Finance PIF in $50bn pact with Chinese financers By Pramod Kumar, Andrew Hammond August 2, 2024, 9:24 AM PIF Executives from PIF and Agricultural Bank of China at the signing ceremony. The move is part of PIF’s strategy to foster institutional partnerships globally PIF signs six MoUs with Chinese banks Funding for giga-projects China is top Saudi trade partner The Public Investment Fund, Saudi Arabia’s sovereign wealth fund, has signed six memorandums of understanding worth up to $50 billion with Chinese financial institutions as it seeks to raise more cash for its giga-projects. The agreements were signed with the Agricultural Bank of China, Bank of China, China Construction Bank, China Export & Credit Insurance Corporation, Export-Import Bank of China and the Industrial and Commercial Bank of China. A statement said the MoUs are “encouraging two-way capital flows through both debt and equity”, but gave no more details. PIF did not respond to a request for comment. NewsletterGet the Best of AGBI delivered straight to your inbox every week PIF is considering various strategies to raise money for Saudi Arabia’s economic reform plan after lower-than-expected oil revenues and foreign direct investment. The fund has also reduced its US holdings as part of a shift towards local investment and has raised debt this year. The MoUs were overseen by Fahad AlSaif, who was appointed last month as head of the global capital finance division, responsible for “guiding the development of the fund’s overarching investment strategy”. Aramco and PIF invest in Saudi-Chinese steel venture Giga-project slowdown to hit Riyadh population growth Frank Kane: Oil traders’ view from the beach is not entirely sunny PIF has $978 billion of assets under management, according to data tracker Global SWF, making it one of the world’s biggest sovereign wealth funds. But it carries the burden of funding $1.25 trillion of projects. PIF has been angling for more Chinese investment. Representatives of PIF subsidiary Neom — the most expensive of the giga-projects — met 500 business leaders and officials in Beijing and Shanghai during the China leg of a global funding tour in March. In July, another PIF subsidiary, Renewable Energy Localization Company, signed three joint venture agreements with Chinese companies to support Saudi Arabia’s clean energy needs. Slower economic growth in China in the second quarter of this year has raised concerns about Saudi Arabia’s ability to maintain funding lines from its main trading partner. The Chinese economy grew at a year-on-year rate of 4.7 percent, down from 5.3 percent in the previous quarter. China is also looking for more Saudi investments. In June Saudi state oil company Aramco awarded a SAR5.2 billion contract to Chinese state energy major Sinopec to expand its domestic natural gas pipeline. PIF agreed last month to invest $500 million in Hong Kong Chaoshang Group. The US, Riyadh’s key Western ally, is trying to discourage Saudi ties with China, as its trade rivalry with China heats up.