32 leading Saudi firms to explore multi-billion dollar investments in Pakistan

From October 9-11, 2024, a delegation of 32 leading private sector companies from Saudi Arabia, led by Investment Minister Khalid al-Falih, will visit Pakistan, as confirmed by sources in the Commerce Ministry. 

As per reports, this visit is set to bolster the economic ties between the two nations, with significant discussions on energy investments and bilateral agreements on the agenda.

Sources said that six Saudi companies have expressed interest in the Pakistani energy sector, with plans to sign a Memorandum of Understanding (MoU) during the visit. 

Additionally, longstanding issues related to the Bilateral Investment Treaty (BIT), which have stalled due to investment protection concerns, are expected to be addressed.

The sectors under consideration for Saudi investment include public sector entities, the hotel industry, renewable energy projects—particularly solar projects in South Punjab—Reko Diq mining, and a petrochemical refinery. 

In May 2024, the Pakistani Federal Government had already allocated two plots for Saudi investment in major hotels in prime Islamabad locations.

Discussions are also slated regarding a potential joint venture between the Petroleum Division and China’s Sinopec to establish a petrochemical refinery, although similar past efforts have not been successful.

The Prime Minister has directed the Ministry of Commerce to organize a Sectoral Breakout Session on October 10, 2024, to be led by the Ministry of Energy (Power Division) along with relevant regulatory bodies. The session aims to facilitate direct B2B meetings between Saudi companies and Pakistani businesses in the energy sector.

Additionally, the Prime Minister’s Office has requested updates on K Electric, as representatives from Saudi Company Al-Jomaih, a part of the visiting delegation, have interests in the utility provider.

Furthermore, Pakistan plans to encourage Saudi investment in the Diamer Bhasha Hydropower Project, which requires an estimated $8 billion but has yet to secure a formal investment agreement.

On Tuesday,  Prime Minister Shehbaz Sharif said that a Saudi delegation is scheduled to visit Pakistan ahead of the Shanghai Cooperation Organisation (SCO) summit and agreements worth $2 billion are expected to be signed.  between the two nations. 

He emphasized that a peaceful and secure environment is essential for attracting investment. 

The prime minister thanked China, Saudi Arabia and the UAE for their support in securing the IMF loan facility and also mentioned last week’s successful visit of Malaysian Prime Minister Anwar Ibrahim when two sides agreed that Pakistan would export Halal meat and rice to Malaysia.

He stated that the IMF program was approved due to exceptional teamwork, which also led to a reduction in inflation from 32% to 6.9%, along with increases in exports, remittances, and IT exports. The stock exchange, he noted, was performing exceptionally well. 

Highlighting his government’s reform agenda, he noted the doubling of tax return filers, the expansion of the tax base, and the digitization of the Federal Board of Revenue (FBR). 

He added that oil prices had been reduced for the fifth time, and a Rs50 billion relief package had been announced for power consumers in the protected category, alongside a Rs55 billion package from the Punjab government.