FinMin approves 2026 borrowing plan

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THE BIG STORY TODAY

Saudi taps USD 13 bn syndicated loan to shore up project financing

The Kingdom tapped bank financing in the first move under the government’s “deficit by design” phase. The National Debt Management Center lined up a USD 13 bn (SAR 48.8 bn), seven-year syndicated loan to fund utility and infrastructure projects, it said in a statement on Wednesday.

The borrowing follows the release of the FY 2026 budget, which pencils in a SAR 165 bn (USD 44 bn) deficit this year. Finance Minister Mohammed Al Jadaan also approved the Kingdom’s borrowing plan for the year yesterday, penciling in SAR 217 bn in financing requirements to cover the budget deficit and principal repayments for debts maturing in 2026.

The NDMC’s loan covers around 30% of the projected 2026 deficit, meeting near-term liquidity needs without rattling bond markets while helping keep yields steady before expected international issuance later this year.

IN CONTEXT- Updated 2025 figures show the deficit swelling to nearly SAR 245 bn (USD 65 bn) — more than double earlier estimates — as project spending accelerates and oil output trims revenues. The government is widening its funding toolkit as it prepares for a massive debt wall, with approximately USD 174.5 bn in fixed-income maturities coming due through 2030, of which the government accounts for USD 106.4 bn.

Deficit by design: Al Jadaan was explicit that the deficit is a policy choice, saying that the government is willing to sustain higher deficits through 2028 to invest in the economy and unlock private-sector growth, as long as returns exceed borrowing costs. Public debt is expected to reach SAR 1.62 in FY 2026 (32.7% of GDP), up from SAR 1.46 tn a year earlier.

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Saudi shifts from engineering gigaprojects to faster-growth sectors

Saudi Arabia’s gigaproject strategy is growing beyond engineering gigaprojects like Neom as the 2026-2030 investment roadmap takes shape. In 2025, the focus shifted toward AI, religious tourism, logistics, and mining — sectors that deliver faster returns — while Neom and similar developments increasingly function as long-term investments.

Background: When Vision 2030 was first unveiled in 2016, it was built on an engineering-first vision. Flagship gigaprojects such as Neom, The Line, and Oxagon were positioned as the backbone of economic transformation — massive, capital-intensive builds designed to reshape the economy over decades.

Public Investment Fund (PIF) Governor Yasir Al Rumayyan made it clear that Neom is no longer the sole center of gravity. The next phase of the strategy is structured around six priority “ecosystems” — tourism and entertainment, urban development, advanced manufacturing and innovation, industry and logistics, renewable energy — and, finally, Neom.

IN CONTEXT- While officials pushed back on reports in 2024 that Neom was being downsized, the project has since entered a “comprehensive review” under CEO Aiman Al Mudaifer. Some elements of the USD 500 bn Red Sea project may be delayed or scaled back, even as the broader vision holds.

Fiscal reality is changing priorities

This recalibration is being driven by fiscal pressure. Lower oil prices, rising borrowing, and a widening deficit have forced policymakers to reassess the pace of spending. Finance Minister Mohammed Al Jadaan was explicit in May, saying the government needs to “take stock” to avoid the economy “overheating.” He was clear that unchecked spending risks repeating the boom-and-bust cycles that historically followed periods of aggressive public spending.

This means moving away from an “all at once” buildout toward phased, flexible spending that can adjust to future oil prices and investment flows. Al Jadaan reinforced this position in October, saying Saudi Arabia “will not have any hesitation of actually changing” any strategy or project that fails to deliver results.

The construction recalibration

Saudi Arabia’s gigaproject spending fell to a five-year low in 2025. Contract awards dropped sharply, with just USD 8.5 bn awarded through November, compared with USD 29.3 bn in 2024 and a peak of USD 34.6 bn in 2023, according to Meed.

