meed-logo

line1 line2 line3
SIGN IN / REGISTER

Saudi Arabia attracts $32bn in FDI inflows

30 September 2025

 

Saudi Arabia attracted SR119bn ($31.7bn) in foreign direct investment (FDI) inflows in 2024, marking a 24% increase from the previous year. This updated data from Saudi Arabia’s General Authority for Statistics (Gastat) reveals a revised figure that is 37% higher than the initial estimate, according to Bloomberg, and signals renewed investor interest, even as inflows remain short of the government’s $100bn annual target for 2030.

Until April 2025, leading analysts and data indicated a 19% YoY decline. The updated figure marked a sharp turnaround from earlier readings, when inflows were thought to have fallen to their lowest level since 2021. Analysts note the new data captures a wider range of market activity, including mid- and small-cap firms, offering a fuller picture of investment flows, signalling a turning point in sentiment. “This shows that inflows are no longer tentative but part of a sustained trend, marking one of the kingdom’s strongest years on record,” said Hamzeh Jalal B Al-Gaaod, Mena analyst at TS Lombard. 

Sector focus

The manufacturing sector led FDI inflows with SR35bn ($9.3bn), accounting for 29% of the total. This was followed by wholesale and retail trade (including vehicle repair) and construction, each accounting for 15% of the share at SR18bn. Financial and insurance services also represented a significant share, totalling approximately SR14bn (12%). This distribution aligns with Riyadh’s efforts to expand industrial capacity, strengthen supply chains and deepen financial services as part of its Vision 2030 diversification programme.

The push is reinforced by new agreements: On 29 September 2025, Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Alkhorayef held a series of bilateral meetings in Shanghai with senior executives of leading Chinese industrial companies to explore opportunities for localising high-value industries and expanding investment in the Kingdom, illustrating how FDI is being channelled into building local supply chains and technology capacity.  

Source markets

The UAE remained Saudi Arabia's top source of FDI for the fourth consecutive year. Inflows from the US and Germany more than tripled compared to 2023, while Hong Kong’s contribution surged to $2bn, marking a tenfold increase year-on-year. In contrast, investments from France and Spain declined. 

Outflows ease

Saudi outbound investment fell sharply in 2024, dropping 74% year-on-year, according to Gastat. The steep decline marks a structural shift: while Saudi Arabia has long been a major source of global capital, it is now positioning itself as a destination for international inflows. This aligns with Saudi Arabia’s broader economic transformation in the second half of 2024, shifting from exporting capital to attracting and retaining it. 

“The breadth of capital sources highlights the global reach of Saudi’s reforms, and the sharp fall in outflows shows investors are choosing to invest locally rather than leverage Saudi capital abroad,” Al-Gaaod said. “Outflows are no longer dominating the picture; the Kingdom is now drawing capital in rather than sending it out.”

Political dynamics have also influenced sentiment. Al-Gaaod noted that Trump’s endorsement of the Gulf states helped re-ignite investment flows from abroad, reinforcing the perception that Saudi Arabia is a safer long-term destination.

Reform dividend

Recent regulatory changes have also strengthened Saudi Arabia’s investment environment. A unified investor framework now covers both domestic and foreign firms, featuring simplified registration procedures and expanded investment incentives. Restrictions have been eased in sectors such as renewable energy, technology and logistics, opening the market to a wider range of international players. 

Key measures include easing foreign ownership caps in selected sectors, the introduction of securitisation rules to deepen capital markets, and the White Land Law aimed at unlocking idle real estate supply. These steps go beyond headline reforms, signaling Riyadh’s attempt to create a more competitive and transparent business environment. 

Another initiative under trial is a fund-of-funds model giving international investors exposure to mid- and small-cap companies on the Saudi exchange, broadening access beyond the large-cap names that have traditionally dominated foreign portfolios.  

These changes are intended to lower entry barriers and support the government’s long-term diversification goals. Al-Gaaod noted that the streamlined framework and new incentives are not merely symbolic; foreign investors are now visibly more comfortable in committing capital.

Analysts caution, however, that while the reforms mark progress, further steps will be needed to provide long-term certainty and fully align the investment climate with international expectations. 

Diversification push

Beyond regulatory change, investment is flowing into priority sectors aligned with Saudi Arabia’s diversification goals. In the automotive industry, Public Investment Fund (PIF)-backed Saudi electric vehicle (EV) firm Ceer is developing the kingdom’s first electric vehicle brand and aims to begin production in 2025. Additionally, PIF and South Korea’s Hyundai Motor Group announced a $500m joint venture in 2023 to build a Saudi EV plant, expected to be completed in 2026 with an annual capacity of 50,000 units.

