The Public Investment Fund is expected to receive $5 billion in quarterly dividends from its stake in Aramco after the government transferred more of the oil giant’s shares, which are partly state-owned, to the Saudi sovereign wealth fund, and the company announced it would increase the dividend to shareholders after the transfer of the new shares.
The increase in Aramco's dividend, which is set to total at least $124 billion this year, comes days after Crown Prince Mohammed bin Salman ordered the transfer of an additional 8% stake in Aramco to the Public Investment Fund.
The fund now owns a 16% stake in Saudi Aramco, worth about $333 billion, meaning it could receive annual dividends of at least $20 billion.
Increased financial capabilities of the Fund
This is a major boost for the fund as it prepares to increase spending over the next few years on projects such as Neom, a new $500 billion-plus city under construction on the kingdom’s west coast.
The PIF is also committed to spending $40 billion annually domestically to support efforts to diversify the country’s oil-dependent economy, although its ability to finance such mega-projects has been increasingly questioned by analysts, and the government is forecasting a budget deficit until at least 2026.
The sovereign fund’s governor, Yasir Al-Rumayyan, said annual spending is set to rise to $70 billion starting in 2025. The fund has already raised $7 billion from two bond offerings so far this year.
The PIF also controls assets worth about $900 billion, including its stake in Aramco. According to a recent filing, it had $15 billion in cash and cash equivalents as of September, a relatively low figure given the entity’s size.