This shift is most visible at Neom, where work has been re-scoped into smaller, more manageable phases. Reports indicate that the initial buildout has narrowed from 20 modules to just three, while the urgency to award new civil works has cooled. Timelines are stretching as well, with gigaproject delivery increasingly moving beyond 2030 into the 2030–2040 window.

But the gigaprojects pipeline is still robust: Gigaproject contract awards rose 20% in the first eight months of 2025, driven by prioritization of developments linked to Expo 2030 and the 2034 Fifa World Cup. Several Neom components are still advancing, most notably the green hydrogen project, where 90% of construction has been completed across all sites.

2025 was not without new launches: PIF subsidiary Rua Al Haram Al Makki announced the King Salman Gate project in Makkah, along with plans for the USD 2 bn National Athletics Stadium at Qiddiya. In Riyadh, the Expo 2030 site also saw its first cranes arrive, marking the start of early works ahead of full operations in October 2030.

PIF disclosures further point to a deeper pipeline ahead. Several wholly owned subsidiaries hold unannounced gigaprojects, suggesting that additional developments may surface later in the cycle. More than USD 50 bn in packages are currently out to tender or under evaluation, with a further USD 47 bn in the prequalification stage.

The new champions

PIF plans to sharpen its 2026-2030 investment strategy around building a smaller group of portfolio companies into global champions in sectors including manufacturing, AI, and aviation. These sectors generate immediate GDP growth and employment once operational, unlike large-scale real estate and urban megaprojects that deliver returns over much longer timelines.

Humain is the new Aramco: Humain is the clear frontrunner in the new strategy, built on Saudi ultra-low-cost solar power to run AI data centers at a fraction of global costs. The goal is to position the country as a preferred hub for global model training and deployment. Humain aims to become the world’s third-largest computing capacity provider, behind the US and China, with plans to deploy 18k AI chips by 2026 and scale up to 400k by 2030.

… and it is moving fast: Just last week, Humain received its first shipment of Nvidia’s latest AI GPU chips, which will be deployed before next year, CEO Tareq Amin said on LinkedIn. Last month, the company partnered with STC’s Center3 to develop and operate up to 1 GW of AI-focused data centers. At the November US-Saudi Investment Forum, Humain also partnered with Cisco, AMD, and xAI to build a network of data centers in the Kingdom and across the Middle East.

ICYMI- We sat down with Amin in September to discuss the company’s ambitions for AI infrastructure in the Kingdom and their new Arabic-first generative AI product Humain Chat. He voiced Humain’s strategy to build 1.9 GW of new data center capacity by 2030 and scale that up to 6.6 GW by 2034.

On the industrial side, Alat has emerged as PIF’s flagship manufacturing platform. The company is tasked with driving non-oil GDP growth by 2030, highlighted by its USD 2 bn strategic partnership with Lenovo to establish a regional electronics manufacturing hub in Riyadh.

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Welfare reforms + a 24-hour Jeddah stopover

Higher living costs and a tightened welfare system is getting ink in the Financial Times, which is out with a piece on the General Authority of Media Regulation’s move to fine nine people and order the closure of their social media accounts. The authority did not specify the reasons behind the fines, but the human rights circle sees a link with criticism of recent welfare and social security benefit reforms. Media Minister Salman Al Dossary defended the authority’s decisions, saying these people were using “freedom of expression to create chaos in the media or electronic spheres.”

For airline pilot Mark Vanhoenacker, a well-spent 24-hour stopover in Jeddah was worth some ink in The New York Times, detailing his time in Al Balad, Suq Bab Makkah, and other spots in the city to eat and soak up the history.

Companies awarded mining licenses + M&A from Aslak, Alamar, Catrion

Saudi awards 172 mining sites in record exploration round

The Industry and Mineral Resources Ministry awarded licenses to 24 companies and consortia in the largest licensing round in its history covering 172 sites across Nabitah Al Duwayhi, Shukhaybarat As-Safra mineralized belts, it said in a statement on Wednesday.