In the energy sector, Aramco and BlackRock (via Global Infrastructure Partners) announced an $11bn investment in the Jafurah midstream gas network, which will supply the power needed for manufacturing and large-scale data centres. The mining sector is also expanding, with plans for lithium processing, battery production and metals development to secure clean energy supply chains.

This trend is regional as well. Abu Dhabi’s Masdar is shifting its focus from green hydrogen and ammonia to data centres, reflecting a shift in ESG and renewable energy investment strategies. Al-Gaaod stated that this reflects a new role for hydrocarbons: “Energy is still a driver, but now it powers industry and infrastructure rather than serving only exports, a change reflected in projects from Jafurah to Masdar.”

Looking ahead

Saudi Arabia is gaining traction in attracting international capital, with inflows approaching previously achieved record levels. While the $31.7bn recorded in 2024 is still below the government’s $100bn annual target for 2030, analysts stress that consistent inflows at lower levels would still be meaningful. 

“Even if inflows stabilise around $20-30bn annually, that will still mark a solid achievement for the non-oil economy,” said Al Gaaod. 

Preliminary data shows $6.4bn in inflows during Q1 2025, indicating continued activity. The upcoming wave of foreign capital is expected to focus on technology and digital infrastructure, with over $80bn in artificial intelligence and data centre projects already announced.

Beyond digital, the pipeline also spans EV and battery production and large-scale desalination projects, reinforcing diversification in both industry and utilities. At the same time, growth in debt capital markets and recent fiscal discipline, including scaling back parts of Neom Line project and cancelling certain contracts, underline that ex-oil expansion rests on multiple pillars, not FDI alone. 

MEED’s October 2025 special report on Saudi Arabia includes:

> GOVERNMENT: Riyadh confronts rising regional chaos
> ECONOMY: Riyadh looks to adjust investment approach
> BANKING: New funding sources solve Saudi liquidity challenge
> OIL & GAS: Aramco turns attention to strategic projects
> GAS: Saudi Arabia and Kuwait accelerate Dorra gas field development
> POWER: Saudi Arabia accelerates power transformation
> WATER: Transmission projects drive Saudi water sector growth
> CONSTRUCTION: Saudi construction pivots from gigaprojects to events
> TRANSPORT: Infrastructure takes centre stage in Saudi strategy

To see previous issues of MEED Business Review, please click here
https://image.digitalinsightresearch.in/uploads/NewsArticle/14749460/main.gif
Sarah Rizvi

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Rabigh 2 IPP expansion secures $2.58bn financing

    5 October 2026

    Saudi Arabia’s Rabigh 2 combined-cycle gas-turbine (CCGT) independent power project (IPP) expansion has reached financial close.

    In a disclosure to the Saudi Exchange, Acwa said it had secured SR9.69bn ($2.58bn) in long-term financing for the project, which has a generation capacity of 2,313.5MW.

    In April, MEED reported that Acwa and Saudi Energy (formerly Saudi Electricity Company) had signed a 31-year power purchase agreement (PPA) with Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), for the project.

    The project involves developing a CCGT plant in the Mecca region. It is being developed by Al-Morjan Two Electricity Company, with Acwa and Saudi Energy each owning a 40% stake in the project.

    The contract is valued at SR11.5bn ($3.07bn), the companies said in separate stock exchange filings at the time. The carbon-capture-ready power plant will be implemented under a build, own and operate contract.

    The financing has a tenor of about 34 years and was provided by a consortium of local, regional and international lenders.

    The lenders are:

    • Abu Dhabi Commercial Bank
    • Alinma Bank
    • Boubyan Bank
    • China Minsheng Banking Corporation, Hong Kong Branch
    • Commercial Bank of Dubai
    • HSBC Bank Middle East
    • Industrial and Commercial Bank of China
    • Industrial Bank, Beijing Branch
    • National Bank of Greece, Cyprus
    • Riyad Bank
    • Saudi Awwal Bank
    • Saudi National Bank
    • Standard Chartered Bank, Taiwan
    • Sumitomo Mitsui Trust Bank, London Branch

    The project scope also includes financing and expanding a 380kV electrical substation.

    According to regional project tracker MEED Projects, construction works have commenced on the project, and a joint venture of Egypt’s Elsewedy Electric and China’s Sinohydro has been working as the main contractor.

    Rabigh 1 extension

    In January, Saudi Energy announced a separate energy conversion agreement with SPPC for the purchase of electricity from the Rabigh 1 power plant expansion.

