Saudi Arabia has long strived to diversify its economy in order to lead the economic and technological expansion looming in the Middle East. Riyadh is undoubtedly the country that is working the most in this direction, as evidenced by the ambitious Vision 2030 project. In order to achieve the progress that this entails, the Saudis have signed a memorandum of understanding with the American investment management company BlackRock, considered the largest in the sector internationally and managing more than 10 trillion dollars in assets. .
The partnership focuses on infrastructure development, with the aim of attracting major regional and international investors. Saudi Arabia has been trying for some time to attract foreign investors to the country in order to promote direct investment in Saudi Arabia, participation in projects under development and, in this way, to add value to the national economy. It is in this context that BlackRock, having signed a non-binding agreement with the Public Investment Fund, will become the bedrock on which the Middle East infrastructure strategy will be based.
The official Saudi Press Agency issued a statement stating that this alliance “intends to form a team specializing in infrastructure investments in Riyadh”. The sectors covered by this project are very diverse and range from energy to transport, including public services, water, environment, communications and social infrastructure. Apart from foreign investment, it also aims to enhance local investment by facilitating the participation of the Saudi private sector.
Although BlackRock’s intention is to expand its investments throughout the Middle East, the New York-based multinational’s first steps are focused on the Saudi market. In fact, to support this initiative, the Americans will assign an independent team to invest in the infrastructure of the Saudi capital.. Unsurprisingly, the leadership of Crown Prince Mohammed bin Salman has been key to a plan to grow the sovereign wealth fund’s assets under management to more than $1 trillion – up from $600 billion currently – by 2025.
Vision 2030 marks the line taken by Saudi Arabia, which aims to reduce dependence on the oil industry, create new sectors and stimulate job creation. In October last year, Riyadh already launched a National Infrastructure Fund to support projects worth around 200 billion rials – $53 billion – over the next ten years. A project in which BlackRock, whose presence in the capital has been a reality since 2019, when it set up an office in Riyadh, has already participated.
These movements are not the only ones to link the American company to the Saudi market. Also in 2019, it acquired a stake in the pipeline assets of Abu Dhabi-headquartered ADNOC Energy. Additionally, last year Black Rock spearheaded a coalition that also bought a stake valued at $15.5 billion in Saudi Aramco. The new memorandum signed with the Public Investment Fund demonstrates that the long-standing financial ties could not be more beneficial for both parties, and the BlackRock-Saudi partnership should not stop there.
One of Riyadh’s most ambitious initiatives is also on the horizon: the sustainable and futuristic city “The Line”, which will be part of the artificial intelligence-based city that will host the Asian Winter Games in 2029. , called NEOM. The city, which “unlike traditional cities, will prioritize people’s health and well-being over transportation and infrastructure”will run on 100% renewable energy and 95% of its space will be reserved for nature.
The project “The Line”, which is also part of the Vision 2030 framework, will span the northwest of the country and will be 200 meters wide, 500 meters high and 170 kilometers long. The objective of this initiative presented in 2021 is to welcome around nine million people. Among the peculiarities of this futuristic project, there will be no roads, cars or carbon emissions. For transportation, there will be a high-speed train that all residents will have access to.
Saudi sovereign wealth fund partners with BlackRock for infrastructure development in the Middle East