BlackRock and Saudi Arabia’s sovereign wealth fund have signed an agreement to jointly explore infrastructure projects in the Middle East, focused on Saudi Arabia.
The Saudi Public Investment Fund (PIF) manages more than $600 billion in assets.
PIF said the non-binding memorandum of understanding with BlackRock will serve as the anchor for BlackRock’s Middle East infrastructure strategy. It added that the world’s biggest fund manager plans to build a dedicated infrastructure investment team in Riyadh.
Industries to be targeted include energy, utilities, transport, and telecoms.
The two companies plan to work together to attract regional and international investors to participate in projects.
The announcement comes as a part of Vision 2030, a program introduced by Crown Prince Mohammed Bin Salman to diversify the Saudi economy away from oil revenues and lure in more foreign investments to establish new sectors and create jobs.
PIF aims to grow its assets under management to more than $1 trillion by 2025.
Last year in October, Saudi Arabia launched a national infrastructure fund to support up to $53 billion in projects over the next decade. It was advised by BlackRock, which set up an office in Riyadh in 2019 to capitalize on the kingdom’s reform agenda.
A BlackRock spokesperson said the MoU is a new initiative, separate from the National Infrastructure Fund that was launched under the kingdom’s National Development Fund. BlackRock had $7.96 trillion in assets under management at end-September.
Last year the company led a consortium to buy a $15.5 billion stake in Saudi Aramco’s gas pipelines company. It had taken a stake in Abu Dhabi energy company ADNOC’s pipeline assets a couple of years earlier.
“It further cements PIF’s partnership with BlackRock and allows both parties to explore opportunities in Saudi Arabia and across the Middle East, in line with PIF’s strategy to expand its local and regional investment portfolio,” a statement announcing the MoU said.