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RIYADH: Public-private partnerships are becoming increasingly vital in ������Ƶ, as the Kingdom seeks to fast-track projects and sustain non-oil growth while avoiding pressure on the sovereign balance sheet, experts said.
Speaking to Arab News, Emilio El-Asmar, partner at Oliver Wyman’s Government and Public Institutions practice for India, the Middle East and Africa, said ������Ƶ’s PPP framework provides a clear channel for government support, making the Kingdom a bankable destination for international investors.
“In a volatile global environment, marked by tariff frictions and supply-chain shifts, ������Ƶ offers a predictable, rules-based market for FDI. Its PPP framework provides flexible procurement routes, enforceable contracts, and clear channels for targeted government support,” he said. “These features are making projects bankable for international investors and financiers.”
He noted that the government is also “showing skin in the game” through dedicated financing vehicles that add local currency depth and co-investment capacity, helping reduce financing friction and attract a wider pool of participants.
These elements, he said, make PPPs a practical tool to accelerate project delivery and sustain non-oil growth without overburdening public finances.
Under Vision 2030, ������Ƶ aims to lift the private sector’s share of gross domestic product from about 40 percent to 65 percent, using PPPs to mobilize capital and world-class operators while maintaining fiscal agility.
To support this, the Kingdom has introduced the PPP and Privatization Law, designed to provide transparency, accountability, and protections for stakeholders.
Finance Minister Mohammed Al-Jadaan said in February at the G20 Finance Ministers and Central Bank Governors Meeting that ������Ƶ has adopted a PPP model enabling private entities to partner with the government in developing and managing infrastructure projects. He highlighted initiatives such as the National Center for Privatization and the National Infrastructure Fund, which focus on drawing private investment in transport, water, and energy.
Yigit Saf, principal in the public sector practice at Arthur D. Little in the Middle East, said PPPs are facilitating activity in infrastructure and services such as education and health care, which are essential for workforce development.
“PPPs play a crucial role in three key ingredients of economic growth: investments, workforce development and productivity, while at the same time supporting public finances, and providing the government with a tool to manage, and shift away undesired strategic, operational and financial risks,” Saf said. He added that PPPs are increasingly bringing private sector dynamism into the Saudi economy.

Diversification Engine
El-Asmar said PPPs are becoming a driver of economic diversification, channeling investment into sectors well beyond hydrocarbons. ������Ƶ’s privatization pipeline includes more than 200 projects across 17 sectors, spanning airports, roads, water, health care, education and municipal services.
“This multisector flow builds what non-oil GDP needs most: logistics gateways, dependable utilities, and high-quality social infrastructure,” he said. “The payoff is broader revenue streams, new value chains and quality jobs, and a steadily rising private-sector share of GDP.”
Saf said PPPs help optimize public spending while shifting risks to the private sector, where they can be better managed. He noted that PPPs are already drawing strong investor appetite in areas like education, health care, and construction.
“We already observe substantial investor appetite for PPP projects in ������Ƶ from local and international players,” he said.
The expansion of Madinah airport is a case in point: capacity has grown from 5 million to 8 million passengers, with further expansion planned, while generating revenue for the government.
“Eventually, PPPs will contribute to the establishment of infrastructure for emerging sectors, foster innovation and technology transfer, enhance service delivery, and strengthen Saudi’s positioning in the global ecosystem through its PPP partnerships,” said Saf.
Sector Impact
El-Asmar said infrastructure will continue to see the biggest impact from PPPs. Water and wastewater are the most advanced areas, with desalination, strategic reservoirs, and sewage-treatment projects attracting international interest due to stable demand and clear offtake agreements.
He added: “Energy and power — especially renewables — are the next outsized growth drivers; as grid capacity expands, utility-scale solar and wind PPPs will deepen investor participation and free hydrocarbons for higher value uses.”
“Transport and logistics are also accelerating, with several airport privatizations complete and further concessions in the pipeline.”
He also pointed to new opportunities in ports, waste management, and municipal concessions such as logistics parks, which are widening investable options and multiplying non-oil value chains.

Challenges ahead
Despite the strong momentum, experts highlighted hurdles. El-Asmar said process timelines and bankability in some asset classes require attention. Multi-agency approvals and complex documentation can delay projects, he said, adding that “wider use of standardized templates, clearer roles within line ministry PPP units, and time-bound milestones can streamline those steps while preserving rigor.”
Saf noted that PPP success will hinge on clarity and stability of the project pipeline, access to bankable opportunities, and clear risk-sharing between public and private sectors.
He said more training and knowledge transfer programs are needed to develop local expertise in managing complex PPP projects.
He also flagged public skepticism about private sector involvement, stressing that awareness campaigns and transparent implementation are crucial. Limited competition among bidders, he said, can lead to higher costs and weaker outcomes, underscoring the need for international participation and open competition.
“By addressing these challenges and implementing the necessary reforms, ������Ƶ can create a thriving PPP ecosystem that attracts foreign investment, fosters private sector participation, and accelerates the country’s economic diversification goals,” Saf concluded.

RIYADH: The Saudi Exchange is proving resilient amid a global initial public offerings downturn, highlighting the strength and dynamism of its diverse issuer base. 

While traditional financial centers struggle, the Kingdom continues to attract listings, underscoring a potential shift in how and where global capital is deployed.

