Saudi Arabia to raise $10 bln for privatization, PPP projects: report

Saudi Arabia, with its push towards privatization plans, has issued a revised plan of sales to 2020, with an aim of raising around $10 billion, according to a new report from global law firm Hogan Lovells.

The water sector looks set to be the pioneer in 2019, with the sale of Ras al-Khair desalination plant already well advanced and others on the way, the report said.

Additionally, four flour mills are also likely to be sold within the year, as well as the national football clubs, it further stated.

“The transformation is based on developing the role of the private sector in the Saudi economy and all initiatives are aimed at doing that. There are signs that demand from the private sector is picking up,” Saad Alrashed, partner at Hogan Lovells Saudi Arabia, said.

“With public-private partnerships (PPPs) and privatization coming through in 2019, we expect to see a major shift in the private sector,” he said.

The National Center for Privatization & PPP (NCP), set up in 2017 in order to improve implementation, is planning to award 14 PPP projects by 2020, worth around $7 billion, in areas such as parking, recycling, renewable energy, education and health.

“The lack of clear payment guarantees in these sectors will benefit regional players, such as Saudi and Emirati companies, that are able to understand and manage sovereign risk more easily,” the report said.