Saudi to create mega funds to attract foreign investment: report

Saudi Arabia is planning to create two investment funds worth over $18 billion in an effort to set up joint ventures with foreign companies, Wall Street Journal reported, citing people familiar with the matter.

The move follows Crown Prince Mohammed bin Salman’s plans for an economic makeover after foreign investment dropped to a 14-year-low last year.

The government is in the final stages of creating a SAR 50 billion ($13.3 billion) "International Partnership Fund", which will run by the Saudi Industrial Development Fund, the report said.

Separately, the Saudi Arabian General Investment Authority (SAGIA) is proposing to create a $5 billion investment fund to enter partnerships with foreign companies.

The notion behind the fund, yet to be formally approved, is that the government will take "some of the risk for foreign companies entering the Saudi market."

Additionally, the Saudi government is investing billions into entertainment-industry partnerships and working with SoftBank Group’s Vision Fund to bring technology firms to the Kingdom.

Last month, United Nations data showed direct foreign investment into the Kingdom fell to $1.4 billion in 2017 from $7.4 billion in 2016. This is in comparison with an average $18.2 billion received annually in the years leading up to the global financial crisis in 2007-2008.