The Public Investment Fund Program is one of the leading sovereign wealth funds in the world. Its estimated assets are approximately $430 billion. The fund aims to become the biggest sovereign wealth fund in the world. In order to achieve this goal, the PIF program is a sophisticated and diverse portfolio through investments that that long-term and attractive both locally and globally. The current aim of the fund is to assist the economic progress of Saudi Arabia.
f PIF program
The purpose of PIF is to invest in various projects in KSA through equity, loans or allocations from the public funds. It functions to provide either medium or long-term loans to different government and private projects. The fund is interested in investing in projects that contribute to the welfare of Saudi citizens, such as those relating to renewable energy resources, telecommunication, aerospace, IT and housing finance.
Background of the PIF program
The Public Investment Fund Program was first established in 1971 with the intention of providing projects of national importance with financial aid. The goal was to help improve the economical situation of the Kingdom of Saudi Arabia. It has been the main source of investment and funding for the KSA ever since it was established.
In 2016, the Saudi government brought forth an unprecedented reform agenda called Vision 2030 which aims to evolve the Saudi economy into becoming more sustainable and enterprising. The government introduced 13 programs to implement these reforms, one of which aims to enhance the role of PIF. This is to increase diversity in the country’s economy and develop projects that are important to the national economy. The goal is to make this program an essential arm in achieving the Kingdom’s Vision 2030.
Investment History
Over the years since its inception, the PIF program has played a major role in financing essential projects in oil-refining, petrochemical, fertilizer and electricity sectors. The fund was granted the authority to finance companies in, and outside Saudia Arabia in 2014, either independently or in cooperation with private partners. Since 2015, the PIF has made investments in various companies and organizations in countries such as South Korea and the US. It also has stakes in leading companies such as Uber Technologies, Tesla, Facebook, Berkshire Hathaway and more.
Objectives of PIF Under Vision 2030:
The objectives of the PIF program under the Vision 2030 reforms include maximizing its assets, building strategic partnerships, launching new sectors and localizing knowledge and technologies.
Conclusion
The Public Investment Fund Program of the KSA is to become the financial arm of the Saudi government so that the aims of Vision 2030 can be achieved. The PIF will finance the strategic projects that are required for the economic prosperity of the KSA. Saudi Arabia has always played a central role in the Islamic world and it has had a great impact on other countries. To understand the effects of economic changes in Saudi Arabia, you can explore the kingdom.
