Saudi Arabia signs $50 billion MoU with Chinese financial institutions

Saudi Arabia’s Public Investment Fund (PIF), one of the world’s largest sovereign wealth funds, has signed six memorandums of understanding worth up to $50 billion with several Chinese financial institutions.

These memorandums were signed with the Agricultural Bank of China (ABC), the Bank of China (BoC), the China Construction Bank (CCB), the China Export & Credit Insurance Corporation (SINOSURE), the Export-Import Bank of China (CEXIM) and the Industrial and Commercial Bank of China (ICBC). The information was released by the FIP through a statement published on its website on Thursday.

The MoUs cover various areas of cooperation, including the promotion of two-way capital flows, both through debt and equity. These initiatives are in line with the FIP’s strategy of promoting institutional partnerships at a global level. In the brief note, the Saudi sovereign fund highlighted the importance of these agreements in its strategy of international expansion and cooperation.

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Fahad Al Saif, Head of FIP Global Equity Finance and Investment Strategy and Economic Outlook, commented that these MoUs demonstrate FIP’s strong and deep relationships with the world’s leading financial institutions. He also underlined the fund’s commitment to strengthening its partnerships on a global scale, which is crucial to its investment and growth strategy.

Last month, the FIP signed further agreements with three Chinese renewable energy companies. These agreements aim to create joint ventures to set up factories in Saudi Arabia, with the intention of turning the country into a global hub for the export of renewable technologies.

The FIP is the Saudi Arabian state’s investment and savings fund. Its considerable fortune comes from oil, a resource in which the Saudis are one of the world’s great powers. However, in recent years, the fund has decided to diversify its investments in response to the future obsolescence of this energy source. This diversification strategy seeks to ensure the country’s long-term economic sustainability by promoting investments in emerging sectors and innovative technologies.