Saudi Arabia has long been working to diversify its economy in order to lead the economic and technological expansion that lies ahead in the Middle East. Riyadh has undoubtedly become the country that is working hardest along these lines, as represented by the ambitious Vision 2030 project. In order to achieve the progress that this would bring, the Saudis have signed a memorandum of understanding with the US investment management company - considered the largest in the sector internationally and manager of more than $10 trillion in assets - BlackRock.
The partnership is focused on infrastructure development, with the aim of attracting major regional and international investors. Saudi Arabia has been working for some time to attract foreign investors to the country in order to promote direct investment in Arabia, participation in the projects that are being developed and, in this way, add value to the national economy. It is in this context that BlackRock, after signing a non-binding agreement with the Public Investment Fund, will become the foundation on which to build the Middle East's infrastructure strategy.
The official Saudi press agency has issued a statement saying that this alliance "intends to form a team specialised in infrastructure investments in Riyadh". The sectors on which this project focuses are very diverse and range from energy to transport, utilities, water, environment, communications and social infrastructure. In addition to foreign investment, it also seeks to enhance local investment by facilitating the participation of the Saudi Arabian private sector.
Although BlackRock's intention is to expand investments throughout the Middle East, the New York-based multinational's first steps are focused on the Saudi market. In fact, to support this initiative, the Americans will assign an independent team dedicated to investing in infrastructure in the Saudi capital. Unsurprisingly, the leadership of Crown Prince Mohammed bin Salman has been key to a project that aims to increase the sovereign wealth fund's assets under management to over $1 trillion - currently at $600 billion - by 2025.
Vision 2030 marks the line followed by Saudi Arabia, which aims to reduce dependence on the oil industry, create new sectors and stimulate job creation. Already in October last year, Riyadh launched a National Infrastructure Fund to support projects worth around 200 billion rials - $53 billion - over the next ten years. A project in which BlackRock, whose presence in the capital has been a reality since 2019, when it set up an office in Riyadh, was already involved.
Although these moves are not the only ones linking the US company to the Saudi market. Also in 2019, it acquired a stake in the pipeline assets of ADNOC Energy, which is headquartered in Abu Dhabi. In addition, last year, Black Rock led a coalition that also bought a stake valued at $15.5bn in Saudi Aramco. The new memorandum signed with the Public Investment Fund demonstrates that the long-standing financial ties could not be more mutually beneficial, and it is expected that the BlackRock-Arabia partnership will not stop there.
Also on the horizon is one of Riyadh's most ambitious initiatives, represented by the sustainable and futuristic city called 'The Line', which will be part of the artificial intelligence-based city that will host the Asian Winter Games in 2029, called NEOM. The city, which "unlike traditional cities, will prioritise people's health and well-being over transport and infrastructure", will run on 100% renewable energy and will have 95 % of its space reserved for nature.
'The Line' project, which is also part of the Vision 2030 framework, will stretch across the northwest of the country and will be 200 metres wide, 500 metres high and 170 kilometres long. The aim of this initiative presented in 2021 is to accommodate around nine million people. Some of the peculiarities of this futuristic project are that there will be no roads, cars or carbon emissions. For transport, there will be a high-speed train to which all residents will have access.