Saudi’s giga-projects pushes PIF into profits
PIF faced funding challenges due to lower oil prices and subdued foreign direct investment
Dubai: Saudi Arabia's Public Investment Fund (PIF) achieved a significant turnaround, reporting a profit as revenues doubled to $88.3 billion (Dh324 billion) in 2023.
The sovereign wealth fund, as per its audited financial statement, consolidated five schemes to streamline management of its ambitious giga-projects amidst escalating costs.
PIF, central to Saudi Arabia's economic reform agenda, faced funding challenges due to lower oil prices and subdued foreign direct investment. However, revenue surged primarily from enhanced investment returns and equity revenues, culminating in a net income of $36.8 billion (Dh135 billion), marking a stark reversal from a $16 billion (Dh58.7 billion) loss in 2022. Assets surged by 25 per cent over the year to $977 billion (Dh3.5 trillion) from $778 billion (Dh2.8 trillion), with assets under management reaching an estimated $925 billion (Dh3.3 trillion) by June.
James Swanston of Capital Economics suggested that transferring more ownership of state oil giant Aramco to PIF could help it approach its target of managing $2 trillion (Dh7.3 trillion) in assets by 2030. Despite not being publicly listed, PIF and its subsidiaries doubled their stake in Aramco to 16 per cent through an 8 per cent share transfer this year.
The report indicated an increase in PIF subsidiaries from 146 to 168 in 2023, predominantly through local acquisitions, aligning with PIF's strategy to reduce external investments from 30 per cent to 20 to 25 per cent.