RIYADH: Saudi Arabia’s construction sector has projects worth SR8 trillion ($2.1 trillion) in the pipeline for the next eight years, according to a senior executive.
Speaking on the sidelines of the Future Investment Initiative in Riyadh, Jerry Todd, head of the National Development Division at the Public Investment Fund, told Arab News that the Kingdom’s well-established construction and building material sector is set to grow “very rapidly.”
He said: “We are currently looking at SR3 trillion of spending on building things at the PIF level and about SR8 trillion at the country level over the next eight years.”
As the Kingdom diversifies its economy away from oil and focuses on sectors like tourism, entertainment, technology and renewable energy, there is a need to build the infrastructure to support these industries.
Todd noted that Saudi Arabia is currently witnessing many young entrepreneurs putting business plans together, including in the tourism sector. He added that such developments will contribute to the social and cultural capital that the Kingdom creates and exports.
Reflecting its large size compared to neighboring nations, Todd emphasized that the Kingdom’s private sector is a “bit bigger” and has stronger capabilities, as there is a robust base to build on.
However, he noted that the private sector in Saudi Arabia is undergoing transitions characterized by the development of new industries.
Todd described the private sector as highly skilled and capable, with companies able to bring both capital and operating capacity into the Kingdom.
He also suggested that as building new industries at scale requires significant upfront investment in infrastructure, it creates opportunities for the PIF’s partners in the private sector.
Todd explained that due to the private sector’s high capabilities, it will benefit significantly from Saudi Arabia’s Vision 2030.
He also pointed out that unlike other sovereign wealth funds which act as hedges to their local economies, PIF is focused on improving the resilience of Saudi Arabia to global financial fluctuations.
Todd said: “It's meant to build the economy in such a way that independent of oil prices, independent what's happening around the rest of the world, we have the ability to employ people to generate economic rent to fund the social programs that the government provides to its citizens, national security, the operations of government, etc.”
In March, the PIF hosted a forum in Riyadh that connected the fund’s 50 portfolio companies with 4,000 private sector participants.
The event was part of PIF’s 2021-2025 strategy to “crowd in” commercial enterprises, creating opportunities for local businesses to collaborate in growing a more diversified, globally competitive economy.
Todd stated that the next private sector forum will kick off in February 2024 and is set to be “even larger.”