A cruise ship sails off Saudi Arabia’s western coast. File/Agence France-Presse

Saudi Arabia’s Public Investment Fund (PIF) launched a new venture that will invest $3 billion in developing tourism and infrastructure in the southwestern Asir region, the state news agency SPA reported.

The kingdom, which opened its doors in September 2019 to foreign tourists by launching a new visa regime for 49 countries, hopes to diversify its oil-dependent economy through tourism and wants the sector to contribute 10% of gross domestic product (GDP) by 2030.

Crown Prince Mohammed Bin Salman has long pushed the PIF as a central plank in his plan to find ways of driving growth while weaning the economy off its dependence on oil. Crude exports still account for more than half the kingdom’s income.

The Soudah Development Company (SDC) will develop Soudah, a mountainous area located 3,015 metres (9,892 ft) above sea level, and the ancient village of Rijal Alma’, into a tourist destination for residents and visitors. It aims to contribute an estimated $8 billion to the kingdom’s cumulative gross domestic product (GDP) by 2030.

The Asir region and its capital, Abha, are a favourite destination for Saudis and foreign residents for its pleasant cool and humid climate, making it ideal for short holidays to escape the desert weather in most of the kingdom.

SDC will partner with the private sector to build 2,700 hotel rooms, 1,300 residential units, and 30 commercial and entertainment attractions by 2030, the state press agency SPA said in a statement. It aims to attract over 2 million visitors annually and create 8,000 direct and indirect jobs for young Saudis.

While the nascent tourism sector was hit hard by the measures taken by the government to fight the coronavirus pandemic, local tourism campaigns to Abha and other destinations helped to partially attract millions of dollars Saudis used to spend overseas.

To boost the domestic economy, the PIF plans to invest at least 150 billion riyals ($40 billion) annually in the local economy until 2025.

Saudi Arabia’s Public Investment Fund plans to double its assets to 4 trillion riyals ($1.07 trillion) by 2025, Prince Mohammed Bin Salman said on Sunday, a move that would make it one of the world’s biggest sovereign wealth funds.

The fund would invest 3 trillion riyals in new sectors over the next 10 years, said the prince, who is Saudi Arabia’s de facto ruler and chairs the fund’s board. A new five-year plan would make the fund “the leading catalyst for Saudi Arabia’s economic transformation and diversification,” the prince added in a speech on state TV.

The prince has long pushed the Public Investment Fund as a central plank in his plan to find ways of driving growth while weaning the economy off its dependence on oil. Crude exports still account for more than half the kingdom’s income.

Sunday’s announcements highlighted “the fact that developments in Saudi Arabia are going to be PIF-led. But external funding will remain critical given the size of its objective,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

The prince said the fund, which has already increased its assets under management to 1.5 trillion riyals by 2020 from $150 billion in 2015, was on track to meet its goal of having more than 7.5 trillion riyals of assets under management by 2030.

The five-year strategy would see the fund creating 1.8 million direct and indirect jobs by 2025, from 331,000 by the end of by the third quarter of 2020, he said. To boost domestic economy, the fund planned to inject at least 150 billion riyals annually in the local economy until 2025, Prince Mohammed added.

The PIF and its companies aimed to contribute 1.2 trillion riyals to non-oil gross domestic product (GDP) by the end of 2025, he added.

“The Fund’s role as a separate channel to support the economy at the time of volatile oil prices is of major importance. It will help build savings, secure financing and attract investments,” said Mazen Al-Sudairi, head of research at Al Rajhi Capital.

The fund has become a more active investor since 2015, taking a $3.5 billion stake in Uber Technologies and contributing $45 billion in Softbank’s inaugural $100 billion technology fund.

Meanwhile, oil prices extended gains for a fourth session on Thursday to reach the highest levels in more than 13 months, underpinned by an assurance that US interest rates will stay low, and a sharp drop in US crude output last week due to the storm in Texas.

Brent crude futures for April gained 33 cents, 0.5%, to $67.37 a barrel, while US West Texas Intermediate crude for April was at $63.45 a barrel, up 23 cents, 0.4%.

Both contracts touched their highest since Jan. 8, 2020, earlier in the session with Brent at $67.49 and WTI at $63.67. The April Brent contract expires on Friday.