Saudi Arabia’s sovereign wealth fund, which aims to become a $2 trillion investment giant, is considering borrowing from banks for the first time as it seeks investments in the kingdom and abroad, according to people familiar with the matter.
The fund is willing to borrow as it seeks to diversify the kingdom’s oil-dependent economy and boost returns from investments, Managing Director Yasir Al-Rumayyan said in a Bloomberg Television interview in October. Saudi Arabia is stepping up efforts to turn the PIF into a global giant by giving it ownership of state-owned oil company Saudi Aramco, which is preparing for what could be the world’s biggest initial public offering.
The PIF is also behind several large real estate developments in Saudi Arabia, including a new city called Neom that will be built on the Red Sea Coast, an entertainment city on the edge of Riyadh and another tourism project on the Red Sea. It has also finalized an accord to take over the management of Riyadh’s $10 billion unfinished financial hub as the government attempts to revive the project, people familiar with the matter said last year.