54 for a second consecutive month, reflecting continued momentum in the country’s non-oil economy. While output growth eased to a seven-month low, firms ramped up hiring at the fastest rate in nearly a year to manage capacity pressures. New orders surged, underpinned by the strongest international demand in five months.

This robust performance aligns with a wider regional trend of economic diversification, as Gulf nations—including Saudi Arabia—work to reduce their long-standing reliance on oil revenues.

“The April PMI results signaled a notable uptick in hiring activity across the non-oil private sector,” said David Owen, senior economist at S&P Global Market Intelligence.

“After several months of mild increases in payroll numbers, despite robust sales growth, job creation rose to its highest level in 11 months.”

Owen noted that the hiring push was largely aimed at easing backlogs, which, while still rising, did so at the slowest pace in six months. “That said, employment growth was still modest overall, adding to suggestions that some firms may be struggling to recruit,” he added.

Any PMI reading above 50 indicates expansion in the non-oil private sector, while a figure below 50 denotes contraction.

Business confidence in the UAE climbed to its highest level so far in 2025, as firms cited strong demand pipelines and positive expectations. Input purchases rose again in April, though at a slower pace than March, which had marked a 68-month high.

“Firms are hopeful that elevated demand levels and strong pipelines, as characterized by steeply rising backlogs, should propel activity higher in the coming months,” Owen said.

Despite increased purchasing and faster supplier delivery times, stock levels remained largely unchanged for the second consecutive month. Business optimism also rose for the third straight month in April.

In Dubai, operating conditions in the non-oil private sector improved at a slower pace due to weaker growth in new business inflows. Nonetheless, order books continued to expand sharply, driving strong overall business activity. Employment rebounded in April after a brief dip in March, as companies aimed to boost capacity. However, firms in Dubai expressed subdued confidence about future activity, with sentiment among the lowest on record.

Kuwait sees strongest output

Kuwait's non-oil private sector saw significant gains in April, with the country’s PMI rising to 54.2 from 52.3 in March—marking one of the sharpest expansions on record since the survey began in 2018.

“It was a bumper start to the second quarter of 2025 for non-oil companies in Kuwait, with a further influx of new orders leading companies to expand output at one of the sharpest rates since the survey began,” said Andrew Harker, economics director at S&P Global Market Intelligence.

The expansion was driven by robust new order growth, supported by competitive pricing and strategic marketing efforts. However, firms faced rising input costs that made it harder to maintain price stability.

While employment rose only marginally, the minimal hiring contributed to a further buildup in outstanding work.

“It remains to be seen, however, whether firms will be able to keep restricting selling prices in a scenario where input costs are rising sharply,” Harker noted. “The coming months will illustrate the extent to which companies are happy to see margins come under pressure in order to keep orders flowing in.”

Kuwaiti firms also reported a notable increase in export orders. Optimism about future output remained high, supported by competitive strategies, product development, and marketing.

Qatar growth slows slightly

Qatar’s non-oil sector saw a slight dip in overall momentum in April, with its PMI falling to 50.7 from 52 in March. Despite the decline, the index stayed above the neutral 50 mark for the 16th consecutive month, reflecting continued—if slower—growth.

Output among Qatari non-energy firms rose for the first time in 2025, but the sector faced a drop in new business and a cooling labor market.

“The PMI indicated continuing growth of the non-energy private sector economy at the start of the second quarter, but there was a loss of momentum owing mainly to a renewed reduction in new business and slower employment growth,” said Trevor Balchin, economics director at S&P Global Market Intelligence.

“The latest figure of 50.7 was the lowest in three months and below the long-run trend level of 52.3, as weaker demand offset an increase in total output.”

Growth was led by the manufacturing, services, and wholesale and retail sectors, while construction activity remained weak despite signs of stabilization.

Job creation remained positive across sectors, although April saw the slowest employment growth since August 2024.

“The employment component remained elevated in April, indicating further strong jobs growth. That said, there was evidence that the recent labor market boom was easing, with the rate of job creation down at an eight-month low,” Balchin said.

Wage growth also slowed to a five-month low but remained among the strongest since the survey’s inception in 2017.

Looking ahead, Qatari businesses maintained optimism for the year ahead, citing growth in real estate, infrastructure development, tourism, and a rising expatriate population as key drivers.

Topics: GCC PMI non-oil Growth GDP

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