Saudi Arabia’s Public Investment Fund will create a new investment company to target real estate, energy and tourism projects in Jordan, as it continues to expand and diversify.
The Saudi-Jordanian Investment Fund Co. will start with $10 million of capital, which may rise to as much as $3 billion in the long term, the Public Investment Fund said in an emailed statement following Saudi King Salman’s visit to neighboring Jordan. The PIF will own 90 percent of the new fund, with the remainder held by a group of Jordanian companies, it said.
Saudi Arabia is trying to reduce the country’s oil dependence following the slump in crude prices since 2014, and the PIF is a key part of that plan. Deputy Crown Prince Mohammed bin Salman plans to list as much as 5 percent of the state-run oil company next year to anchor the PIF, which he wants to turn into the world’s largest sovereign wealth fund.
“Our efforts include the development of a portfolio that has greater geographical diversification,” PIF Managing Director Yasir Alrumayyan said in the fund’s statement.
Officials are rolling out a series of measures as the plan to overhaul the economy begins in earnest, including subsidy cuts and new taxes. Growth is expected to slow to 0.7 percent in 2017 as austerity measures take their toll, according to a Bloomberg survey of economists.
Central bank data released showed that net foreign assets held by the Saudi Arabian Monetary Authority dropped a further 1.9 percent in February to $507 billion — continuing an almost uninterrupted two-year slide.