PIF to set up new companies
RIYADH: Saudi Arabia’s Public Investment Fund (PIF) aims to establish companies in areas including housing, petrochemicals and technology as it expands its investments locally and overseas, Finance Minister Ibrahim Al-Assaf said.
His statement, quoted by Asharq Al-Awsat, a sister publication of Arab News, was a fresh sign that Saudi authorities plan to use government-owned funds more actively to support economic reforms and development.
The PIF was established in 1971 to help finance strategic economic projects.
It has assets under management worth about $5.3 billion, according to the Sovereign Wealth Fund institute.
At a recent meeting, the Cabinet authorized the PIF to establish companies inside and outside the Kingdom, alone or in partnership with other institutions from the public or private sectors.
“This decision aims at…giving the fund more flexibility and enabling it to expand investment activity locally and overseas,” Al-Assaf was quoted as saying.
He added: “The fund has initiatives to establish companies working in the petrochemical, housing, housing finance and technology sectors.”
Previously, the PIF had to obtain cabinet approval for individual projects.
In March, the Cabinet gave permission for the PIF, Saudi Aramco and Saudi Basic Industries Corp. to establish an industrial investment company with capital of SR2 billion.
Saudi economist Abdulwahab Abu Dahesh said the Cabinet’s decision this week indicated the government wanted to encourage the private sector to participate in big development projects, since government institutions were having trouble managing them alone.
The Shoura council recently debated a proposal to set up a Saudi Arabian sovereign wealth fund, which could mean more active management of the Kingdom’s budget surpluses.