    The contract is valued at SR5.33bn ($1.42bn).

    It covers the development, financing, construction, ownership and operation of the gas-fired power plant, which will have a generation capacity of 1,179MW.

    A joint venture of Elsewedy Electric and Germany’s Siemens Energy is undertaking the engineering, procurement and construction work for the project, which is expected to be completed by the end of 2026.

    US/India-based Synergy Consulting is the financial advisory consultant to Saudi Energy on this project.

    Acwa also recently started initial commercial operations at the Taiba 1 and Qassim 1 CCGT power plants, as reported by MEED.

    The plants have a combined generation capacity of about 3.8GW and are two of four projects procured under the first round of Saudi Arabia’s gas-fired IPP programme by SPPC.

    A team of Saudi Energy and Acwa won the contract to develop and operate the projects in 2023.

    MEED’s October 2026 report on Saudi Arabia includes:

    > COMMENT: Saudi projects hold steady
    > GOVERNMENT: Riyadh looks to reset its regional defence outlook
    > ECONOMY: Conflict bolsters case for Saudi economic diversification
    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
    > POWER: Saudi Arabia’s power award activity slows
    > WATER: Saudi water sector hits sharp slowdown
    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
    > DATABANK: Saudi data indicates project spending shift

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20270643/main.jpg
    Mark Dowdall
  • Dubai announces $490m e-commerce hub expansion plan

    5 October 2026

    Dubai CommerCity has launched a second expansion phase valued at more than AED1.8bn ($490m), adding over 91,000 square metres (sq m) of office, retail and logistics space across the free zone’s business, social and logistics clusters.

    Dubai CommerCity is a joint venture of Dubai Airport Free Zone Authority (Dafza) and Dubai government-owned Wasl Asset Management Group.

    The expansion is scheduled for delivery between the first quarter of 2027 and the fourth quarter of 2028.

    The developer said the move builds on sustained demand at Dubai CommerCity, where occupancy has reached nearly 96% across its office, logistics and retail assets.

    Phase two will comprise a series of developments across Dubai CommerCity’s three districts: the Business Cluster, Logistics Cluster and Social Cluster.

    The Business Cluster comprises 13 office buildings with a total leasable area of 108,000 sq m. The Logistics Cluster consists of 84 logistics units with a leasable area of 68,000 sq m, while the Social Cluster features art galleries, restaurants and cafes. The development will also include 4,000 parking spaces.

    Dafza and Wasl Asset Management Group announced plans to develop the AED2.7bn ($735m) e-commerce free zone In 2017. 

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20270228/main.jpg
    Yasir Iqbal
  • Iraq and Turkiye discuss oil and gas deal

    5 October 2026

    Iraq and Turkiye have opened talks in Ankara on a framework agreement for oil, gas and energy cooperation, according to a statement from the Iraqi Oil Ministry.

    Iraq’s Oil Minister Bassem Mohammed Khudair Al-Abadi led the Iraqi side, while the Turkish Energy and Natural Resources Minister Alparslan Bayraktar led the Turkish side.

    Officials discussed a proposed roadmap to deepen work on oil and gas infrastructure, petrochemicals, and trade in oil, gas and power.

    Discussions about a future long-term deal to govern the Iraq-Turkiye Pipeline (ITP) were central to the talks.

    The ITP exports oil from northern Iraq to the port of Ceyhan in Turkiye.

    In July, Turkiye and Iraq signed a temporary agreement to allow crude flows through the ITP for a period of 12 months.

    Before the temporary agreement was signed, the previous deal governing oil exports through the pipeline was due to expire on 27 ​July.

    Speaking last month, Ali Al-Shatri, director general of Iraq’s state organisation for marketing oil (Somo), said the temporary deal was “a prelude” to a much bigger agreement.

    As well as governing pipeline exports, the new agreement is expected to cover electricity, chemicals and gas deals as well as the construction of a new oil refinery in Ceyhan.

    Under current plans, the new refinery will process Iraqi crude in order to produce refined products that can be exported to Europe.

    Bayraktar said: “Following the crude oil transportation agreement signed between our national company … we are clarifying our roadmap for a new, longer-term and more comprehensive agreement.

    “In this regard, we plan to activate our joint working groups to rapidly finalise oil and natural gas infrastructure, exploration and production, oil trading, refining-petrochemical and electricity projects.

    “In close cooperation with the new Iraqi Government, we will strongly continue to implement these concrete projects for the stability and prosperity of our shared geography.”

    Bayraktar said it was important to consider extending the Kirkuk-Ceyhan pipeline to reach Basra in southern Iraq.

