Saudi firms outline $51bn projects under ‘Shareek’ diversification plan

Saudi Arabia outlined plans for 192bn riyals ($51bn) of investments by local companies including Saudi Aramco and mining giant Maaden under a government incentive programme as it seeks to accelerate a plan to diversify its economy away from oil.
The programme, called Shareek, was begun in 2021 by Crown Prince Mohamed bin Salman and is part of his “Vision 2030” plan to transform the oil-dependent Gulf kingdom and raise it to the ranks of the world’s top 15-largest economies by 2030. Saudi Arabia was the world’s fastest-growing among the Group of 20 economies in 2022.
In an event held on Wednesday at the Ritz-Carlton hotel in Riyadh, which the crown prince attended briefly, officials said more than 60% of the financing for the projects will come from eight companies led by Saudi Aramco by 2030.
The projects are set to add almost 467bn riyals to the kingdom’s gross domestic product and create more than 64,000 jobs by 2030, according to Abdulaziz al-Arifi, chief executive officer of the Shareek programme.
Saudi Arabia’s Tadawul All Share Index rose as much as 1.3% on Thursday.
Among the first batch of projects receiving support under the Shareek programme is Aramco’s Amiral Petrochemical Complex in Jubail, an $11bn joint venture with TotalEnergies SE, and Maaden’s plan to boost phosphate production by 50% to make it the third-largest fertiliser producer by 2029.
National Shipping Co of Saudi Arabia, also known as Bahri, also announced a 1.53bn plan to invest in a fleet of ships for gas transportation.
Prince Mohamed unveiled Shareek at the end of March 2021 during a Zoom call with his top ministers. It was broadcast live on state television, and the prince appeared with his sleeves rolled up and speaking enthusiastically to the camera.
He said the funding from the corporate sector would be coupled with trillions of riyals in government spending and investments. Combined with a rise in consumer spending of 5tn riyals, it would all translate into a 27tn-riyal injection into the economy over 10 years. There would be more spending over the next decade in Saudi Arabia than during the entire 300-year history of the kingdom, he had said.
“This is a huge opportunity, this is a new Saudi Arabia,” the crown prince said at the time.
The signing ceremony on Wednesday included announcements of projects from many of Saudi Arabia’s heavyweights including Aramco, Saudi Basic Industries Corp, Saudi Arabian Mining Co, as Maaden is formally known, and logistics company Bahri.
“Shareek is a good demonstration of how the government is trying to synchronise investment from the private sector with investment from the government,” said Bandar al-Khorayef, minister of industry and mineral resources. “It is intended to move faster different projects that we know are unlocking certain supply chains, for example in manufacturing.”
Firms are offered investment incentives including government off-take agreements and access to government loans or financing support, said al-Khorayef. When it was originally presented the plan was described as encouraging private-sector firms to cut back on dividend payments to shareholders and instead use the money to invest in new growth initiatives. So far, none of the companies involved have said anything about trimming shareholder payouts.