PIF-backed Rakiza raises $1bn for first infrastructure investment fund

Rakiza, an infrastructure fund focused on Oman and Saudi Arabia, has raised $1 billion for its first investment vehicle and plans to secure additional financing through a second fund.

Managed by Oman Infrastructure Investment Management and Equitix, Rakiza — which is backed by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund — reached final close on March 17, with the strong participation of institutional investors, it said.

“Our target of raising over $1 billion is an important milestone, which will help Rakiza in further growing our infrastructure fund initiatives in the region,” said Muneer Al Muneeri, chief executive of Oman Infrastructure Investment Management.

“The success of and appetite for the fund demonstrates the need for sophisticated financial investors for this asset class.”

Last year, the PIF committed 1.13 billion Saudi riyals ($300 million) to Rakiza, according to Oman’s state news agency.

The Asia Infrastructure Investment Bank also invested $50 million in the infrastructure investment vehicle.

Public and private sector investment in infrastructure is on the rise, driven by a push by GCC governments to develop more essential projects through public-private partnerships.

Sovereign funds and government-related entities have also boosted local and cross-border investment to support domestic and regional development agendas.

Last month, the Saudi Fund for Development signed a preliminary agreement to back an infrastructure development project worth 1.2 billion riyals for the development of Al Dhahirah Special Economic Zone in Oman, according to a Saudi Press Agency report at the time.

Rakiza has begun to use the capital it raised, investing 25 per cent across three projects in Oman so far.

The fund holds a 30 per cent stake in a telecom tower portfolio in Oman, a share of about 31 per cent in a gateway container terminal at Sohar port and a majority stake in Khazaen Fruit and Vegetable Central Market in the sultanate, Rakiza said.

It invests in infrastructure projects that generate stable returns in the renewables, power and water, social infrastructure, telecoms and transport and logistics sectors.

The company’s pipeline of “near-term opportunities is strong and there are several investments which are nearing financial close”, it said.

It is also close to securing a deal in Saudi Arabia, according to Bloomberg.

Rakiza said its investment strategy was driven by privatisation efforts in the region and a push by governments to boost foreign direct investment, where first-mover investors with access to broader opportunities are able to achieve higher returns.

“The GCC is an attractive home for smart capital and an exciting investment destination for those with local access,” said Hugh Crossley, Equitix co-founder and chief executive.

“We are pleased to have such strong and growing partnerships with the region’s leading institutional investors.”

The fund’s offices in Muscat and Riyadh will continue to invest in and develop “compelling” infrastructure projects while supporting the achievement of relevant global environmental, social and governance goals set by key investors, it said.

“Rakiza’s investment decision-making processes undergo a rigorous ESG screening procedure,” the fund said.

“ESG data at portfolio companies is also actively monitored to ensure target companies behave in a socially and environmentally responsible manner and enhance their sustainability profile.”

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