Saudi-Pakistan business council signs MoU for private equity fund
The Saudi Pakistan Joint Business Council signed a memorandum of understanding on Monday to set up a private equity fund. Of the fund's investments, 75 percent will go to Pakistani projects and 25 percent to projects in Saudi Arabia.
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- The Saudi Pakistan Joint Business Council signed an MoU on Monday for the Saudi Pakistan Private Equity Fund.
- Saudi and Pakistani private investors will contribute equal shares.
- 75 percent of the fund is meant for Pakistani projects and 25 percent for Saudi projects.
The Saudi Pakistan Joint Business Council signed a memorandum of understanding on Monday to establish the Saudi Pakistan Private Equity Fund. The signing was reported from Karachi, where a ceremony was held, according to Express News.
The fund is described as a proposed joint fund with a value in the hundreds of millions. Private investors from Saudi Arabia and Pakistan will contribute equal shares to it.
Under the plan, 75 percent of the fund will be invested in Pakistani projects and 25 percent in projects in Saudi Arabia. It intends to invest in fast-growing private businesses, including those in agriculture, mining and construction.
The fund will also review commercial projects from Pakistan's land bank monetisation programme. These include airports, motorways, ports and development of the maritime sector. In Saudi Arabia, it will look for commercial investment opportunities across the country, including the holy cities.
Institutions in both countries can be invited to take part in the equity of the fund management company. Council members from both countries attended the ceremony. Fawad Mukhtar, the council's co-chairman from Pakistan and chairman of Fatima Group, attended virtually.
Prince Mansour bin Mohammed Al Saud was quoted by Express News as saying that Pakistan is the kingdom's natural partner. The outlet's summary also quotes him as saying the fund will give Pakistani traders a strong commercial base and that Saudi investors are looking for such markets.
Arif Habib was quoted as saying: "We see this as the first step towards restoring the confidence of Saudi and other foreign investors in Pakistan." The reports do not give the exact size of the fund or a timeline for its launch.
Background
khabr.pk reported on 5 November that Finance Minister Muhammad Aurangzeb said Saudi Arabia had rolled over its $3 billion deposit for Pakistan. He said no further support was needed from Riyadh for now.
Why it matters for Pakistan
The fund is meant to bring Saudi investment to Pakistani businesses and traders. Companies in agriculture, mining and construction are among the sectors it plans to invest in. Projects under Pakistan's land bank monetisation programme, such as airports, motorways and ports, are also on its review list.
