Skip to content Skip to Search
Skip navigation

PIF buys stakes in construction firms as Saudi boom continues

The Saudi sovereign wealth fund has become a shareholder in Nesma & Partners Contracting, which is building this hospital in Jeddah

Saudi Arabia’s Public Investment Fund (PIF) has spent $1.3 billion buying “significant” minority stakes in four local construction companies, the sovereign wealth fund said in a statement on Tuesday.

The kingdom is enjoying a building boom, with projects valued at more than $1.1 trillion underway and a further $64 billion of construction contracts forecast to be awarded this year. 

The PIF’s investments will help the local construction industry expand capacity, improve supply chains, accelerate the adoption of advanced technologies and support Saudi’s Vision 2030 economic diversification plan, it said. 

The fund is now a shareholder in Al Khobar’s Nesma & Partners Contracting Co, Jeddah’s Almabani General Contractors Co and Riyadh’s El Seif Engineering Contracting Co and Al Bawani Holding Co. 

It did not specify how much it had invested in each of the four firms or the size of the stakes acquired. 

“PIF will enable the four companies to develop regional and international partnerships, which will help increase the adoption of the latest technologies and the transfer of knowledge from global engineering, procurement, and construction companies,” the statement said. 

Construction is one of 13 strategic local sectors the PIF has targeted for investment and expansion as of part of Vision 2030. It aims to invest at least SAR 150 billion ($40 billion) annually in the domestic economy.

“The ambitions of Saudi Vision 2030 and the Public Investment Fund are playing a key role in driving giga-projects and other major developments across the kingdom,” Ben Edwards, group head of cost, commercial and procurement at state-backed developer Red Sea Global (RSG), told AGBI earlier this month. 

“Many projects are emerging from the master-planning and design phase, which will feed into more tenders entering the market as focus turns to construction and then operations.”

Saudi construction activity was the highest in the world in the final quarter of 2022, with the kingdom described as a “leading light in the Mena region and globally”.

A new report by the Construction Activity Index of the Royal Institution of Chartered Surveyors (Rics) revealed that the 12-month projected profit margins of Saudi firms were a “clear standout metric” with a +62 percent reading.

This was the second highest reported since the survey began in Q3 2018 and up from the +49 percent reported in Q3 2022.

Saudi Arabia’s real GDP grew 9.0 percent last year and will expand a further 2.8 percent in 2023, S&P Global Ratings estimates.

Latest articles

The funding of Midas is among the 'biggest ever' Series A fund raise by a Turkish fintech

Turkish fintech Midas raises $45m for new products

Turkish fintech startup Midas has raised $45 million in equity funding to expand its services and launch new products. The new products include cryptocurrency trading, mutual funds and savings accounts. The funding is among the “biggest ever” Series A fund raise by a Turkish fintech and comes less than three years after Midas was launched.  […]

Over 400 global food brands are taking part in the SaudiFood Manufacturing show in Riyadh this month

Saudi Arabia’s food factory count rises to 1,300

The total number of food factories operated by the Saudi Authority for Industrial Cities and Technology Zones (Modon) has reached 1,300, across 36 cities. The increase signifies the growing capacity of the domestic food industry and its localisation efforts, the state-run Saudi Press Agency reported. Food industry companies have recorded a growth rate of more […]

Abu Dhabi’s last debt market activity included a $2 billion bond in May 2021 followed by a further $3 billion in September

Abu Dhabi launches $5bn bond issue

Abu Dhabi has initiated $5 billion in a three-tranche bond after a hiatus of three years, according to a media report. The $1.75 billion five-year bond, $1.5 billion 10-year tranche and $1.75 billion 30-year issue was priced at 35, 45 and 90 basis points, respectively, over US Treasuries, fixed income news service IFR reported. Abu Dhabi […]

A square in Cairo

‘Worst is behind us’ in Egypt’s black market dollar war says BMI

The Egyptian government’s priority for 2024 should be to keep the gap between the official and parallel exchange rates for Egypt’s pound and the US dollar as narrow as possible, says BMI Research. In a webinar on Tuesday BMI, a Fitch Group firm specialised in country risk, said that “the worst is behind us” in […]