ECONOMY

King Salman signs multi-billion dollar economic deals with Russia

Saudi King Salman signed multi-billion dollar economic agreements with Russia in Moscow on Thursday during his official visit. (SPA)

During his visit to Moscow, Saudi King Salman signed multi-billion dollar economic agreements, including a partnership between Russian sovereign wealth fund RDIF and Saudi Arabia’s Public Investment Fund (PIF) and Mubadala to invest in transport infrastructure projects in Russia.

Up to $100 million will be invested with the two sovereign wealth funds becoming shareholders in United Transport Concession Holding set up to carry out investment projects in building and operating roads and railways in Russia, RDIF said in a statement after the signing, according to Reuters.

RDIF said Abu Dhabi’s state-owned Mubadala fund would also co-invest in the holding company.

The three partners are studying participation in three projects in Moscow and St Petersburg. They expect to invest a total of $226 million (13 billion roubles), RDIF said.

Saudi Arabia also signed a Memorandum of Understanding (MoU) with Russia to further localize military industries.

King Salman said that positive cooperation between the kingdom and Russia supports the stability of the global economy.

Al Arabiya correspondent to Russia, Mazen Abbas, said that the agreements include the telecommunications sector, technology, and agriculture.  

Joint investment fund 

The two leaders signed a MoU to establish an investment platform in the oil sector, an investment platform in the technology sector, as well as a MoU to implement a cultural program between the two countries.

A joint Saudi-Russian investment fund was launched worth $1 billion. The Russian company Sibur has signed an agreement with Saudi Aramco to explore opportunities between the two countries.

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These 10 major agreements, would map the future of relations between Russia and Saudi Arabia.

Russian Energy Minister Alexander Novak said that the value of investment agreements expected during the visit is more than $3 billion.

Among the expected agreements is the establishment of a $1 billion fund for technology investment, cooperation in water desalination and energy efficiency in air-conditioners, as well as Saudi investment into toll-free roads in Russia.

The Russian Energy Ministry quoted Novak as saying in an interview with the Financial Times that the deals would include a $ 1.1 billion agreement by which Russian petrochemical company Sibur will build a plant in Saudi Arabia. 

Petrochemical markets 

Reuters reported that the companies plan to evaluate the potential of the petrochemical markets of both countries and consider the possibility of expanding cooperation, Sibur said in a statement.

“The partnership with one of Saudi Arabia’s biggest petrochemical companies will allow Sibur to develop its expertise and sales areas and to study ...the Middle East market,” Sibur Chairman Dmitry Konov said.

The agenda of the conference focused on the determination of the two countries to develop trade and set up a committee to raise this exchange in addition to the signing of six6 agreements for the private sector.

The conference concluded with speeches by the Saudi Minister of Trade, the Saudi and Russian Energy Ministers, and the President of the Russian Direct Fund.

Several sessions were held on the sidelines of the forum, including a session on industrialization and food security. 

Construction sector 

Saudi Arabia’s General Investment Authority granted licenses to four Russian companies to work fully in the construction sector.

Saudi Energy Minister Khalid al-Falih talked about the results of the Saudi-Russian agreement on oil, saying that its positive effects would extend to the global economy as a whole.

In the mining sector, Maaden’s chief executive disclosed the company’s intention to sign several agreements with Russia, as well as a Russian desire to create partnerships with Saudi Arabia in the mining and aluminum industries.

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Last Update: Thursday, 5 October 2017 KSA 19:16 - GMT 16:16
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