PIF steps in to save construction again

PIF steps in to save construction again

With the contractor finance programme, the PIF and the National Infrastructure Fund aim to improve cashflows for the construction sector

Saudi Arabia’s Public Investment Fund (PIF) has stepped in to save the kingdom’s construction sector for the second year running, demonstrating the strategic importance of the industry as Riyadh drives progress on its Vision 2030 projects.Almost a year ago to the day in 2023, the PIF announced that it had invested $1.3bn in four local construction companies to support the handling of projects across the kingdom. It acquired new shares in AlBawani Holding Company, Almabani General Contractors Company, El Seif Engineering Contracting Company and Nesma & Partners Contracting Company.Buying into a quartet of industry heavyweights to increase market capacity was only the start. This year, PIF has announced an initiative that aims to resolve an age-old problem for construction companies: Cashflow.Effective cash flow management is crucial for contractors because there are large upfront project costs and long payment cycles. The cuts in capital expenditure and subsequent slowdown in project activity following the collapse in oil prices in late 2014 resulted in most contractors in the region enduring cashflow problems, and many of those issues remain today. The financial strain of waiting for