RIYADH — Saudi Arabia's government and a Russian state fund have signed a memorandum of understanding to jointly invest as much as $10 billion, official Saudi news agency SPA said on Sunday. The deal between Saudi Arabia's Public Investment Fund (PIF) and the Russian Direct Investment Fund (RDIF) was sealed last week when top Saudi officials visited Russia. The governments also agreed to cooperate on developing nuclear energy. SPA did not say where or when the joint investments would be made. The PIF was set up to help develop the Saudi economy, while the RDIF makes equity investments mainly in Russia and in the last few years has signed similar co-investment agreements with countries such as China, South Korea and Kuwait. Prince Saud K. Al Faisal, executive director for investment policy at the Saudi Arabian General Investment Authority, told Reuters in March that Saudi Arabia was increasingly focusing on investing to obtain technology and benefit its economy rather than just seeking monetary returns. Last week the PIF agreed to buy a 38 percent stake in South Korean builder POSCO Engineering & Construction Co for about $1.1 billion, in a deal that could transfer construction sector expertise to Saudi Arabia. POSCO E&C is one of the leading global engineering and construction companies that specializes in engineering and building industrial and energy facilities, infrastructure and urban development, and has several international branches in emerging markets. The agreement includes a commitment to proceed with strategic plans in Saudi Arabia, such as the establishment of a Saudi joint venture company in the field of engineering and construction. The engineering and construction sector is second only to the oil sector in respect of its financial contribution to the gross domestic product of the Kingdom of Saudi Arabia. Recent studies suggest that the Kingdom plans to spend approximately $15 billion in the construction sector on strategic infrastructure projects this year, which highlights the size of this sector and its importance in creating sustainable economic development. – SG/Agencies