    He also said it was important to consider expanding the capacity of the ITP to create a strong alternative to the Strait of Hormuz.

    The Strait of Hormuz is a key oil export route that has been disrupted by a regional war since the US and Israel attacked Iran on 28 February.

    Bayraktar also said that he wanted state-owned Turkish Petroleum Corporation (TPAO) to expand its footprint in Iraq.

    He said: “We aim for our national company TPAO to play an active role not only in the Kirkuk fields but also in different fields in Iraq, to ​​reach the target of supplying one million barrels of crude oil as stated by Iraqi Prime Minister Ali ez-Zeydi; and to transform Ceyhan into a global energy hub by increasing trade volume.”

    Bayraktar said that Turkiye wanted energy to be a key part of the plan for a north-south trade corridor from the Grand Faw Port to the Turkish border.

    Under current plans, the corridor will combine a new railway and highway system.

    Bayraktar said that Turkiye also wants the route to include oil and gas pipelines as well as electricity transmission lines.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20268590/main.jpg
    Wil Crisp
  • RTCC/Ictas wins $214m King Salman airport private aviation terminal

    5 October 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s King Salman International Airport Development Company (KSIADC) has awarded an estimated SR800m ($214m) construction contract to build the private aviation terminal.

    The contract was awarded to a joint venture of Riyadh-based Al-Rashid Trading & Contracting (RTCC) and Turkiye’s IC Ictas.

    The scope includes constructing a central courtyard, grand boulevard, parking facilities, access-control checkpoints, logistics and ground-support facilities, internal road networks and landscaping.

    It also includes all civil, structural, architectural, and mechanical, electrical and plumbing (MEP) works, along with testing, commissioning and handover activities.

    KSIADC is making rapid progress on its overall project masterplan. In July, it reported major progress on landside and airside infrastructure works linked to its third runway and private aviation facilities, as part of the wider airport expansion programme.

    Project scale

    The project covers an area of about 57 square kilometres (sq km), allowing for six parallel runways, and will include the existing terminals at King Khalid International airport. It will also include 12 sq km of airport support facilities, residential and recreational facilities, retail outlets and other logistics real estate.

    The airport aims to accommodate up to 100 million passengers by 2030. The cargo target is to process 2 million tonnes a year by 2030.

    Saudi Arabia plans to invest significantly in its aviation sector. Riyadh’s Saudi Aviation Strategy, announced by Gaca, aims to triple Saudi Arabia’s annual passenger traffic to 330 million travellers by 2030.

    It also aims to increase air cargo traffic to 4.5 million tonnes and raise the country’s total air connections to more than 250 destinations.

    MEED’s October 2026 report on Saudi Arabia includes:

    > COMMENT: Saudi projects hold steady
    > GOVERNMENT: Riyadh looks to reset its regional defence outlook
    > ECONOMY: Conflict bolsters case for Saudi economic diversification
    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
    > POWER: Saudi Arabia’s power award activity slows
    > WATER: Saudi water sector hits sharp slowdown
    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
    > DATABANK: Saudi data indicates project spending shift

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20268414/main.jpeg
    Yasir Iqbal
  • Contractors submit bids for Libya refinery

    5 October 2026

     

    Bids have been submitted for the main contract for Libya’s planned South Refinery project and are currently under technical evaluation, according to industry sources.

    The project, located in Ubari in southern Libya, has gained momentum over the past year, and the main contract is anticipated to be worth more than $600m.

    The main contract is expected to use the engineering, procurement and construction (EPC) model.

    The EPC work is expected to take 50 months, and the facility will be designed to process 30,000 barrels a day (b/d) of crude oil.

    In March, US-based engineering company KBR was awarded a contract by Zallaf Exploration, Production & Refining of Oil & Gas Company to provide project management and technical services for the project.

    Under the terms of the contract, KBR will provide contract management, project management and supporting technical services throughout the project’s EPC phases.

    The refinery is expected to produce:

    • Propane and butane for domestic and industrial uses
    • Gasoline
    • Kerosene
    • Diesel
    • Fuel oil

    In March, KBR said that the project was aligned with its “long-standing commitment to advancing vital oil and gas infrastructure in Libya”.

    Libya currently operates five main refineries with a combined nameplate capacity of 380,000 b/d, but actual throughput is closer to 180,000 b/d due to poor maintenance and damage from military clashes.

    In addition to the South Refinery project, Libya also plans to upgrade the Zawiya refinery and carry out projects at the Serir, Brega, Tobruk and Ras Lanuf refineries.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20267178/main.jpg
    Wil Crisp