As part of its wider economic reforms, Saudi Arabia has said it aims to raise around $200 billion over the coming years through privatization plans across at least 16 sectors, ranging from healthcare, sports, energy, and grain milling. Argaam has compiled a list of these key sectors and entities below.
1) Saudi Aramco
The Kingdom plans to raise $100 billion through selling up to five percent of the oil giant next year through an initial public offering (IPO), which is said to value Aramco at $2 trillion or more. Officials initially said it would be listed in Riyadh and at least one foreign exchange, but in recent weeks some have suggested Riyadh might be the only venue.
2) Saudi Postal Corporation
In February, the Saudi Post invited banks to pitch for an advisory role in the sale of the government-owned postal service.
3) Saudi Grain Organization (SAGO)
The privatization program of SAGO is underway with many investors showing interest in buying milling firms, including a consortium of Saudi’s food producer Almarai and US-based agriculture giant Archer Daniels Midland. In November 2015, SAGO transferred the ownership of four of its flourmill companies to the Public Investment Fund.
4) Sports
In February, Jadwa Investment was appointed to advise on the privatization of as many as five soccer clubs in the Saudi Professional League. In Nov. 2016, the Kingdom’s cabinet approved a recommendation by the Commission of Economic and Development Affairs to turn state-owned sports clubs into private companies to participate in the league.
5) Airports
The Kingdom plans to privatize 27 airports by mid-2018. In July, Goldman Sachs was appointed to manage the sale of a stake in Riyadh’s King Khalid International Airport. In August, the government said it plans to transfer ownership of its airports to the Public Investment Fund as part of the privatization drive.
6) Saudi Arabian Airlines (Saudia)
In May, Saudia said it started the sale of Saudia Medical Services in Jeddah. Jadwa Investment, the financial adviser for the privatization of the medical unit, has reached an agreement with potential buyers valued at nearly $500 million.
7) Healthcare
The ministry of health will implement the three-year public healthcare sector privatization program in six stages, starting in Jeddah. One of the first assets to be privatized is King Faisal Specialist Hospital and Research Centre in Riyadh. The process is in a “very advanced stage,” Vice Minister for Economy and Planning Mohammed Al-Tuwaijri said in April.
8) Education
In January, the Kingdom said it finalized a plan to build 1,600 educational buildings over the next four years through public-private partnerships (PPP). In the same month, HSBC was hired as financial adviser to privatize construction and management of school buildings.
9) Saudi Electricity Company
Early this year, Nasser Al-Qahtani, the vice-governor of Regulatory Affairs, Electricity and Cogeneration Regulatory Authority (ECRA) said that the first electricity generation company will be offered for sale by the end of this year or early 2018. SEC is working with several government entities to prepare plans for its privatization.
10) Saline Water Conversion Corp. (SWCC)
In August, SWCC, the Kingdom’s second-largest power provider, received bids from several banks to advise on the privatization of its $7.2 billion Ras Al Khair desalination and power plant. Last year, the government announced plans to privatize SWCC, which operates nearly 30 desalination plants.
Write to Rasha Abo AlSoud at rasha@argaam.com
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