Major Saudi Arabian entities, including the Public Investment Fund (PIF), Aramco, and the Saudi Electricity Company (SEC), are increasingly relying on capital markets, with debt issuances outpacing equity fundraising by three times since 2020.
Key Takeaways on Saudi Debt and Investment
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Debt Dominates: From 2020 through the first half of 2025 (H1 2025), Saudi Arabia raised over SAR 370 billion ($99 billion) in debt, compared to only SAR 104 billion from equity, according to Moody’s Ratings. Debt issuances alone topped $15 billion in H1 2025.
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Top Debt Issuers: Energy (led by Aramco), the PIF, and utilities (like SEC) are the top sectors driving the debt trend. For example, Aramco recently raised $3 billion through sukuk (Islamic bonds) in September, following a $5 billion bond raise in May. SEC raised $2.75 billion in February.
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PIF’s Role: The nearly $1 trillion PIF is a massive driver of this activity, having invested over SAR 642 billion in five years to strengthen and create non-oil sectors (e.g., retail, aerospace, technology) as part of Vision 2030. The PIF is projected to ramp up its investments to SAR 1 trillion between 2025 and 2030. To fund this, the PIF uses a diversified model that includes loans and, most recently, tapping international markets, such as its recent €1.65 billion green bond.
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Investment-Driven Debt: The overall increase in corporate debt is linked to strong growth in sectors like real estate, manufacturing, and services. Companies are taking on debt to fund capacity expansion, infrastructure development, and technology enhancements to seize new business opportunities.
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Rising Government Debt: The need to fund Vision 2030 initiatives, coupled with lower oil prices, is expected to increase sovereign debt. Saudi Arabia is facing fiscal deficits (projected at around 5% this year) and its debt-to-GDP ratio is forecasted to rise from 26% (2024) to 36% by 2030. This may cause the kingdom’s debt burden to rise above its peer nations.
