Saudi Arabia’s foreign direct investment reached the highest level in more than a decade last year, mainly due to an oil pipeline deal in the second quarter.
Foreign direct investment in 2021 totaled $19.3 billion, the most since 2010, according to data published by the Saudi central bank on Monday. The bulk of that was from state oil company Saudi Aramco selling a $12.4 billion stake in an oil pipelines entity to investors led by EIG Global Energy Partners LLC. However even without that deal, FDI would have been at its highest level since 2016.
Crown Prince Mohammed bin Salman’s plan to diversify the kingdom’s oil-dependent economy seeks to secure more foreign investment. But the push has faced obstacles, with a series of unpredictable policy changes and the murder of Washington Post columnist Jamal Khashoggi by Saudi agents in 2018 alarming investors.
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A new national investment strategy last year set an FDI target of more than $100 billion annually by 2030, along with a target of increasing its contribution to gross domestic product to 5.7%. Meeting both of those goals would require more than doubling the size of the economy over the next eight years.
According to a report, Saudi Arabia’s investment minister said on Wednesday foreign direct investment (FDI) had seen a big jump this year, even without Aramco’s oil pipeline sale.
Minister Khalid al-Falih told an investment conference: “FDI has been fantastic this year … 60% jump excluding Aramco oil pipeline.”
Saudi oil producer Aramco (2222.SE) has agreed in April a $12.4 billion deal to sell a 49% stake in its pipelines to a consortium led by U.S.-based EIG Global Energy Partners.
Saudi Arabia and Britain also signed a memorandum of understanding to promote bilateral investment flows.
“The two governments will do everything they can do to coordinate to remove any barriers, synchronize and harmonize our policies and regulations,” Falih told reporters.
The potential for investment flows is in the range of hundreds of billions of dollars, he said.
Falih said Saudi Basic Industries Corp (2010.SE) will soon announce an investment in Britain.
He did not provide details, but a UK newspaper reported that SABIC is close to approving a major investment deal in a green energy project, which will support thousands of jobs on Teesside in northeast England.
HSBC on Wednesday signed a memorandum of understanding with Saudi Arabia to identify and promote sustainable investment opportunities for the kingdom.
