|Country:|| Saudi Arabia
|Description:|| Sovereign Wealth Fund
|Assets:|| $5.3 billion
|Reports||Sovereign Wealth Funds Contact and Information Report|
Sanabil al-Saudia is the newly created Sovereign Wealth Fund in Saudi Arabia. It currently has $5.3 billion (20bn riyals) in assets. It was established on July 15, 2008 under the control of Public Investment Fund. Ibrahim al-Assaf, Saudi Finance Minister, said the fund will initially focus investments in the technology sector. They will use their excess oil reserves as base for the fund.
Reasons for a Sovereign Wealth Fund
The idea of a Saudi Sovereign Wealth Fund has been discussed over the last few years; however, very little action was taken on this until the past year. In previous years, the Saudis’ oil wealth had gone partly to the kingdom’s central bank, the Saudi Arabian Monetary Authority, and partly into the coffers of the ruling family. One of the main factors behind this decision was the limited government budget surplus. As chart 1 shows, spending has far outpaced revenue until the last few years. While the current increase in oil prices starting in 2004 and continuing today, Saudi Arabia has been able to turn a deficit into a surplus. In terms of economic climate within the kingdom, as the graph below illustrates, the economy is shifting towards a surplus after years of deficit.
|2007||Rumors of a Saudi Arabia Sovereign Wealth Fund were spreading across the finance commuinity.|
|January 23, 2008||Muhammad al-Jasser officially announced the Saudi Arabia would create a fund and said it would be around $6 billion.|
|April 28 2008||It was announced that the fund would be created shortly and contain around $5.3 billion in assets.|
|May 6, 2008||Ibrahim al-Assaf, Saudi Finance Minister, said the fund will initially focus investments in the technology sector.|
|July 15, 2008||Fund was officially launched and named Sanabil al-Saudia.|
|January 2013||1st publicly known investment made in ACWA Power International.|