Saudi Arabia’s PIF designates Diriyah as fifth giga-project

Project seeks to align with the sovereign wealth fund's strategy to unlock the capabilities of promising sectors, including tourism and culture

An 18th-century palace built from mud and straw in the historic district of Diriyah on the outskirts of the Saudi capital Riyadh. AFP

Saudi Arabia’s Public Investment Fund (PIF) has designated Diriyah as its fifth giga-project after the Neom, Red Sea, Qiddiya and Roshn developments.

The kingdom’s Crown Prince, Mohammed bin Salman, who is also chairman of the sovereign wealth fund, made the designation on Monday. It reflects Diriyah’s status as a unique destination with distinctive cultural, historical and tourism landmarks, the PIF said in a statement.

The project aims to showcase Saudi Arabia's history.

Diriyah is a globally significant destination that includes the Turaif district, a Unesco World Heritage Site.

“These cultural and historical aspects position Diriyah as an unrivalled destination of global significance where the authenticity of Saudi heritage can be celebrated, revealing the historic origins of modern Saudi Arabia,” the statement said.

Tourists will have the opportunity to explore and get to know Saudi Arabia’s history and culture at the city’s museums and purpose-built pavilions.

“The Diriyah project aligns with PIF’s strategy to focus on unlocking the capabilities of promising sectors, including the tourism and culture sectors, to support Saudi Arabia’s position regionally and internationally as a leading tourism and cultural destination,” the statement said.

The PIF, which manages more than $620 billion in assets, is at the heart of the Saudi Vision 2030 initiative that aims to diversify the kingdom’s economy and reduce its reliance on hydrocarbons.

The sovereign wealth fund, which invests on behalf of the government in domestic and international markets, is mandated to pump $40 billion to $50 billion into the local economy to generate jobs and boost the non-oil economic base of the kingdom.

The PIF has stakes in global businesses, including ride-hailing company Uber, and is a cornerstone investor in SoftBank’s vision fund that invests in global technology companies.

The fund has created 10 new sectors, set up more than 30 new companies, created 331,000 jobs in Saudi Arabia and more than tripled its assets in the past few years.

Under its five-year plan, it will focus on 13 sectors as part of its core domestic strategy.

In October, the PIF said it plans to invest 90 billion Saudi riyals ($24 billion) in the broader Middle East and North Africa region to expand its portfolio of assets and boost regional economies.

It also increased the size of its investments in Meta, the parent company of Facebook and Instagram, as well as Google parent Alphabet in the third quarter.

The fund bought new stakes in Linde, the world's largest industrial gas company by market share and revenue, and blank cheque company Compute Health during the same period.

The fund's largest investment remains in electric car company Lucid, which was worth about $14.2 billion at the end of the third quarter last year.

Giga-projects form a key pillar of the PIF’s overall strategy, as they are instrumental in creating new economic ecosystems and launching new sectors that drive growth and diversification in Saudi Arabia, as well as creating investment opportunities across multiple sectors, the statement said.

In addition to Diriyah, the PIF’s giga-projects portfolio currently includes Neom, the $500 billion smart city in the north-western part of the kingdom; Red Sea, which is set in a 28,000-square-kilometre area that includes an archipelago of 92 islands, 50 dormant volcanoes, mountain ranges and sand dunes; Qiddiya, a massive entertainment, sports and arts destination located outside Riyadh; and Roshn, a master developer mandated to make long-term investments across Saudi Arabia by developing residential communities.

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The Diriyah project is expected to enable many strategic domestic sectors, create partnerships with the local private sector and unlock many new investment opportunities throughout its development and production phases in areas such as construction, the operation and management of hotels, retail, entertainment and cultural facilities.

Through this project, the PIF expects to create thousands of new job opportunities and provide a series of initiatives designed to contribute to enriching the quality of life for residents and visitors.

Established by Royal Order in 2017, the Diriyah Gate Development Authority will continue its regulatory and supervisory role in maintaining the heritage and history of Diriyah.

The authority will also continue serving the Diriyah community, while providing full support to establish the project as one of the world’s most prominent tourist destinations, the statement said.