Riyadh, Saudi Arabia – Saudi Arabia is poised to maintain a strong pace of borrowing in 2025 to finance its ambitious oil-diversification projects under Crown Prince Mohammed bin Salman’s Vision 2030 plan, Bloomberg reported. The kingdom, according to the report, has initiated its first bond issuance of the year with a three-tranche dollar deal, managed by Citigroup Inc., Goldman Sachs Group Inc., and JPMorgan Chase & Co.
The National Debt Management Center (NDMC) has estimated Saudi Arabia’s funding needs for 2025 at 139 billion riyals ($37 billion). A significant portion will be used to address the budget deficit, while the rest will go toward repaying maturing debt.
Saudi Arabia was one of the largest bond issuers among emerging markets in 2024, issuing $17 billion in international bonds. The report noted that the kingdom is now exploring issuing bonds in currencies beyond the dollar to diversify its funding base.
As part of its borrowing strategy, Saudi Arabia recently secured a $2.5 billion three-year revolving credit facility from Abu Dhabi Islamic Bank, Credit Agricole SA, and Dubai Islamic Bank, the report highlighted. The total bond funding in 2024, including issuances by state-controlled entities such as the Public Investment Fund, was approximately $50 billion.
The borrowing aligns with the Crown Prince’s Vision 2030 agenda, which seeks to transform the world’s largest crude oil exporter by investing heavily in infrastructure, new cities, sports, and emerging technologies such as semiconductors. These investments are critical as Brent crude prices, currently at $76 per barrel, remain below the $90 per barrel level required to balance Saudi Arabia’s budget, according to the International Monetary Fund.
While the kingdom anticipates a fiscal deficit of about 2.8% of GDP this year, its financial position remains robust. Moody’s Investors Service upgraded Saudi Arabia’s credit rating to Aa3 in November, reflecting confidence in the nation’s non-oil sector growth and its ability to support ambitious investments.
PIF completes $7 bn inaugural Murabaha credit facility
The Public Investment Fund (PIF) issued a press release today announcing its first murabaha credit facility for the sum of $7 billion as part of its medium-term capital raising strategy. The financing structure is supported by a diverse syndicate of 20 international and regional financial institutions.
PIF head of the Global Capital Finance Division and head of Investment Strategy and Economic Insights Division Fahad AlSaif said: “This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia.”
According to the release, this financing complements PIF’s successful sukuk issuances over the past two years. It also underpins PIF’s strong financial position, as well as its best-practice approach to debt financing.
PIF is rated Aa3 by Moody’s with stable outlook and A+ by Fitch with stable outlook. PIF has four main sources of funding: capital injections from government, government asset transfers, retained earnings from investments, and loans and debt instruments.