Saudi Arabia to allocate Aramco’s proceeds for domestic projects: Finance Minister

Saudi Aramco’s proceeds will be injected in domestic projects, Saudi Arabia's Finance Minister, Mohammed Al-Jadaan said.

“The proceeds will be used largely, maybe not totally, in the local economy, in projects where the Public Investment Fund (PIF) will be the first mover which then basically pulls more private sector participation ... so the money will remain in the system mostly,” Al-Jadaan told Reuters.

Jadaan praised the fact that one third of the share sale was covered by Saudis, noting that it was positive for “wealth retention and savings”.

He also said that key initial public offering (IPO) buyers were Saudi investors who would usually invest outside the Kingdom.

The listing should in the long-term help deepen Saudi capital markets and lure foreign investment, Jadaan stressed.

Al-Jadaan also noted that Saudi Aramco’s IPO will pave the way for attracting the attention of international investors to other Saudi assets.

On the energy level, the finance minister said Riyadh plans to proceed with further cuts to energy subsidies between 2020 and 2025, nevertheless, the government will assess the impact on the private sector’s growth before deciding on the size of cuts and timing.

“We are looking specifically at the industrial sector to ensure that any energy price reform would not cause any damage,” Al-Jadaan concluded.

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