JEDDAH, 21 November 2005 — The Saudi Arabian General Investment Authority (SAGIA) plans to open offices in China, the United States, Britain, Germany and other countries in its bid to attract investments in infrastructure projects worth billions of riyals.
SAGIA chief Amr Al-Dabbagh said the Kingdom was seeking some $120 billion investments in power generation, transmission and distribution in its bid to double electricity generation capacity to 60,000 megawatts within 20 years.
Speaking to reporters in Riyadh yesterday, Al-Dabbagh said foreign direct investment (FDI) was “crucially important” for the Kingdom to finance key projects like power and water desalination plants, communications, energy and others.
SAGIA has recently started an aggressive policy to attract foreign funds, providing incentives and tax breaks for investors and removing hurdles facing them, he said.
The authority concluded 17 agreements with various government departments aimed at knocking down hurdles to local and foreign investment.
Foreign investors can now establish projects totally owned by them. “There is no restriction on foreigners buying 100 percent of Saudi companies or totally owning their projects,” Dabbagh said.
A decision issued recently by Saudi authorities stipulates that foreign businessmen will be granted visas within 24 hours to facilitate their entry into the Kingdom, he said. But 75 percent of employees in most foreign projects must be Saudi nationals, he pointed out.
Speaking about Saudi Arabia’s accession to the World Trade Organization (WTO), Dabbagh said it would boost the flow of foreign investments into the Kingdom.
“Accession will significantly enhance foreign direct investment. We will have more access to world markets,” he explained. The WTO officially agreed to admit Saudi Arabia as its 149th member on Nov. 11 after 12 years of talks. The Kingdom will officially become a member on Dec. 11.
Dabbagh said the WTO accession would not change the Kingdom’s investment strategy. The strategy paid off handsomely in the first half of this year with the Kingdom receiving a record $17.3 billion in foreign investments, a 17-fold increase over the same period last year, he said.
In the second quarter alone, the Kingdom received $10.9 billion in foreign investments, a spectacular 46-fold increase over the corresponding period of 2004, Dabbagh said.
Saudi Arabia has offered projects worth SR2.3 trillion to foreign investors. Infrastructure projects offer the largest investment opportunity of $140 billion, according to Omar Bahlaiwa of the Council of Saudi Chambers of Commerce and Industry.
The petrochemicals sector comes second with $92 billion projects followed by electricity and water $88.9 billion, telecommunications $60 billion, tourism $53.3 billion, natural gas $50 billion, agriculture $28.3 billion and information technology $10.7 billion.
