Saudi PIF to Inject $266 Bn into New Projects

The Saudi Public Investment Fund invested nearly $1.3 billion in four national companies in the contracting sector during the last period, announced Governor Yasser al-Rumayyan.

Rumayyan announced the establishment of a general department for national development to determine the strategic directions in economic development and measuring impact.

The group launched a set of programs, including the local content growth program "Musahama," which aims to increase the share of local content spending in PIF's domestic portfolio to 60 percent by the end of 2025.

Rumayyan said in his opening speech at the PIF Private Sector Forum that Crown Prince Mohammad bin Salman bin Abdulaziz is enlisting the private sector and enhancing its role in advancing the country's economy and realizing Vision 2030.

The vision promotes innovation and economic diversification and seeks to increase the private sector's contribution to GDP from 40 percent to 65 percent by 2030.

- Government tenders

In a dialogue session titled "Partnership with the private sector is a strategic pillar in shaping the Kingdom's local economy," Industry and Mineral Resources Minister Bandar al-Khorayef stated that the number of government tenders of the mandatory list applies to 50,000, benefiting over 4,000 national factories.

Khorayef, also the Chairman of the Board of Directors of the Local Content and Government Procurement Authority, noted that the value of the tenders exceeded $106.6 billion since the regulations on preference for local content and local SMEs and companies listed on the Capital Market in business and procurement.

Khorayef stated that the industry in the Kingdom has become very attractive, and local investors are moving towards the sector, indicating that local content is an essential part of the Fund's agenda and enjoys unlimited interest and empowerment.

The Minister pointed out that the private sector has a fundamental role in developing the local content and is a significant and essential partner for the authority.

- Motivating mega companies

For his part, the CEO of the Private Sector Partnership Reinforcement Program (Shareek), Abdulaziz al-Arifi, stated that the program's launch came to make a tangible impact on the investments of national companies and institutions in the local market.

Arifi added that the Kingdom has many regional and global pioneering companies with the ability and desire to grow to serve its goals and the Kingdom's aspirations.

He indicated that Shareek's role lies in providing support and incentives to large companies and enabling them to reach the maximum possible extent of growth within the Kingdom and reach the target of $ 1.3 trillion.

The program works closely with the establishments to study expansion plans and projects and ways to enable them to address challenges that may delay the implementation of these projects and coordinate with various government agencies.

Arifi noted that supporting significant companies to expand, grow, and increase their investments inside the Kingdom will open a larger market for all investors locally, indicating that raising the efficiency and quality of investment will open the way for many opportunities within the value and supply chains.

He discussed forming sectoral supervisory committees to develop investment opportunities and present them to large investing companies.

According to Arifi, there is an excellent integration between the authorities in achieving the vision and keenness to place the private sector as a cornerstone in achieving these goals.

He reiterated the importance of PIF's development of opportunities for national companies, noting that it contributes to their growth and would generate revenues for the Kingdom.

- New sectors

For his part, Deputy Governor and Head of MENA Investments at the PIF, Yazeed al-Humied, stated that one of the main principles of PIF programs is the participation of companies in new sectors, indicating that the Kingdom's economy and its rapid growth is a vast area for promising opportunities.

Humied indicated that after implementing the strategy of the 13 sectors, the private sector found many investment and participation opportunities as a supplier and provider of services to achieve supply chains.

- Local content

During the forum, the Fund launched several initiatives to support and empower the private sector and stimulate local content growth through the Musahama program.

The program aims to increase the share of local content spending in PIF's domestic portfolio to 60 percent by the end of 2025. As part of this program, each PIF company will embed local content considerations in their design decisions and procurement policies.

It also launched another initiative, the "Suppliers Development Program," which will support the development and upskilling of local suppliers and vendors to meet the growing requirements of PIF's portfolio companies.

During 2023, PIF will hold vendor boot camps for the contracting sector to help Tier 2, and Tier 3 contractors prepare their companies to qualify as vendors.

The Private Sector Hub is a dedicated channel to share supplier and investment opportunities with the private sector.

The hub contains more than 100 opportunities and will be continuously enhanced and updated.

Head of the National Development Division at PIF, Jerry Todd, said that the launch of Musahama was a significant step forward in the efforts to drive the growth of local content in the Kingdom.

Both programs would ensure that PIF and its portfolio companies embed local content considerations in the activities and operations, contributing directly towards developing local industries and building long-term supplier and vendor partnerships.

It would strengthen local capabilities, enhance regional players' competitiveness, improve supply chain resilience, and stimulate innovation in the Saudi economy.

- Longterm partnerships

The Fund stressed the success of the long-term partnership with the private sector, urging more companies to participate in reaching the goals of Vision 2030.

Head of MENA Securities Investments at PIF Abdulmajeed al-Hagbani stated that building successful partnerships with the private sector is based on key frameworks.

At the "Building Successful Partnerships between the Public Investment Fund and the Private Sector" panel, Hagbani stated that the partnerships also focus on the additional value that the Fund gives, including governance and follow-up of the private sector through the development of a system of governance and specialized committees.

The second framework is adopting an effective operating model through establishing a shared services center to benefit from institutional communication, finance, legal, and tax affairs expertise and increase human resource efficiency.

It aims to stimulate innovation and business development and provide an infrastructure for all PIF and private companies.

The third framework included establishing a network for the Fund with local and regional partners, international investors, and government agencies to provide new and broad horizons.

