{"id":463963,"date":"2026-02-09T15:49:12","date_gmt":"2026-02-09T15:49:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/463963\/"},"modified":"2026-02-09T15:49:12","modified_gmt":"2026-02-09T15:49:12","slug":"saudi-to-test-revised-pif-strategy-as-giga-project-funding-tightens","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/463963\/","title":{"rendered":"Saudi to test revised PIF strategy as giga-project funding tightens"},"content":{"rendered":"

PIF<\/a> Private Sector Forum opens today<\/p>\n

Plan will depend on investor feedback<\/p>\n

Possible 15% capital spending cut<\/p>\n

Saudi Arabia\u2019s Public Investment Fund<\/a> (PIF) is expected to test elements of its new strategy to sound out investors this week as it seeks billions from the private sector to keep its giga-project pipeline<\/a> moving, people familiar with the plans told AGBI.<\/p>\n

The oil-dependent kingdom has been forced to make adjustments<\/a> and difficult decisions after years of heavy spending ran into rising costs and execution hurdles, and lower crude prices squeezed fiscal space and tightened liquidity.<\/p>\n

As the PIF Private Sector Forum opens in Riyadh today, the fund and its 120 portfolio companies will pitch opportunities to investors and suppliers, giving an early read on how it is reworking its giga-project pipeline. Organisers said the forum is expected to yield more than 100 memoranda of understanding.<\/p>\n

PIF governor Yasir Al Rumayyan said in October<\/a> that the fund was in the final stages of approving a revised investment strategy for 2026-2030.<\/p>\n

But the new plan is still a test draft that could be reshaped after investor feedback, sources familiar with the process said, with a fuller version expected in the spring.<\/p>\n

The roughly $1 trillion sovereign wealth fund is also likely to cut capital spending by up to 15 percent, according to a person familiar with its finances.\u00a0<\/p>\n

\u201cThat number and timeframes can change slightly, but the direction is clear,\u201d one of the people told AGBI, declining to be named because the information is confidential.<\/p>\n

Further reading:<\/p>\n

Others with knowledge of the giga-projects said such a cut was expected.<\/p>\n

\u201cIt makes sense they are cutting capex because previous ambitions were too lofty,\u201d said Tim Callen, a visiting fellow at the Arab Gulf States Institute in Washington and former IMF mission chief for Saudi Arabia.\u00a0<\/p>\n

Oil prices have also softened \u2013 Brent is around $64 a barrel versus an $81 average in 2024 \u2013 and tightened the backdrop for state spending.<\/p>\n

Lower oil prices do not hit PIF directly but could reduce dividends from state-owned producer Aramco<\/a> flowing to the fund, constraining capital available for projects and increasing competition for borrowing across the public sector, Callen added.<\/p>\n

PIF has been contacted for comment.<\/p>\n

The Gulf\u2019s largest economy<\/a> has staked its efforts to diversify from hydrocarbon dependence on attracting foreign capital and investment.\u00a0<\/p>\n

But inflows remain far short of the kingdom\u2019s target of attracting $100 billion a year by 2030. Net inflows were SAR 72 billion ($19 billion) in the first nine months of 2025, based on official data.<\/p>\n<\/p>\n

\u201cRather than being an absolute strategy, to me this is [pieces of] a draft to see how it plays,\u201d a person with knowledge of the process said.<\/p>\n

\u201cThis is all going to come down to perception and how the market reads it. Then they\u2019ll go back and tweak it\u2026 It\u2019s the right way to do it. The real strategy will come out in April.\u201d<\/p>\n

Work on the strategy follows a sweeping audit triggering a reprioritisation of projects, according to multiple sources from the construction and banking industries and the giga-projects.<\/p>\n

At a board meeting in late 2024, PIF approved sharp cuts to project budgets<\/a> \u2013 some by as much as 60 percent.<\/p>\n

The authorities have been stricter reviewing feasibility and financing, which has led to work being suspended on headline developments such as Neom<\/a> and the Mukaab, the iconic cube that was meant to be the heart of Riyadh\u2019s New Murabba<\/a> masterplan.<\/p>\n

\u201cEach project is now assessed by detailed financial metrics, and anything below a certain internal rate of return will be shelved,\u201d one banker familiar with the approach said.<\/p>\n

However, another person cautioned that the data is still limited.<\/p>\n

\"SaudiExpo 2030 RiyadhA render of the Expo 2030 site in Riyadh. The new investment strategy puts Expo and the 2034 World Cup at the top of the priority list<\/p>\n

The new investment protocol puts Expo 2030<\/a> and the World Cup<\/a> at the top of the priority list.<\/p>\n

It is also set to renew emphasis on closer coordination across government, multiple people said \u2013 and incentives and partnership models to encourage investors.<\/p>\n

\u201cNo contract of significance is going to be awarded this year unless it\u2019s got the words Expo or World Cup,\u201d a person with direct knowledge of the tenders pipeline said.<\/p>\n

In addition to the venues<\/a>, this includes prioritisation of projects tied to these events including transportation, mobility and energy infrastructure, and entertainment, the person said.<\/p>\n

Fitch Ratings estimates only $115 billion worth of giga-project contracts have been awarded since 2019, with roughly half of their total funding \u2013 including debt and capital \u2013 coming from PIF, which has become the financier of last resort for parts of Vision 2030<\/a>.<\/p>\n<\/p>\n

Investment minister Khalid Al Falih told the Future Investment Initiative summit<\/a> in Riyadh in October that the giga-projects \u201chave been taking a lot of resources from the government\u201d and urged both local and foreign investors to step in.<\/p>\n

Fitch expects banks\u2019 giga-project financing to grow. This might, however, put pressure on banks\u2019 capital as they will need to set aside increased levels to mitigate higher risk-weightings for the developments, the ratings agency said.<\/p>\n

PIF is also said to be weighing share sales in several portfolio companies to raise cash, Semafor reported<\/a>, and the fund has begun tapping family offices, according to Bloomberg<\/a>.<\/p>\n

\u201cFDI and portfolio investment has generally disappointed targets\u2026 I\u2019m not certain this will be a game changer,\u201d said Rachel Ziemba, founder of Ziemba Insights.<\/p>\n

\u201cProjects less linked to key areas or very costly will likely be delayed, scaled back or cancelled,\u201d she said. <\/p>\n

\u201cRationalisation is wise to rethink about how funds are being prioritised and not a sign of crisis, but liquidity is tighter and there are some hard choices ahead.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"PIF Private Sector Forum opens today Plan will depend on investor feedback Possible 15% capital spending cut Saudi…\n","protected":false},"author":2,"featured_media":463964,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-463963","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/463963","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=463963"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/463963\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/463964"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=463963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=463963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=463963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}