Saudi Arabia’s PIF secures $7bn investment financing

• Murabaha credit facility
• Backed by syndicate of 20
• Complements sukuk offering

Saudi Arabia’s Public Investment Fund (PIF) has raised $7 billion to finance future investments. 

The fund’s murabaha credit facility – a common Islamic financing tool in which buyer and seller agree to cost and markup of an asset – was supported by a syndicate of 20 international and regional financial institutions, PIF said in a statement. 

The wealth fund said the shariah-compliant financing structure is part of its medium-term capital raising strategy of diversifying its funding sources.

“This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia,” said Fahad Al Saif, PIF’s head of the global capital finance division.

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PIF said the financing complements its sukuk issuances over the past two years. It has four primary sources of funding: capital injections from government, government asset transfers, retained earnings from investments, and loans and debt instruments.

Saudi Arabia said this week that it will need estimated funding of SAR139 billion ($37 billion) in 2025 to cover its budget deficit. It aims to continue diversifying local and international financing channels to efficiently meet funding needs in 2025.

Finance minister Mohammed Al-Jadaan said the government aims to expand strategic spending this year on development and giga-projects, in line with Vision 2030 programmes.