Saudi Arabia’s ROSHN Group is seeking investors for its Aramco Stadium in Al Khobar, Saudi Arabia, a 2034 FIFA World Cup™ venue as the State-backed developer looks to free up capital to deliver projects for the Kingdom’s economic transformation strategy.
The ROSHN Group and the Public Investment Fund are trying to tap into private investors’ appetite as Saudi Arabia is struggling with its flagship projects attributed to overspending and lower-than-anticipated global oil prices.
‘Reuters’ stated that as the Saudi Government works to plug a widening budget deficit the public entities are increasingly tapping outside capital to help fund the logistics, tourism and sports projects meant to cut the economy’s reliance on oil and gas revenue.
Riyadh (Saudi Arabia)-based the ROSHN Group is the leading national multiasset real estate developer contributing to reshaping the urban landscape by developing vibrant, human-centric, integrated destinations.
The 2034 FIFA World Cup™ will be the 25th FIFA World Cup™, a quadrennial international football tournament contested by the Men’s national teams of the member associations of FIFA. In December 2024, Saudi Arabia was formally confirmed as the host nation by FIFA following an uncontested bidding process. It will be the third tournament hosted in Asia after South Korea and Japan in 2002 and Qatar in 2022 and the third in the Arab world after Qatar in 2022 and Morocco in 2030. Saudi Arabia will be the second host nation from the Arabian Peninsula in the span of 12 years.
The 47,000-seat Aramco Stadium is an under-construction multipurpose stadium located in the North of Khobar, Saudi Arabia. The stadium will be owned by the ROSHN Group and will be operated by the Saudi Aramco serving as the home stadium for the Al-Qadsiah FC which plays in the Saudi Pro League, the top-tier professional association football league in Saudi Arabia.
The Saudi Aramco, officially the Saudi Arabian Oil Company, is a majority State-owned petroleum and natural gas company and the national oil company of Saudi Arabia. As of 2024, it is the fourth-largest company in the world by revenue and is headquartered in Dhahran.
Private Investor Appetite
‘Reuters’ further stated that ROSHN, which is owned by the $1.2 trillion sovereign wealth fund – the Public Investment Fund (PIF) – has hired J.P. Morgan to run the equity fundraising process, said two sources on condition of anonymity because the matter is not public.
The third source said PIF and ROSHN have been testing private investors’ appetite for the stadium.
The Public Investment Fund (PIF) is the sovereign wealth fund of Saudi Arabia. It is among the largest sovereign wealth funds in the world with total estimated assets of US$900 billion. It was created in 1971 for the purpose of investing funds on behalf of the Government of Saudi Arabia. The wealth fund has Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler since 2015, as its Chairman.
New York (US)-based J.P. Morgan is a leader in financial services offering solutions to clients in more than 100 countries with one of the most comprehensive global product platforms available. J.P. Morgan has been helping its clients to do business and manage their wealth for more than 200 years. Their business has been built upon their core principle of putting the clients’ interests first.
Pipeline Deals
The Aramco Stadium is set to be completed by the end of this year and host its first game in January.
The Saudi Aramco, the State oil giant, operates the stadium under a 25-year concession with ROSHN as the owner and developer of the project.
Lease-Leaseback Structure
The transaction being pursued by ROSHN is expected to follow a lease and leaseback structure, the sources said.
The similar infrastructure fundraising deals used by Aramco for its oil and gas pipeline assets have attracted the investors including the EIG Global Energy Partners (an American investment firm headquartered in Washington, D.C.) and the Global Infrastructure Partners (an American infrastructure investment fund), part of BlackRock (the world’s largest Asset Manager based in New York).
Vehicle
Under the model ROSHN would establish a vehicle to control the leasehold that it would co-own with the investors who would provide funds upfront.
Fresh Funding
The transaction would inject fresh funding from the investors into the project while freeing up capital for ROSHN to deploy its funds elsewhere. The investors, in turn, would receive a long-term income stream in the form of a share of the lease payments from Aramco.
Flagship Projects
Under the Vision 2030 economic overhaul plan the PIF has invested heavily in sports including in Formula E, boxing, tennis, e-sports, as well as soccer.
The 2034 World Cup is a marquee event for the Kingdom and a top priority for its economic transformation plan.
Riyadh is working to build or renovate 15 stadiums across five cities for the tournament including the 47,000-seat Aramco Stadium in the Eastern city of Al Khobar as well as 132 training venues.
The Saudi Vision 2030 is an ambitious strategic framework and a Government initiative launched in 2016 by the Saudi Crown Prince Mohammed bin Salman. Its primary goal is to diversify the Kingdom’s economy, society and culture thus reducing its longstanding dependency on oil and developing a sustainable, knowledge-based economy.
Unique Challenges
The 2034 competition will mark the first time a single nation hosts the expanded 48-team format which Saudi Arabia’s Sports Minister Prince Abdulaziz bin Turki AlFaisal said presented unique challenges.
But overspending and lower-than-anticipated global oil prices that have throttled the State revenues have left Saudi Arabia struggling to deliver some of its flagship projects.
Trojena, for example, a showpiece mountain resort part of the NEOM desert mega city, was originally set to host the 2029 Asian Winter Games but has faced delays.
NEOM is a massive $500 billion futuristic megaproject in Saudi Arabia’s Tabuk province spearheaded by Crown Prince Mohammed bin Salman to diversify the Kingdom’s economy away from oil.
Riyadh is now hoping the private investors can step in and help take up some of the shortfall and a deal for the Aramco Stadium would not be the first transaction involving the Saudi-owned sports assets.
Privatization Drive
The Kingdom Holding Company signed an agreement in April to acquire a 70% stake in the Saudi Pro League soccer club Al Hilal from the PIF. An American investor took over the smaller club Al Kholood last year as part of a wider privatization drive.
It was reported in May that the PIF was in talks with the investors over them taking a minority stake in the Premier League team Newcastle United F.C. (UK) as part of its fundraising plans for the club’s stadium.
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