Russia and Saudi Arabia investing in the future

Kirill Dmitriev, CEO of the Russian Direct Investment Fund, about Saudi Arabia for Kommersant's Business Guide

The Custodian of the Two Holy Mosques, King Salman bin Abdulaziz of Saudi Arabia, is in Moscow on an official visit. The significance of the visit is apparent from the fact that it is the first visit to by a Saudi monarch to Russia in nearly 100 years. It hardly needs mention that the visit will turn a new leaf on bilateral relations.

Back in 1926, the Soviet Union became the first country in the world to acknowledge the sovereignty of Saudi Arabia and establish bilateral ties. Since then, the cooperation between Moscow and Riyadh has gone through different stages, the most active one having begun relatively recently. In 2015, the visit by Saudi Crown Prince Mohammed bin Salman to Russia and his subsequent meeting with Russian President Vladimir Putin had marked a turning point in the Saudi-Russia partnership. Today, Russia and Saudi Arabia play a pivotal role in making critical decisions on some of the key global issues.

The financial institutions of our countries also have an enormous investment potential. For the first time, the two oil-producing nations that are together responsible for over one-fourth of the global oil production have agreed to strengthen trade, economic and investment cooperation. And these are crucial agreements: following negotiations, the Russian Direct Investment Fund (RDIF) forged a partnership with the Public Investment Fund of Saudi Arabia (PIF), which allocated $10 billion to invest in Russian projects - the largest foreign direct investment yet in Russia.

RDIF has also concluded an agreement with another Saudi institution - the Saudi Arabian General Investment Fund (SAGIA) - to identify attractive investment opportunities in Saudi Arabia and beyond. The funds have so far executed and approved deals in transport infrastructure, industry, retail, logistics and other sectors in the Russian economy. More than 25 other projects with a total worth of more than $10 billion are under consideration.

Russia and Saudi Arabia were the driving force behind the OPEC+ agreement. Alexander Novak, the Russian Minister of Energy, and his Saudi counterpart, Khalid Abdulaziz Al Falih, played a crucial role in implementing the agreement.

The Russia-Saudi cooperation in the energy sector has the potential for further development. The Russian fund, PIF and Saudi Aramco, the largest Saudi oil-producing company, are currently in the process of setting up a joint fund. The purpose is to invest in Russian businesses, facilitate Russia's entry into the Middle Eastern market and enable it to forge partnerships with regional players.

The importance of the two countries' focus on strategic cooperation and partnership across a broad range of areas is monumental. This explains why we talk in terms of long-term initiatives. There is every reason to believe that the visit by the Saudi leaders to Russia will mark a milestone in bilateral relations and economic cooperation.