Saudi Aramco To Transfer 4% Stake To C To Boost Renewable Energy Development

• Saudi Public Investment Fund (PIF) is one of the largest investors in Saudi renewable energy

• PIF is authorized by the Saudi government to invest 70% of its assets in clean energy

• Saudi Aramco will not receive any gain from the 4% stake transfer

Sinochem News reported on February 13, 2022 that the world's largest oil exporter Saudi Aramco (Saudi Aramco), the world's largest oil exporter, said on February 13 in a filing to its stock exchange The Saudi stock exchange (Tadawul) said in a statement that the company transferred a 4 percent stake to the country's sovereign wealth fund, the Saudi Public Investment Fund (PIF), which is expected to use the proceeds for domestic projects.

PIF is one of the biggest backers of Saudi Arabia's renewable energy projects, including $500 billion in future new energy development.

Robin Mills, chief executive of energy consultancy Kalmar Energy, said the funds could be used for renewable energy, with Saudi Arabia's Neom Future City project accounting for "a significant portion of it." "There's a hydrogen project and other projects around the Neom Future City project." Mills noted that $28 billion of Aramco's $75 billion annual dividend went into the fund, a "considerable amount of money."

PIF is authorized by the Saudi government to invest 70% of its assets in renewable projects in Saudi Arabia. PIF has selected 13 development areas, including solar and wind power generation projects and developments, as part of Saudi Arabia's Vision 2030 strategy to diversify the kingdom's economy.

PIF will continue to achieve its strategic goals by maximizing the value of its assets, launching new industries, building strategic partnerships, and localizing knowledge and technology.

Saudi Aramco and PIF have close ties because Aramco chairman Yasser Rumeyen is also the managing director of the Saudi sovereign wealth fund.

"Following the share transfer, the government of the Kingdom of Saudi Arabia remains Saudi Aramco's largest shareholder, holding more than 94 percent of the shares," Aramco said in a statement to the local bourse.

Saudi Aramco added that the share transfer was a "private" transaction between the government and PIF, and that Saudi Aramco was not a party to the share transfer and that there was no agreement on the payment or proceeds of the transfer.

Aramco debuted on the Saudi stock exchange (Tadawul) in 2019, raising $25.6 billion in the world's largest initial public offering (IPO). Aramco later issued additional shares, bringing the total raised to $29.4 billion.