RIYADH: US asset management giant BlackRock will work with Saudi Arabia’s National Development Fund to help plough up to SR200 billion ($53 billion) into the Kingdom’s infrastructure over the next 10 years, it has been announced.
BlackRock will act as an adviser on running a National Infrastructure Fund, which will help deliver investment between now and 2030 in assets such as schools, hospitals, transport, and the digital foundation.
Announced on the eve of the Future Investment Initiative in Riyadh, the agreement is a significant step for the NDF, the lesser-known of the Kingdom’s agents for economic development, in comparison to its high-profile collaborator, the Public Investment Fund.
The institution contributes to Saudi Arabia’s plans to diversify the economy and develop infrastructure.
“The joining of the National Infrastructure Fund to the list of government lending institutions in the Kingdom will contribute significantly to supporting infrastructure projects in vital sectors such as transportation, water, energy, health, education, communications, digital infrastructure and others,” NDF Vice Chairman Mohammed bin Mazyad Al-Tuwaijri said.
“It will reflect positively on the development of the national economy and enhance the quality of life of the individual and society,” he added.
NDF hired BlackRock to advise it on the establishment of the fund, “to implement international best practices in the management and governance of specialized financial institutions and funds,” SPA said, citing Stephen Paul Groff, NDF’s governor.
“The fund also aims to contribute to the development of the financial sector by finding alternative solutions to finance infrastructure projects and encourage the private sector to invest in these projects,” SPA said.
The Public Investment Fund and NDF are at the centre of Crown Prince Mohammed bin Salman’s plans to diversify the Saudi economy and create jobs, with NDF tasked to mobilize private sector financing to support economic development.
BlackRock opened an office in Saudi Arabia in 2019 to capitalize on the government’s reform agenda.
The infrastructure fund will use structured financing products, including debt, equity and guarantees, “to de-risk infrastructure investment opportunities for local and global investors,” said Abdullah Abobakr, NIF project director.
“NIF will thus play a key role in broadening infrastructure investment opportunities and in deepening infrastructure capital markets in the kingdom”, he said.