The PIF Effect: Pioneering investments send ripples of real impact through Saudi Arabia and the world

Sovereign wealth funds benefit a nation’s economy and citizens through investments designed for optimal, lasting results.

 

PIF – one of the world’s largest, most influential SWFs – designs them to achieve cascading benefits for Saudi Arabia and the world. “The PIF Effect” delivers on immediate, economic and human levels to innovate and speed positive impacts.

 

This approach is fast helping transform the Saudi economy and society in line with Vision 2030, the national blueprint to diversify the economy and create prosperity at home and beyond.

 

As a Vision 2030 driver, PIF identified 13 strategic sectors based on market attractiveness, size, potential, and competitive advantage. These future-oriented industries receive significant capital over a long-term horizon to act as investment cornerstones and crowd-in the private sector.

 

These sectors – which include automotive and mobility, utilities and renewables, and aviation, among others – highlight the advantages of people-oriented funding, beyond immediate results such as inviting further investment.

 

Driving Innovation: The Automotive Sector

Cars symbolize modern life. But more than freedom and convenience, the automotive industry – one of the world’s big GDP multipliers – represents economic growth, technology and jobs. The impetus for building Saudi Arabia’s auto industry from the ground up also spans the energy transition, future transport and sustainability. A case in point: Ceer, the country’s first car brand, locally developed and manufactured in collaboration with respected international partners, which seizes disruption, including electrification and autonomous driving. The joint venture between PIF and Foxconn is expected to create 30,000 direct and indirect jobs, including advanced manufacturing, while attracting more than $150 million in foreign direct investment. Ceer is also projected to add $8 billion directly to Saudi Arabia’s GDP by 2034.

 

^{_{PIF is an investor in U.S. luxury EV maker Lucid Group.}}

Sustainability also factors in, as Ceer’s battery electric vehicles will align with net zero targets, use less energy and generate less waste. Future “effect” prospects include battery storage technology that supports Saudi Arabia’s growing renewables and utilities sector and builds manufacturing with innovative materials and market-ready products for spill-over to other industries. Similarly, PIF’s investment in luxury EV company Lucid Group is boosting the sector with Lucid opening its first international manufacturing plant in Saudi Arabia in 2023, which has started to grow the local supply chain and promote workforce development through jobs and training programs.

 

Other automotive initiatives are building the supply-chain ecosystem. PIF’s joint venture with Pirelli to make high-quality tires in Saudi Arabia under the Pirelli name will also manufacture and market tires under a new local brand, and a JV with Hyundai will produce 50,000 EVs and internal combustion engine cars per year at a $500 million manufacturing plant. Companies created by PIF are supporting the design-and-manufacture environment, such as TASARU, which will bring logistical and supplier efficiencies, and the Electric Vehicle Infrastructure Company (EVIQ), creating a nationwide network of fast-charging hubs for EVs.

 

Clean Energy: Utilities and Renewables

Economic growth – and the modern living it enables – depend on ample energy. In line with its mandate to develop 70% of Saudi Arabia’s renewable energy capacity for a 50% renewables mix by 2030, PIF is focused on clean electricity from solar and wind, innovative desalination and green hydrogen to help build energy security and promote large-scale development for a sector that saw job numbers almost double worldwide between 2012 and 2022. Reliable, affordable, clean energy is especially important for Saudi Arabia’s rapid industrial growth, as well as the sustainability agenda. The plan includes projects to help develop sectors like manufacturing, as well as generate affordable renewables for export.

 

^{_{Sudair Solar PV, one of the largest single-contracted solar PV plants in the world.}}

 

The PIF-backed ACWA Power, an international developer, investor and operator of power generation and desalination plants, is a leader in reliably and affordably delivering these commodities for economic and social growth.

