Saudi Arabia, Pakistan ‘to sign deals worth up to $20 billion’

Pakistan army trucks park outside a presidential palace as security is beefed up in Islamabad ahead of the visit of Crown Prince Mohammed bin Salman. (AP Photo/B.K. Bangash)
Updated 17 February 2019
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Saudi Arabia, Pakistan ‘to sign deals worth up to $20 billion’

  • More than 30 public and private companies are poised to invest in Pakistan, including Saudi Aramco, SABIC and ACWA Power
  • The sectors targeted for Saudi investment include oil refining, petrochemical, mining, construction, power generation, agriculture and glass

KARACHI: Saudi Arabia is expected to announce investments in Pakistan worth between $15 billion and $20 billion during Crown Prince Mohammed bin Salman’s official visit, according to the head of Pakistan’s Board of Investment.

The Kingdom and the UAE in recent months have offered Pakistan more than $30 billion in loans and investments to tackle a soaring current-account deficit. The Saudi crown prince is due to sign off on his country’s deals, including one for a $10 billion oil refinery in Pakistan’s Gwadar Port.

“We are expecting Saudi investment in the range of $15 billion to $20 billion based on the interest investors have expressed so far,” said Haroon Sharif, minister of state and chairman of the Board of Investment.

Sharif previously said that Pakistan expected investments worth about $15 billion from Saudi Arabia over the next three years, and about $40 billion from Saudi Arabia, the UAE and China combined in the next three to five years.

Mian Mehmood, the Pakistani head of the Pakistan-Saudi Arabia Joint Chamber of Commerce and Industry, said recently that in addition to the oil refinery project, a further $10 billion is expected to be invested in sectors other than oil and gas, bringing the total to $20 billion.

“About 25 to 30 agreements are expected to be finalized during the visit of the crown prince,” said Mehmood who recently led a business delegation to the Kingdom to explore bilateral investment and cooperation opportunities.

More than 30 public and private companies are poised to invest in Pakistan, including Saudi Aramco, SABIC and ACWA Power, he added.

The sectors targeted for Saudi investment include oil refining, petrochemical, mining, construction, power generation, agriculture and glass.

“Ten Saudi manufacturing companies working in construction and allied materials, and 10 companies interested in the food processing sector will come to sign agreements,” Mehmood said.

Speaking this month during a visit to Gwadar to inspect the site of the $10 billion oil refinery, Saudi Energy Minister Khalid Al-Falih said: “Saudi Arabia wants to make Pakistan’s economic development stable through establishing an oil refinery and partnership with Pakistan in the China-Pakistan Economic Corridor.”

Work on the refinery is expected to begin within 18 months.

“Once the project starts production, the country would be able to save about $2 billion in foreign exchange on costly imports,” said Samiullah Tariq, the head of research at investment firm Arif Habib Limited.


SoftBank to launch Vision Fund 2 mega-venture

Updated 26 min 49 sec ago
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SoftBank to launch Vision Fund 2 mega-venture

  • Vision Fund 2 will aim to pull in existing investors such as the Public Investment Fund in Saudi Arabia and Mubadala in the UAE
  • Vision Fund 2 is expected to at least equal the original fund’s $97 billion fund, and could reach $150 billion

LONDON: The global mega-investor SoftBank Vision Fund is preparing to launch another giant investment venture.
Vision Fund 2 will aim to pull in existing investors such as the Public Investment Fund in Saudi Arabia and Mubadala in the UAE, the biggest investors in the original fund along with SoftBank, the Japanese group run by Masayoshi Son.
Sources told Arab News that Vision Fund 2 is expected to at least equal the original fund’s $97 billion fund, and could reach $150 billion — which would make it the largest private investment fund in history.
A team from SoftBank Investment Advisers led by its chief executive Rajeev Misra and Masayoshi Son have been in preliminary discussions with potential investors for several months.
They have been talking to sovereign wealth funds in the Middle East and elsewhere, as well as big global corporates, some of which were also investors in the first fund.

*** Read our full interview with CEO Rajeev Misra here: SoftBank Vision Fund stands shoulder to shoulder with Saudi Arabia — CEO Rajeev Misra ***
Investment is also expected from global banks, insurance companies and pension funds, and SoftBank is expected to put up about $40 billion.
The first phase of the launch is due to end “in the next few months,” with a final close around 12 months later.
The original fund plans to return profits to existing investors over the next few months, including big partners such as PIF, Mubadala and SoftBank. If they see healthy returns they may be more likely to invest heavily in the new fund.
The interests of Saudi Arabia and the Vision Fund align as the Kingdom diversifies away from reliance on oil, Misra told Arab News. “Our commitment is to support the creation of tens of thousands of jobs in Saudi Arabia, high-tech jobs not blue collar, over the next few years,” he said.