Saudi Arabia’s sovereign wealth fund has taken out a massive loan.
The Public Investment Fund (PIF) said on Monday that it had completed its first round of commercial borrowing – a syndicated loan valued at $11 billion. It did not detail which banks were involved.
The PIF said the loan was larger than initially anticipated due to “strong interest and favorable pricing” and the cash will be used for “general corporate purposes.”
The fund has already committed significant amounts of cash to new investments around the world, since it launched in 2017.
Tesla CEO Elon Musk said last month the fund had purchased a nearly 5 percent stake in the electric automaker, before becoming the centerpiece of a debacle regarding Musk’s consideration to take his company private.
On Monday, Reuters reported that the PIF had invested $1 million in Tesla rival Lucid Motors, which is planning to launch its first electric vehicle in 2020.
The PIF invested $3.5 billion in ride-sharing company Uber last year and has committed tens of billions to a Blackstone Group-managed U.S. infrastructure fund.
Saudi Arabia’s PIF is a centerpiece of its initiative to modernize the kingdom’s economy. The comprehensive plan, known as Vision 2030, was laid out in April by the country’s leaders and involves transferring 5 percent of state-owned Saudi Aramco to the investment fund through an initial public offering (IPO), expected to be the largest in history.
The Aramco IPO could attract a $2 trillion valuation. The kingdom is expecting to raise $100 billion to invest in companies around the world. The IPO, originally planned for 2018, has been postponed for the time being.
The idea is that revenue generated from these investments can be used to sustain its budget even when oil prices, or supply, are low.