RDIF, Saudi Aramco launch $1bn energy fund

Saudi Arabia’s PIF will also invest in a major toll road in Moscow alongside RDIF and Russia’s largest pension fund.

Russia and Saudi Arabia have agreed to set up a $1 billion energy fund to invest across the sector, Kirill Dmitriev, the Russia Direct Investment Fund’s chief executive, said today.

RDIF will be joined by oil giant Saudi Aramco in the fund, which will exercise a “broadly defined” mandate to invest across oil, gas and electricity distribution, Dmitriev said.

The energy fund is in addition to an investment by Saudi Arabia’s Public Investment Fund, which has agreed to become a partner in the Kutuzovsky toll road project for an undisclosed amount. PIF will join RDIF and Gazfond, Russia’s largest private pension fund, as partners in the project and will also invest in other toll roads with the pair in the future. The deal builds on from its $20 billion commitment to Blackstone’s US infrastructure fund earlier this year.

RDIF and Gazfond established a partnership in June to invest in the construction and operation of roads, railways, city transport and PPP projects in Russia, including the Kutuzovsky site. RDIF said at the time it hoped to attract leading sovereign wealth funds and institutional investors to the partnership.

The tie-ups are part of a series of deals to be concluded by the two countries as part of King Salman’s first visit to Moscow. The duo have also created a $1 billion technology fund and the three agreements form part of a $10 billion MoU signed in 2015.