Vietnam courts Saudi investment funds to boost infrastructure

October 20, 2023 | 14:49
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Vietnam is pursuing concessional loans from Saudi Arabian sovereign investment funds, with a focus on enhancing transportation and urban infrastructure. It aims to secure support from the Saudi Fund for Development (SFD) and the Public Investment Fund (PIF).
Vietnam courts Saudi investment funds to boost infrastructure

During his meetings with senior officials from the SFD and the PIF, both of which have committed $325 million in concessional loans for various direct and indirect investment ventures in Vietnam, Prime Minister Pham Minh Chinh praised the positive impact these loans have had on the country's infrastructure, especially in remote areas.

PM Chinh emphasised, "Vietnam is currently pursuing three strategic breakthroughs, one of which is in transportation infrastructure, including railways and highways."

To fulfill these ambitious infrastructure goals, the country requires significant resources and, consequently, he urged Saltun Al-Marshad, the CEO of SFD, to increase funding and adjust the lending terms more favourably for Vietnam.

In a separate meeting with Yasir Al-Rumayyan, governor of the PIF, PM Chinh encouraged diversification in direct and indirect investments in Vietnam, "Particularly in the country's priority areas such as transportation infrastructure, railway systems, regional connectivity, urban development, and climate change mitigation in the Mekong Delta region."

Vietnam is currently undertaking an extensive project to upgrade and expand its railway system, with plans to develop a high-speed railway connecting the North and South.

Meanwhile, the leaders of both the SFD and PIF have expressed their commitment to allocating more resources to projects in Vietnam in the future.

The SFD was established as a governmental institution to provide support in the form of soft loans to finance development projects in developing countries.

As a member of the international development community, SFD has been supporting less developed countries to overcome the challenges that they are facing by financing critical projects. Such programmes contribute to the economic and social growth in those nations and improve the standard of living for their people.

The Saudi Arabian PIF, founded in 1971, is responsible for establishing and managing companies that operate in key sectors of the economy. With an estimated capital of $620 billion, the PIF ranks among the world's 10 largest sovereign wealth funds.

The PIF is also the agency responsible for investing in and overseeing mega-projects in Saudi Arabia, such as the Red Sea Development Project and the NEOM smart city project. It holds stakes in several major corporations, including Softbank, Uber, and Blackstone.

It boasts a diverse portfolio made up of a significant number of investments, of which around 20 are listed on the Tadawul – the Saudi Stock Exchange. The fund is building an investment portfolio that is diversified and risk-adjusted across sectors, geographies, and assets classes.

PM Chinh's visit to Saudi Arabia includes his participation in the inaugural ASEAN-GCC High-Level Conference, held from October 18 to 20. This event marks the first meeting between ASEAN and the Gulf Cooperation Council in 33 years of diplomatic relations, and the leaders are expected to issue a joint statement following the conclusion of the conference.

Saudi Arabia is one of Vietnam's key economic partners in the Middle East. In 2022, the two countries achieved a bilateral trade turnover of $2.7 billion, and have witnessed over $2 billion during the first nine months of this year.

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By Nhat Minh

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