Across the US, Europe, and much of Asia, 2025 has seen subdued IPO activity, affected by volatile macroeconomic indicators, persistent inflation, and shifting investor sentiment. Could ������Ƶ’s divergence signal a broader reshaping of investor priorities and market leadership?

Equity markets showed early signs of recovery in the first quarter, but geopolitical tensions and tariff shocks in April disrupted momentum, prompting issuers to delay offerings and adopt a cautious stance, according to Haitham Aljabry, capital markets consulting partner at PwC Middle East.

In contrast, the Saudi Exchange is charting its own path. As of August 2025, 33 new listings have been completed across its main market, Nomu – parallel market, and sukuk and bonds market, bringing the total number of listed securities to more than 460.

“The Saudi Exchange’s resilience amid the global IPO slowdown underscores the strength and dynamism of our diverse issuer base,” Nasser Alajaji, chief of listing at the Saudi Exchange, told Arab News.

Alajaji added: “Recent listings from new sectors such as aviation and e-commerce have further deepened market breadth and enhanced its appeal.” 

He highlighted the launch of the Kingdom’s first ESG-focused exchange-traded fund and two corporate sukuk as signs of ongoing innovation aligned with the Financial Sector Development Program under Vision 2030.

“Global IPO activity paused, as some companies chose to delay their IPO processes due to the level of uncertainty associated with the various tariff announcements,” Aljabry explained. “However, the gradual reopening of selective IPO markets is now underway, with sentiment largely tied to macroeconomic and geopolitical stability.”

Aljabry said ������Ƶ’s sustained IPO performance reflects strong macroeconomic management, regulatory clarity, and ongoing reforms across sectors. The government’s commitment to economic diversification through megaprojects such as Neom and the Red Sea is bolstering investor confidence and stimulating activity across industries. Capital inflows have also remained consistent in 2025, supported by a stable riyal-dollar peg and ������Ƶ’s status as a regional safe haven amid wider geopolitical instability.

Structural advantages boosting Tadawul’s appeal
Tadawul offers structural advantages that distinguish it from global peers.

“Tadawul is the largest stock exchange in the MENA region by market capitalization. Its high free-float requirement ensures liquidity, and Tadawul’s inclusion and weighting in MSCI EM and FTSE indices boosts demand from passive global funds,” Ibrahim Soumrany, partner at Gibson Dunn in Riyadh, noted.

Soumrany also cited strong valuation premiums, robust institutional demand, and consistent oversubscription levels in retail tranches, with new listings often leaving individual investors with as few as ten shares. Additional drivers include state asset privatizations, Public Investment Fund divestments, and IPOs by large family conglomerates seeking succession planning and liquidity.

“The level of capital inflow into the Saudi market since the beginning of the year suggests that investors, both local and international, continue to view the Kingdom as a stable and growth-oriented investment destination, even as global capital markets remain cautious,” Aljabry said.

Regulatory momentum
Saudi capital markets benefit from a deepening institutional investor base and growing digital engagement, particularly among younger retail investors accessing equities via trading apps.

“The Saudi capital market continues to play a pivotal role in driving economic diversification and attracting global capital,” Alajaji said. “We continue to observe steady IPO activity across all our platforms… Investor demand remains robust, supported by a favorable regulatory environment and active participation from both institutional and retail investors.”

According to Aljabry, IPOs in ������Ƶ during 2025 have predominantly involved well-established or strategically significant companies aligned with Vision 2030, appealing to long-term investors. Despite fluctuations in crude oil prices, the Kingdom has attracted significant capital inflows, reflecting confidence in its long-term growth strategy and stable economic management.

In terms of liquidity and market-making, Saudi capital markets stand out. Soumrany emphasized that market-making regulations support tighter bid-ask spreads and consistent trading activity, enhancing the investor experience and reducing market volatility.

Further contributing to market dynamism is the growing role of Qualified Foreign Investors. As of August, over 4,400 QFIs were registered with the Saudi Exchange, highlighting rising international institutional interest, Alajaji told Arab News.

The evolution of environmental, social and governance and sustainability-linked products is also adding new dimensions to the market. Alajaji noted that the introduction of new asset classes and sustainability-driven instruments reflects the exchange’s commitment to long-term innovation.

Retail investor enthusiasm remains a key pillar. Soumrany noted: “High oversubscription levels in retail tranches. Retail investors are unlikely to receive more than 10 shares due to high oversubscription levels.” 

Some IPOs have been so oversubscribed that retail investors received only a fraction of their applications, demonstrating grassroots engagement in Saudi capital markets.

Outlook
Looking ahead, Aljabry believes the momentum of Saudi IPOs is unlikely to slow. With a predictable pipeline shaped by PIF exits, state divestments, and family business listings, the exchange is well-positioned to maintain its upward trajectory.

The alignment between economic diversification objectives and capital market development ensures that listings will continue to be both strategic and impactful. Soumrany said this alignment results in IPOs that are not only financially attractive but integral to the broader national transformation.

Tadawul’s strength amid global weakness underscores its evolution into a leading regional financial hub. As global investors seek resilient, growth-oriented markets, ������Ƶ is increasingly viewed as a compelling alternative to traditional financial centers. With robust infrastructure, regulatory foresight, and strategic positioning, the Kingdom is not just weathering the global IPO slump — it is defining a new benchmark for emerging-market exchanges.