Saudi Arabia's PIF and AeroFarms team up to build indoor vertical farms in Mena

Saudi Arabia's Public Investment Fund (PIF) and US sustainable agriculture company AeroFarms have signed a joint-venture agreement to build indoor vertical farms in the kingdom and the wider Middle East and North Africa region.

The first farm, in Saudi Arabia, is expected to be the largest one in the Mena region, with an annual production of up to 1.1 million kilograms of crops, using proprietary agricultural technology, the PIF and New Jersey-based AeroFarms said in a joint statement on Wednesday.

The value of the deal was not disclosed.

The initiative will result in “significantly” higher yields while using up to 95 per cent less water compared with traditional field farming, the statement said.

The agreement will help in “increasing regional reliance on locally-produced, high-quality crops grown in a sustainable way using the latest technologies,” said Majed AlAssaf, head of consumer goods and retail for the PIF's Mena investments division.

“The PIF is enabling the growth of the food and agriculture sector and localising technology that can benefit private sector industry participants,” Mr AlAssaf said.

Saudi Arabia, the Arab world's biggest economy, has been enhancing its food growth in view of climate change challenges and a scarcity of water resources.

Saudi Vision 2030, the kingdom's economic diversification programme, has focused its sustainable development efforts on building a sustainable agricultural sector as well as boosting sectors that support food systems and improving agricultural productivity.

Indoor vertical farming, which is the practice of growing produce stacked one above the other in a closed and controlled environment, is a viable way of improving food security.

The global indoor vertical farming market is projected to grow by more than a quarter to about $21 billion by 2030, from an estimated $4.16 billion in 2022, according to data from Grand View Research.

On Tuesday, Abu Dhabi start-up Pure Harvest Smart Farms entered a strategic partnership with Saudi Arabia's National Agricultural Development Company to deliver a large-scale food security project in the kingdom.

The project aims to deliver more than 27 hectares of production in the near term.

Meanwhile, global food prices started to rise in 2020 when businesses shut down after the onset of the coronavirus pandemic, straining supply chains, Deep Knowledge Analytics said in a recent report.

High food prices — exacerbated by Russia's war in Ukraine — have exposed communities around the world to hunger, the UN's Food and Agricultural Organisation has said.

In particular, more than 141 million people in the Arab world face food insecurity, the International Monetary Fund said in October.

AeroFarms aims to “help solve the greatest agriculture challenges and increase food resiliency around the world”, said its co-founder and chief executive David Rosenberg.

Under the partnership, the indoor farms will optimise the use of natural resources, including water and agricultural land, with no need for arable land.

“Several” indoor farms will be built across the Mena region over the next few years, the statement said.

While “growing conditions are challenging with limited access to fresh water and arable land, we envision building together smart indoor vertical farms throughout the broader Mena region”, Mr Rosenberg said.

The PIF, Saudi Arabia's sovereign wealth fund, is at the centre of Riyadh’s economic diversification efforts and a major driver of the domestic economy.

It holds stakes in some of the kingdom’s biggest conglomerates and financial institutions, as well as in global companies such as Meta and Alphabet.

AeroFarms, established in 2004, has already built the world's largest indoor vertical farm and R&D centre in Abu Dhabi, at more than 8,300 square metres.