Saudi wealth fund suffers $8bn writedown on ‘giga-projects'
The Public Investment Fund (PIF) valued the projects at 211 billion riyal — about $56 billion — as of the end of 2024, more than 12 per cent lower than the 241 billion riyal valuation given to the projects in 2023.
The writedowns come as many of the projects have faced delays and cost overruns and have reportedly been scaled back amid declining oil prices.
• Fifa World Cup 2034: Saudi Arabia's plans for 11 new futuristic stadiums
Neom, which includes a resort being built on the Red Sea coast, has faced repeated delays as the kingdom has prioritised other infrastructure projects. Ambitions for the project were scaled back last year, with at least one contractor laying off workers as the priority shifted from completing segments of The Line, the planned 170km linear city.
Saudi Arabia had said The Line was initially meant to be launched in 2026, though the deadline appears increasingly unlikely. The country is also hosting a number of major sporting events in the coming years, including the 2034 Fifa World Cup.
'A more targeted investment programme and with longer timelines is actually positive given the weaker oil revenue backdrop and the large hosting event that Saudi Arabia has won,' Monica Malik, chief economist at Abu Dhabi Commercial Bank, said. 'These were won after Vision 2030 was designed and will need significant investment.'
Nonetheless, the Vision 2030 giga-projects remain an important part of Crown Prince Mohammed bin Salman's plans to reduce the country's reliance on oil revenue.
Neom is part of Vision 2030, Crown Prince Mohammed bin Salman's attempt to pivot Saudi away from reliance on oil revenue
@DISCOVERNEOM
PIF disclosed the writedowns in its 2024 annual report, which showed that gross assets under management rose by 19 per cent year-on-year to $913 billion.
More than a third of PIF's investments were in Saudi companies last year. International investments accounted for 17 per cent of the fund's portfolio in 2024, down from 20 per cent in 2023.
The fund's average annual returns fell from 8.7 per cent in 2023 to 7.2 per cent. Earlier this year it said that its net profits had fallen by 60 per cent due to higher interest rates, inflation and project impairments.
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