For his part, the CEO of Zamil Group, Adib al-Zamil, discussed the experience of the Zamil Holding partnership with the Fund, explaining that long-term investment and mutual trust are among the secrets of the success of such partnerships.

Zamil indicated that the financial revenues might take time. The main goal is to grow with the available human and technical capabilities and benefit from them long-term.

The President and CEO of ACWA Power, Paddy Padmanathan, confirmed that the partnership with PIF gives confidence and credibility to provide and develop new outputs and products on a large scale.

Padmanathan pointed out that the partnership experience enabled the company's rapid growth and attracted huge capital.

He said the partnership also gave ACWA Power additional value and provided the ability to develop products on a large scale, with greater opportunities for joint investments.

- Memoranda of Understanding

During the forum, the Public Investment Fund signed four memorandums of understanding (MoU) with several entities and agencies to enhance cooperation through many initiatives to empower the local private sector in strategic sectors in the Kingdom.

The memorandums of understanding were signed on the sidelines of the inaugural PIF Private Sector Forum in Riyadh.

The Fund signed the first memorandum with the Local Content and Government Procurement Authority to develop local content in the national economy by cooperating in developing the programs and strategies and offering local content opportunities in the sovereign Fund's strategic sectors.

PIF signed an MoU with the Building Technology Stimulus Initiative under the Ministry of Municipal, Rural Affairs, and Housing to explore opportunities for developing modern construction methods and related technologies to serve the future direction of the housing and construction sectors in the Kingdom.

The third MOU was agreed upon with the Saudi Contractors Authority to follow through on the objectives of the PIF real estate schemes by cultivating the Kingdom's local contracting sector.

The Fund concluded the fourth agreement with the Federation of Saudi Chambers to define cooperation, activate the role of the private sector in projects and investments and increase local content based on the part of the Federation as an umbrella for the business sector and chambers of commerce in the Kingdom.

Top economic officials from the United States and China are set to renew negotiations Monday -- with an extension of lower tariff levels on the cards -- as President Donald Trump's trade policy enters a critical week.

Talks between the world's top two economies are slated to happen over two days in the Swedish capital Stockholm, and they come as other countries are also rushing to finalize deals with Washington.

For dozens of trading partners, failing to strike an agreement in the coming days means they could face significant tariff hikes on exports to the United States come Friday, August 1.

The steeper rates, threatened against partners like Brazil and India, would raise the duties their products face from a "baseline" of 10 percent now to levels up to 50 percent.

Tariffs imposed by the Trump administration have already effectively raised duties on US imports to levels not seen since the 1930s, according to data from The Budget Lab research center at Yale University.

For now, all eyes are on discussions between Washington and Beijing as a delegation including US Treasury Secretary Scott Bessent meets a Chinese team led by Vice Premier He Lifeng in Sweden.

While both countries in April imposed tariffs on each other's products that reached triple-digit levels, US duties this year have temporarily been lowered to 30 percent and China's countermeasures slashed to 10 percent.

But the 90-day truce, instituted after talks in Geneva in May, is set to expire on August 12.

Since the Geneva meeting, the two sides have convened in London to iron out disagreements.

China progress?

"There seems to have been a fairly significant shift in (US) administration thinking on China since particularly the London talks," said Emily Benson, head of strategy at Minerva Technology Futures.

"The mood now is much more focused on what's possible to achieve, on warming relations where possible and restraining any factors that could increase tensions," she told AFP.

Talks with China have not produced a deal but Benson said both countries have made progress, with certain rare earth and semiconductor flows restarting.

"Secretary Bessent has also signaled that he thinks a concrete outcome will be to delay the 90-day tariff pause," she said. "That's also promising, because it indicates that something potentially more substantive is on the horizon."

The South China Morning Post, citing sources on both sides, reported Sunday that Washington and Beijing are expected to extend their tariff pause by another 90 days.

Trump has announced pacts so far with the European Union, Britain, Vietnam, Japan, Indonesia and the Philippines, although details have been sparse.

An extension of the US-China deal to keep tariffs at reduced levels "would show that both sides see value in continuing talks", said Thibault Denamiel, a fellow at the Centre for Strategic and International Studies.

US-China Business Council President Sean Stein said the market is not anticipating a detailed readout from Stockholm: "What's more important is the atmosphere coming out."

"The business community is optimistic that the two presidents will meet later this year, hopefully in Beijing," he told AFP. "It's clear that on both sides, the final decision-maker is going to be the president."

Sweden's Prime Minister Ulf Kristersson said both countries' willingness to meet was a "positive development".

Far from ideal

For others, the prospect of higher US tariffs and few details from fresh trade deals mark "a far cry from the ideal scenario", said Denamiel.

But they show some progress, particularly with partners Washington has signaled are on its priority list like the EU, Japan, the Philippines and South Korea.

The EU unveiled a pact with Washington on Sunday while Seoul is rushing to strike an agreement, after Japan and the Philippines already reached the outlines of deals.

Breakthroughs have been patchy since Washington promised a flurry of agreements after unveiling, and then swiftly postponing, tariff hikes targeting dozens of economies in April.

Denamiel warned of overlooking countries that fall outside Washington's priority list.

Solid partnerships are needed, he said, if Washington wants to diversify supply chains, enforce advanced technology controls, and tackle excess Chinese capacity.

Saudi PIF to Inject $266 Bn into New Projects