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.
“We see a lot of young entrepreneurs putting business plans together. I think this is a very important growth sector in the future. It’s also one that’s going to contribute greatly to the social capital and cultural capital that the Kingdom creates and ultimately exports,” he continued.
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 that did not previously exist.
“We have to get them up and running,” Todd said, adding that the private sector in the Kingdom is highly skilled and capable.
He added: “They can mobilize capital. They, in many cases, bring both capital and operating capacity and operating capabilities to bear.”
Todd explained that due to the private sector’s high capabilities, it will benefit significantly from Saudi Arabia’s Vision 2030.
Stressing the significant role of the PIF as a hedger to the local economy, he said these funds serve as a financial cushion.
The saved funds are meant to help the country navigate and overcome economic difficulties and can support government spending, stabilize financial markets and stimulate economic recovery.
“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.,” Todd explained.
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.”