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Aramco and its subsidiary SABIC will spearhead a $1.3-trillion private investment drive in Saudi Arabia to diversify its economy away from oil, the Kingdom's Crown Prince, Mohammed, announced at a virtual conference.
"Building a vibrant and prosperous private sector is one of the national priorities for the Kingdom and that is why we are today inaugurating a new and more powerful era in terms of cooperation and partnership between the government and private sector.," Mohammed said.
"The Shareek program we are announcing will strengthen the partnership with the private sector and has the objective of supporting local companies and enabling them to unlock new local investments valued at SAR 5 Trillion through the end of 2030."
This amount is equal to roughly $1.3 trillion, and its unlocking will be enabled by investments from Saudi Arabia's largest private companies, the Kingdom's Public Investment Fund, and a National Investment Strategy, for which the details have yet to be released. The total investment poured into Saudi Arabia's private sector will amount to some $3.20 trillion (12 trillion riyals).
On top of this, the Saudi government will spend another $2.67 trillion (10 trillion riyals) over the next decade. It will also add to that an estimated consumer spending level of another 5 trillion riyals or $1.3 trillion.
"The total across all these sources reaches 27 Trillion Riyals, or $7 Trillion US Dollars over the next ten years," the Crown Prince said.
"The importance of the Shareek program is not limited to enhancing the private sector's role in the sustainable growth of the national economy. We see it as a long-term investment in the Kingdom's future and prosperity, based on stronger collaboration between the public and private sectors," he added.
Saudi Arabia has been trying to diversify its economy away from oil for years now, with little success so far, because of unfavorable fluctuations in the price of oil, on which its diversification plan is built as most of the money for all its ambitious projects have nowhere else to come from but oil export revenues.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.