Credit: The Financial Times
Saudi Arabia’s Public Investment Fund (PIF) has reduced the reported value of its domestic gigaproject holdings by $8 billion, citing budget overruns, operational changes, and global economic pressures.
According to the PIF’s 2024 annual report, the sovereign wealth fund’s investments in five major domestic developments — including its high-profile Neom project — were valued at $56 billion at the end of 2024, a 12.4% drop compared to the previous year.
The gigaprojects, central to Crown Prince Mohammed bin Salman’s Vision 2030 strategy, are designed to diversify the kingdom’s economy and reduce reliance on oil revenues. Neom, a $500 billion futuristic city planned for a remote Red Sea location, has faced delays and scaling adjustments due to its complexity, high costs, and fluctuating oil prices.
While Saudi Arabia has experienced growth in non-oil sectors, crude exports still account for over 60% of state revenue. Weaker oil prices have led to a reassessment of large-scale developments, with certain Neom components expected to be phased in more gradually.
Despite the writedown, PIF’s total assets under management increased to approximately $913 billion in 2024 — up 19% from the year before — largely driven by an increased stake in state oil giant Aramco, now at 16% after the government transferred an additional 8% holding.
Aramco’s performance, however, has been hit by low oil prices, with shares down over 14% in 2025 and dividends reduced. The PIF’s average annual return fell to 7.2% in 2024 from 8.7% the previous year, while net profits dropped by 60% earlier in the year due to higher interest rates, inflation, and project impairments.
Analysts note that such declines are not unique to the PIF. Ana Nacvalovaite, a research fellow at Oxford University, told The Financial Times that other major sovereign wealth funds, including Norway’s, also reported losses last year. She added that while the write-down is significant, some losses are expected before Vision 2030’s target date.
In line with its evolving strategy, the PIF has shifted focus toward domestic initiatives, reducing the share of international investments in its portfolio from 20% in 2023 to 17% in 2024. The International Monetary Fund recently reported that both the PIF and Aramco repatriated foreign assets during the year.
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Original Article Courtesy: The Financial Times
IMAGE: Bloomberg
