In this photo released by Saudi Press Agency, SPA, Saudi Crown Prince Mohammed bin Salman and the others attend the opening ceremony of Future Investment Initiative Conference in Riyadh, Saudi Arabia, Tuesday, Oct. 24, 2017. Saudi Arabia's Crown Prince defended his bold reform plans, including the kingdom's decision to lift the ban on women driving, saying that "we were not like this in the past." (Saudi Press Agency via AP)

INTERNATIONAL - Saudi Arabia’s main sovereign wealth fund wants to increase its financial clout to 1.5 trillion riyals (R5.5 trillion) by 2020 as part of the kingdom's efforts to boost private-sector growth and wean itself off oil exports.

The assets-under-management goal, laid out by the Public Investment Fund (PIF) yesterday, came on the second day of an international conference in Riyadh. It was accompanied by the publication of PIF’s first comprehensive business programme, outlining targets for investments and returns for 2018-2020.

PIF, which is expected to receive proceeds from the planned sale of 5 percent of state oil company Saudi Aramco’s (IPO-ARMO.SE) shares, currently has around $230 billion worth of assets under management.

It plans to create 20000 direct domestic jobs, and 256000 construction jobs by 2020. This will increase PIF’s contribution to Saudi Arabia’s gross domestic product from 4.4percent to 6.3percent, it said in a statement yesterday.

Investments will be in sectors such as real estate and infrastructure as well as in new areas of activity in the Saudi economy through the establishment of companies such as the Saudi Arabian Military Industries company and the Saudi Real Estate Refinancing Company.

Delivery

One of the biggest tasks facing PIF will be the delivery of a $500billion plan to build a business and industrial zone extending into Jordan and Egypt, announced at the start of the conference on Tuesday.

PIF also set a new target to increase total shareholder return to 4-5percent between now and 2020 from 3percent, it said yesterday.

“The PIF programme represents a vital milestone as we work towards realising Vision 2030,” said Crown Prince Mohammad bin Salman Al-Saud, the economic reform plan’s architect.

The 96-page programme said PIF will structure its investments in six areas: Saudi equity holdings, sector development, real estate and infrastructure, mega projects, international strategic investments and a “diversified pool” across global asset classes.

It said “long-term” average annual return from these areas would be between 6.5 and 9percent.

PIF managing director Yasir Al Rumayyan said the fund was open to investing in more big ticket items such as US ride services company Uber. 

- REUTERS