- Riyadh targets private-sector investment
- World Cup and Expo drive demand
- PPPs integral to Vision 2030
Riyadh is actively seeking private-sector investors to fuel its ambitious development plans, presenting significant opportunities but facing hesitation from companies wary of financial risks, according to a senior official.
This shift toward private-sector involvement underscores the challenges Saudi Arabia faces as it moves from government-led initiatives to a growth model driven by private enterprise—an essential component of its Vision 2030 economic transformation strategy.
Mohammed AlWabely, Assistant Deputy Mayor for Iconic Projects at Riyadh Region Municipality, highlighted the government’s efforts to attract private funding for flagship projects, including infrastructure and cultural landmarks, by introducing incentives to mitigate investor concerns.
“There’s a tremendous opportunity for the private sector to fund these projects,” AlWabely said. “The government is eager to actively engage with private investors.”
King Abdullah International Gardens: A Case Study in Incentivization
One such project is the King Abdullah International Gardens, envisioned as one of the world’s largest botanical gardens, rivaling those in Singapore and Kew, England. Despite the project’s potential, initial reactions from private investors were cautious, with many citing financial risks.
“We encountered resistance,” AlWabely noted. “Private-sector studies flagged risks, even though our case study demonstrated financial sustainability with revenue covering operational costs.”
To make the project more appealing, the municipality offered 500,000 square meters of undeveloped land as an incentive to the private operator.
“We told them, ‘Here’s the garden to operate, and here’s additional land you can develop as you see fit,’” he explained. “This created a financial balance, making the offer more attractive.”
Riyadh’s Growing Investment Focus
Riyadh has become a focal point for investment, especially after being selected to host the World Expo 2030. Additionally, FIFA is expected to confirm Saudi Arabia as the host of the 2034 World Cup.
“These wins were unexpected,” said Turab Saleem, a Saudi hospitality analyst at Knight Frank. “Now, all eyes—and funding—are on Riyadh. It’s a prime opportunity to showcase the city’s potential.”
PPPs: A Cornerstone of Vision 2030
Public-private partnerships (PPPs) are central to Saudi Arabia’s Vision 2030, which aims to diversify the economy and reduce reliance on oil revenue. Riyadh is leading this effort with multi-billion-dollar projects designed to transform the city into a global hub for business, tourism, and culture.
In 2023, the National Center for Privatization and PPP approved a pipeline of 200 projects across 17 sectors, with investments exceeding $50 billion. These projects include:
- Four airports
- Seven desalination plants
- Six wastewater treatment facilities
- Ten strategic water reservoirs
- A transit-oriented development in Mecca
Additionally, developers are now required to build essential infrastructure, such as roads, stormwater systems, and sewage, within their projects.
“We strive to be flexible within government regulations to maximize project utility and foster private-sector involvement,” AlWabely added. “Our goal is to keep PPPs motivated and engaged as we reshape Riyadh’s future.”