 

In partnership with the PIF-owned Water and Electricity Holding Company (Badeel) and integrated energy and chemicals company Saudi Aramco, ACWA Power is building PV plants to convert sunlight directly into electricity. Haden, Muwayh and Al Khushaybi, valued at $3.3 billion, will add to the existing Ar Rass 2, Sudair, Shuaibah 2, Saad 2 and Al-Kahfah plants, with the eight projects together delivering 13.6 GW of solar power.  Sudair, one of the world’s largest single-contract PV plants, has recorded the world’s second-lowest cost for solar PV electricity production, and will offset emissions by 2.9 million tons annually.

 

^{_{Shebara, the first luxury resort owned and operated by Red Sea Global, is powered entirely by an on-site solar farm.}}

 

PIF’s signature approach to synergies across its investment pools is also speeding renewables. The PIF-owned Red Sea Global is pioneering projects that include luxury tourism destination The Red Sea, which has three resorts open and will operate a total of 50 hotels by 2030 – all powered by solar energy. In a Build Own Operate Transfer (BOOT) consortium led by ACWA Power, five solar stations were built during The Red Sea’s first phase, and 760,000 solar panels were installed last year to support the giga-project’s infrastructure. The BOOT project includes one of the world’s largest battery storage facilities (around 1,300 MWh) to ensure the entire site is continuously powered by renewables. Notably, RSG and Zain KSA telecom provider launched the world’s first zero-carbon, solar-powered 5G wireless technology network in 2023.

 

Sky’s the Limit: Aviation

Building on Saudi Arabia’s achievement of welcoming more than 100 million tourists in 2023, the country’s aviation sector is climbing to new heights.

 

Travel, logistics and connectivity come together in PIF’s ecosystem that spans general aviation, commercial airlines and services.

 

The new King Salman International Airport, expected to be one of the world’s largest, will enhance the flying experience for a targeted 120 million travelers by 2030. It will be home to the new PIF-owned flagship carrier Riyadh Air, which will leverage the country’s location at the crossroads of Asia, Africa and Europe as a global gateway for tourism, transportation and trade.

 

The airport will serve PIF companies’ luxury resorts that are opening up pristine beaches and heritage sites unseen by much of the world, whetting global appetites for regenerative tourism and culturally experiential travel.

 

In a milestone signing in advance of its 2025 launch, Riyadh Air announced at the Future Investment Initiative  8th edition conference in late October that it will order 60 next-generation Airbus A321 aircraft, a multi-billion-dollar deal that will optimize the fleet and support sustainability with one of the industry’s most fuel-efficient aircraft. Additionally, the order will aid in establishing Riyadh as a major strategic global aviation hub.

 

^{_{The Helicopter Company provides commercial services ranging from emergency medical transport to corporate and tourism travel.}}

 

Businesses created along the value chain include The Helicopter Company, the first commercial helicopter company in Saudi Arabia, providing emergency medical services, aerial works, tourism and private charters; AviLease, a rising global aircraft lessor which owns and manages the latest technology, fuel-efficient aircraft; and an investment in Saudia Technic, for aircraft maintenance, repair and overhaul.

 

The Multiplier Effect

Unlocking industries to stimulate economic transformation at home and help shape the global economy creates a multiplier effect.

 

PIF has approximately $925 billion in assets under management, has formed 99 new portfolio companies, and created more than 1.1 million direct and indirect jobs at home and globally.

 

New and emerging industries are positioned to “future-proof” growth by catalyzing and sustaining disruptive innovation at every level. Infrastructure and local content are enabling private-sector growth, strengthening value chains and resilience. Stewardship is setting standards in clean energy and resource efficiency, addressing climate change and boosting access to affordable energy exports.

 

And partnerships are driving investment, creating mutual advantage in economic growth, workforce development, and technology exchange. PIF is the investment engine driving transformation for Saudi Arabia and the world. This commitment to creating impact and opportunity at scale across geographies, industries and sectors is delivering a cascade of powerful and lasting immediate, economic and human results – for prosperity throughout the country, and around the world.