Saudi Arabia is intensifying efforts to diversify its economy by attracting foreign investors and reducing reliance on state funding. The Public Investment Fund (PIF) is implementing a new strategy, aligned with Vision 2030, to manage $40 billion in upcoming debt and projected spending of $70 billion in 2025.
Key PIF subsidiaries like NEOM and Avis may take on debt obligations, while the fund plans to issue euro bonds for the first time to appeal to investors from Europe and North America.
The PIF is actively guiding its companies toward international markets to secure financing.
Earlier this year, the PIF raised $4 billion from sukuk bonds, adding to the $14.3 billion secured since the year’s start. However, with 70% of exports and 40% of GDP tied to oil, Saudi Arabia’s economy remains vulnerable to energy price fluctuations and faces challenges from declining foreign investment and a growing budget deficit.
To address these issues, investment agreements worth $600 billion are planned with the United States, but reduced dividends from Aramco could complicate funding. The government is also considering a record $461 billion share sale and listing major companies on the Saudi stock exchange to boost capital.
Since the pandemic, the PIF has backed over 100 companies across sectors like tourism, AI, and energy, including large-scale projects such as the $63 billion Diriyah development. The government hopes strong demand for bonds will continue, but mixed investor interest has led the PIF to prioritize domestic projects, particularly as the 2034 World Cup approaches.