Saudi Arabia is preparing to cement ties with President Donald Trump by committing to unprecedented investments in the US.
The kingdom’s sovereign wealth fund is set to announce plans to deploy as much as $40 billion into US infrastructure, according to people familiar with the matter. The investment may be unveiled as early as next week to coincide with Trump’s visit to the kingdom, said the people, asking not to be identified as the information is private. No final decisions have been made and the announcement may still be delayed, they said.
Saudi Arabia is eager to reset relations with the new US administration after feeling shunned by President Barack Obama, who crafted the 2015 nuclear deal with their Shiite rival Iran.
The kingdom claimed a “historic turning point” in bilateral relations after President Trump met Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman in the White House earlier this year. On May 19, Trump will make his first foreign trip since taking office, visiting Saudi Arabia and Jerusalem before heading to Europe.
A White House official, speaking on condition of anonymity, confirmed that the plans were in the works and that Trump’s son-in-law and senior adviser, Jared Kushner, had played a critical role in the discussions. A representative for Saudi Arabia’s Public Investment Fund declined to comment. The Ministry of Finance didn’t immediately respond to requests for comment.
Trump in March offered his support for developing a new US-Saudi program in energy, industry, infrastructure and technology that could be valued at more than $200 billion in direct and indirect investments within the next four years, according to the White House.
The president has said he intends to push for $1 trillion in US infrastructure investments over the next decade, with $200 billion coming from taxpayers and the rest from the private sector.
Saudi Arabia is planning to expand its sovereign wealth fund into the world’s largest as part of its attempts to diversify away from oil after prices slumped. The kingdom will transfer ownership of Saudi Arabian Oil Co to the PIF, as well as the proceeds from the oil company’s initial public offering. The fund could eventually control more than $2 trillion, Bin Salman has said.
By 2020 the PIF will use half the assets not tied up in Saudi Aramco to invest abroad, up from 5 percent currently. Since last year, the PIF has funneled about $50 billion of the kingdom’s reserves into investments abroad, almost all of it into technology.
It has said it will commit as much as $45 billion to partner with SoftBank Group Corp to set up a new $100 billion vehicle to invest in global technology. The fund also invested $3.5 billion in Uber Technologies Inc last June.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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