Saudi Arabia’s Public Investment Fund has invested $1.3 billion in four domestic contractors as part of its wider plan to back strategic sectors central to the diversification of the kingdom's economy.
The fund subscribed to new shares — as part of the companies' capital increases — amounting to “significant minority stakes” in Nesma & Partners Contracting Company, ElSeif Engineering Contracting Company, AlBawani Holding Company and Almabani General Contractors Company.
The investment is intended to improve local supply chains for projects in the country, drive the use of advanced technology and stimulate the growth of the contracting sector, the PIF said on Tuesday.
“These partnerships demonstrate PIF’s commitment to unlock the capabilities of key strategic sectors in Saudi Arabia, including the construction, building components and services sector, which has been identified as one of 13 strategic sectors locally,” said Yazeed Al-Humied, deputy governor and head of Mena investments at the PIF.
“PIF’s investment in four national champions will support local capacity expansion across the sector and stimulate private sector participation and investment to meet current and future demand, in line with Vision 2030.”
The PIF is one of the world’s largest sovereign wealth funds, with about $620 billion in assets under management.
It is diversifying its investment portfolio as it seeks to grow its asset base to more than $1 trillion by 2025.
The fund is at the centre of the Saudi Vision 2030 initiative to diversify the country’s economy and reduce its reliance on hydrocarbons.
The investment in the four companies comes amid a flurry of announcements from the PIF over the past two months.
These include the acquisition of a 30 per cent stake in Saudi Tabreed and a joint venture agreement with US sustainable agriculture company AeroFarms to build indoor vertical farms in the kingdom.
The four contracting companies in which PIF has invested have executed and managed complex large-scale projects in several sectors across various regions of Saudi Arabia, the sovereign wealth fund said.
Their partnerships with the PIF will support their regional and international expansion, it said.
The investments will also help increase private sector local content, contribute to growing Saudi Arabia’s gross domestic product and increase the construction services sector’s competitiveness, the PIF said.
Established in 1981, Nesma & Partners is a contractor in Saudi Arabia providing services in the industrial, oil and gas, civil, infrastructure and electromechanical sectors.
Its clients include Saudi Aramco, the PIF, Neom, the Diriyah Gate Development Authority and the General Authority of Civil Aviation.
El Seif Engineering Contracting Company, which was established in 1975, has delivered projects in the civil, infrastructure, entertainment, tourism, residential, commercial, military, education, healthcare and transport sectors.
“We are delighted to welcome PIF as a partner to expand our work in the coming years,” said Khaled El Seif, chairman of El Seif Engineering Contracting Company.
“The investment will support the growth and development of the sector and will contribute to scaling up capacity and private sector local content.”
Established in 1991, AlBawani Holding is a diversified group of Saudi companies, with a construction division.
It has completed more than 260 projects and currently has projects worth 12 billion Saudi riyals ($3.2 billion), according to its website.
“The construction services sector is of significant importance to the Saudi economy, and we believe that PIF’s contribution and investment into this sector will help support the realisation of Vision 2030’s ambitious projects,” said Fakher AlShawaf, chairman of AlBawani Holding Company.
Almabani is an engineering procurement and construction company with a 50-year history in the industry.
“The kingdom aims to increase the role of the private sector within the economy, and this investment will enhance the ability of private sector firms to provide key services,” said its chairman Youssef Nehme Tohme.
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Citizenship-by-investment programmes
United Kingdom
The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).
All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.
The Caribbean
Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.
Portugal
The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.
“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.
Greece
The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.
Spain
The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.
Cyprus
Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.
Malta
The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.
The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.
Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.
Egypt
A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.
Source: Citizenship Invest and Aqua Properties
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