This would be the first commercial loan for Public Investment Fund (PIF), the Kingdom’s vehicle to deliver the Vision 2030 reform plan announced by the government in 2016.
Saudi Arabia’s PIF is seeking to raise between $6 and $8 billion from banks as it seeks to boost its financial strength to help finance the kingdom’s economic transformation from dependence on oil exports.
The kingdom’s sovereign wealth fund issued a request for proposals to banks several weeks ago, about raising money for a syndicated loan, and the deal is expected to close before September, reported Reuters.
The principal sources of funding for PIF were capital injections and asset transfers from the government as well as earnings from existing investments until now when sovereign wealth fund’s expanded roles call for more funding through loans and other debt instruments.
Proceeds from the loan will be used for general corporate purposes.