Riyadh commits $20bn to US-managed development fund

The kingdom’s Public Investment Fund [PIF] said the pledge, which covers half of the capital, has already been paid since the announcement in May, though denied claims it had signed up to a new $50bn Blackstone fund.

The fund will invest in “conventional economy” including sectors such as medical care and education, Yasir al-Rumayyan said at a major investment conference in the capital Riyadh.

It is part of "Vision 2030", a broad programme of reforms launched by Crown Prince Mohammed bin Salman last year and aimed at diversifying the kingdom's oil-dependent economy and expanding PIF to finance development projects in the country.

Saudi Arabia has lost more than half of its oil revenues because of the slump in crude prices that started in mid-2014.

It has posted budget deficits over the past three fiscal years and is headed for another year in the red in 2017.

To counter sustained low oil prices, Riyadh has increased fuel and power costs, raised excise tax on tobacco and energy and soft drinks and is preparing to impose five-percent value-added tax (VAT) in 2018.

The world's top oil exporter is also battling a high unemployment rate of 12.8 percent among its citizens, a majority of them women.

But al-Rumayyan said PIF expects to create over 20,000 jobs by 2020 through its projects.

“With our short term plans, we will have more than 20,000 jobs in 2020 and beyond it’s going to be a lot more.”

PIF has a portfolio made up of listed holdings, but also unlisted equity investments, international investments, real estate, loans, bonds and sukuk.