Investors from Saudi Arabia and Pakistan have signed an agreement to set up a joint private equity fund, in a move aimed at deepening private-sector trade and investment between the two countries.
The Saudi-Pakistan Joint Business Council, formed by the governments of both countries, signed a memorandum of understanding in Karachi on Monday to establish the fund. Its initial size is described as several hundred million dollars, and it is expected to grow as new opportunities arise.
Under the plan, about 75 percent of the fund will be invested in Pakistan, while the remaining 25 percent will go to projects in Saudi Arabia. Investors from the two countries are expected to contribute equal shares to the fund.
The fund will target fast-growing private businesses in sectors including agriculture, mining and construction. It will also look at projects linked to the Pakistani government’s plan to commercialise public land and assets, including airports, motorways, ports and maritime development. In Saudi Arabia, it will consider commercial ventures across the country, including in the holy cities.
The agreement also allows institutions from both countries to take part in the equity of the fund management company, opening the door to wider participation by financial and corporate institutions.
Prince Mansour bin Mohammed Al Saud, speaking at the signing ceremony, said Saudi investors were actively looking for reliable partners in Pakistan and described the country as a natural partner for the Kingdom. Arif Habib, a leading Pakistani businessman, said the fund was a first step towards restoring the confidence of Saudi and other foreign investors in Pakistan.
Fawad Mukhtar, the council’s co-chairman from Pakistan and chairman of Fatima Group, attended the ceremony virtually, while council members from both countries were present in Karachi.
The launch comes at a time when Islamabad and Riyadh are deepening longstanding ties, especially in defence. Any establishment of the fund and its later investments will remain subject to regulatory approvals in both countries, and the final structure and first investments are expected to be confirmed only after the necessary clearances are secured.
