Abeer Hommadi

Saudi Arabia and other Gulf states are shifting from primarily government-funded infrastructure toward blended financing involving development banks, sovereign investors, commercial lenders and institutional capital. Renewable energy, digital networks, healthcare, education and water systems are identified as major growth areas. AIIB official Saud Alsayyari says stable regulations, standardized contracts, credit enhancements and strong environmental and social standards are needed to attract pension funds and insurers. Regional infrastructure funds and projects such as Oman’s Ibri II solar plant and Saudi desalination upgrades illustrate how risk-sharing and modernization can turn large projects into long-term investable assets.

The IMF projects Saudi Arabia’s GDP will grow 5.5% in 2027 after a slowdown to 1.7% in 2026 caused by regional conflict and shipping disruptions. Economists attribute the expected recovery to stronger oil and non-oil activity, sound public finances, foreign-asset reserves, diversified export routes, infrastructure and continued Vision 2030 investment. Tourism, construction, logistics, manufacturing, technology, artificial intelligence and financial services are expected to benefit, while a deeper debt market and active IPO market should support further domestic and foreign investment.

Saudi Arabia’s economy is expanding through non-oil activity and Vision 2030 investment, but the TASI remains concentrated in energy and banking and has traded largely between 10,000 and 11,000 points. Analysts say the market needs broader sector representation, stronger corporate earnings, more high-quality listings, deeper liquidity and additional products such as ETFs and derivatives. Technology, tourism, healthcare, logistics, industry and mining are expected to become more important as major projects move into commercial operation. The transformation’s impact on earnings may become clearer in the second half of 2026 and through 2027.

Saudi Arabia repurchased short‑dated government sukuk worth 17.1 billion riyals and issued 17.2 billion riyals in new, longer‑maturity tranches extending to 2041 to reduce refinancing risk and improve fiscal sustainability. The restructuring increases the average maturity of public debt, enhances investor confidence, and supports development of the domestic sukuk market by helping complete the yield curve and providing longer‑term instruments for institutional investors. The move aligns with national financial sector development goals and contributes to a more balanced and efficient government debt portfolio.

Saudi Arabia has designated ACWA Power as the exclusive exporter of green hydrogen and its derivatives while assigning it additional roles in renewable electricity generation and transmission. The decision strengthens the Kingdom’s low‑carbon strategy, anchored by the NEOM Green Hydrogen Project, which is set to begin exports in 2027. Expert commentary highlights the company’s scale, the competitiveness of Saudi renewable resources, and Europe’s role as the primary future market. Continued investment in infrastructure such as transport, storage and electrolysis is deemed essential for expanding production and securing Saudi Arabia’s position as a major supplier of clean energy.