A quarter of Saudi Arabia’s pledged $10 billion investment in Russia has been deployed, the boss of Moscow’s sovereign wealth fund said on Wednesday.
The Saudi Public Investment Fund (PIF) in 2015 signed an agreement to invest up to $10 billion in Russia through a partnership with the Russian Direct Investment Fund (RDIF).
Kirill Dmitriev, chief executive of RDIF, told the Davos forum on Wednesday that $2.5 billion of that money had been invested.
“We’re at $2.5 billion, and there are some mega-deals discussed by Saudi Arabia to invest in our (liquefied natural gas) sector, and in our petrochemicals sector. So it’s a really very good cooperation,” Dmitriev said.
The $2.5 billion investment marks a rapid increase in the pace of Saudi investments in Russia. In December, Dmitriev said that, as of late 2016, Saudi Arabia’s investment in Russia “stood practically at zero,” according to the Russian News Agency.
The fund chief said that there was a wider warming of relations between Saudi Arabia and Russia, aside from the investment deals.
“Many people blame Saudi Arabia for pressure on the Soviet Union, because they brought oil prices very low when the Soviet Union collapsed, and obviously the war in Afghanistan. But in three years, under the leadership of President Putin, and (Saudi Crown Prince) Mohammed bin Salman, we were able to really make it a strategic, positive relationship,” Dmitriev said.
He pointed to a cooperation between Russia and Saudi Arabia, as well as other OPEC members, to agree to cut oil output to help stabilize energy prices, along with “major investment inflows.”
“It’s an example of how, in a fractured world, we can have a positive impact in two or three years, of rebuilding relationships between countries.”
Dmitriev said Russia was looking to bring in more foreign investment under the country’s plan for national projects.
“We need to destroy this myth that Russia is not producing positive returns. It is producing positive returns,” he said.
“As part of this National Projects Plan, we believe it is very important to bring in foreign investors, because … lots of co-investment in addition to government money brings additional transparency and clarity into projects.”
The Middle East is key to this, he added.
“With the United Arab Emirates we have done 45 investments already, and we have major investment flows coming from the Middle East, including Saudi Arabia,” Dmitriev said.
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