Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, has signed an agreement to invest up to US$10 billion in Russia according to the Russian Direct Investment Fund (RDIF).

 

The majority of the investment will be committed to agricultural projects with the remaining balance spent on medicine, logistics, real estate, and the retail sector.

 

Russia will in turn be investing in Saudi Arabia. “The key investments will take place on Russian territory,” said RDIF chief, Kirill Dmitriev, “but we will also invest in Saudi Arabia, which we consider a very promising market.”

 

The RDIF has signed an additional agreement with a second Saudi Arabian sovereign wealth fund, the Saudi Arabian General Investment Authority, through which both countries will pursue mutual investment opportunities in Saudi Arabia and across other countries in the Middle East.

 

The deal is seemingly part of a strategy on the part of Russia to replace funding from the West which has been lost due to sanctions. After a sustained political standoff, and facing a looming recession, Russia has said it will turn to Asia for new investments to reduce its reliance on investments from the U.S. and Europe. In May Russia signed $25 billion worth of deals with Chinese banks for investments in Russian companies, however there has been no transfer of capital as of yet.

 

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