BlackRock Partners with Saudi Arabia Infrastructure Fund

Saudi Arabia hired BlackRock to help establish and manage an infrastructure fund that has an investment goal of $ 53 billion in the kingdom over the next decade.

The US asset manager is partnering with the Saudi Arabia National Development Fund, a state entity chaired by Crown Prince Mohammed bin Salman, to operate the infrastructure fund over a period of several years.

The National Infrastructure Fund (NIF) will seek to invest in sectors including energy, water, transport, telecommunications, education and health as part of Prince Mohammed’s ambitious goal of modernizing the conservative kingdom.

The crown prince also seeks to position Saudi Arabia as a regional economic center, but needs to improve its infrastructure as part of his efforts to attract more foreign direct investment and provide better services.

BlackRock, which invests in infrastructure around the world, has not committed to investing in the NIF, which will be financed by its parent, the National Development Fund. But the asset manager could invest in future projects, as Riyadh seeks to attract domestic and foreign investors and establish public-private partnerships.

“This is a long-term partnership to build and operate a world-class development finance institution,” said Yazeed Almubarak, director of BlackRock Saudi Arabia. “It will involve hiring and bringing the expertise of our global network of offices and teams to carry out this partnership.”

BlackRock is the world’s largest fund manager and its assets under management exceeded $ 9 trillion in the first half of this year. He opened an office in Riyadh in 2019, seeking to take advantage of Prince Mohammed’s economic reform plans. It already manages funds for the Public Investment Fund, the kingdom’s $ 450 billion sovereign wealth fund, which is also chaired by the crown prince.

Stephen Groff, governor of the National Development Fund, described the kingdom’s infrastructure needs as “vast,” with the NIF tasked with building new hospitals, educational facilities, transportation networks and logistics capacity.

“We will be able to accept risks that others cannot help attract the private sector to these deals,” Groff said. “We will continue the partnership [with BlackRock] whenever necessary to ensure that the fund is built on a solid foundation. “

The National Development Fund was created in October 2017 to oversee state development funds. It manages more than 80,000 million dollars in assets.

Prince Mohammed has announced several major projects across the kingdom and pledged to invest hundreds of billions of dollars over the next decade as part of his plans to diversify the oil-dependent economy.

The development fund has been designated as one of the key institutions to support domestic projects and will be one of the main recipients of the surplus petrodollars accumulated by the world’s leading oil exporter.