Saudi Arabia has signed a commitment to invest up to $10 billion in Russia, the Russian Direct Investment Fund said Monday, July 6, according to The Wall Street Journal.
Russia’s latest pact with its closest oil-producing rival marks Moscow’s efforts to replace Western funding, which has been hit by sanctions, just a few days before a summit of five major emerging economies, known by the acronym of Brics, to be held in Russia’s town of Ufa.
The majority of the $10 billion from Saudi Arabia’s sovereign-wealth fund, Public Investment Fund, will be spent on Russia’s agricultural projects, as well as on medicine, logistics, and the country’s retail and real estate sectors, RDIF chief Kirill Dmitriev told the Journal.
The agreement was reached after a “great” contribution from Mohammad bin Salman Al Saud, Deputy Crown Prince of Saudi Arabia, who met Russia’s President Vladimir Putin during an annual economic forum in Saint Petersburg in June, the RDIF said.
“The key investments will take place on Russian territory, but we will also invest in Saudi Arabia, which we consider a very promising market,” Dmitriev said.
The RDIF also said it signed an agreement with another Saudi Arabian sovereign-wealth fund, the Saudi Arabian General Investment Authority, under which the two sides would seek mutual investment opportunities in Saudi Arabia and other Middle East countries.
Facing a political standoff with the West, Moscow has been turning eastward, saying it would seek Asian investors to reduce reliance on Europe and the U.S. In early May, Russia signed economic deals with China via the RDIF worth up to $25 billion, with Chinese banks investing in Russian companies. However, so far, there has been little evidence that China’s money has started flowing into Russia under this pact.
The Wall Street Journal