More details: The round spans over 24k sq km across three mineralized belts, covering gold, copper, silver, zinc, and nickel, with those awarded committing more than SAR 671 mn in exploration spending over the first two years of their programs, with 76 sites advancing to multi-round public auctions.

Looking ahead: The tenth round will cover 13k sq km across Madinah, Makkah, Riyadh, Qassim, and Hail, with new sites extending existing mineralized belts. Additional exploration and investment prospects will be announced at the Future Minerals Forum in Riyadh as the Kingdom seeks to unlock its estimated SAR 9.4 tn in mineral wealth.

M&A from Aslak, Alamar, and Catrion

United Wire Factories Company (Aslak) sealed a share purchase agreement to acquire 40% of Al Raed Industrial Investment Company for SAR 92.8 mn via issuing new consideration shares to Al Raeda’s shareholders, according to a Tadawul disclosure. The company tapped Al Khair Capital as financial advisor. The agreement is valid for 270 days.

Post-acquisition, Aslak’s share capital will increase by 13.88% (about SAR 39 mn) to SAR 319.8 mn. Once completed, Al Raeda’s selling shareholders will hold a 12.19% stake in Aslak.

IN OTHER M&A NEWS-

Alamar Foods signed a SAR 85 mn sell purchase agreement to fully obtain Cravia Arabia — Five Guys brand’s operator — taking over 13 restaurants in the Kingdom. The transaction will be financed through shariah-compliant credit facilities. (Tadawul)
Catrion Catering Holding Company is increasing its aviation and catering footprint, signing a sale and purchase agreement to take over a 55% equity stake in Al Khalejiah Catering Company (AKCC). The transaction is valued at up to SAR 440.9 mn, which includes an initial SAR 315.2 mn payment and up to SAR 125.7 mn in performance-based earn-outs. Funded via internal resources and shariah-compliant facilities, the agreement also grants Catrion a call option to acquire an additional 15% of AKCC within the following three years. (Tadawul)

High-value funding rounds for DSShield, Rewaa, and Ballurah

Riyadh-based cybersecurity firm DSShield landed SAR 203 mn in a funding round by Merak Capital, according to a press release. The move aims to establish a clear pathway toward a future IPO. Since its inception by Siraj Marghalani (LinkedIn) in 2020, the company has executed cybersecurity projects valued at over SAR 1.5 bn.

IN OTHER STARTUP NEWS-

Homegrown Rewaa raised USD 45 mn in a series B funding round led by Wa’ed Ventures, Idrisi Ventures, and Unity Ventures. The round saw participation from Vision Ventures, RZM Investments, Sedco Capital, Saned Partners, Palm Ventures, and Abdulrahman Saleh Al Rajhi and Sons Company. The funds will help Rewaa ramp up its AI technologies to facilitate business management for SMEs and support retailers across the Kingdom. (Press release)
Falak Angels Network’s investment funneled an undisclosed amount into Ballurah to boost its growth strategy. Serving over 400 clients, the AI-powered technology platform helps corporates in the F&B sector to ramp up their profitability. (Press release)

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USD opens 2026 slightly higher, but after its worst annual drop since 2017

The USD opened 2026 with a modest rebound, doing little to repair the damage from last year. The USD index edged up 0.24% on Friday to 98.48, after closing out 2025 with a 9.5% drop — its steepest annual decline since 2017, Reuters reports.

The slide was driven by mounting unease over President Donald Trump’s trade war, surging US debt, and concerns about the independence of the Federal Reserve. “This has been one of the worst years for USD performance in the history of freefloating exchange rates,” Deutsche Bank’s George Saravelos told the Financial Times.

A rebound from a deep hole: The USD hit its low point in September, down 15% against major currencies after Trump launched his sweeping April tariffs. It has since rebounded by 2.5%, as US recession fears eased, though the recovery has been capped by the Fed’s resumption of interest rate cuts, which kept the currency under pressure.

AI saves the day — for now: Capital inflows into US equities tied to the AI boom have provided short-term support, with further investments expected this year — keeping US growth ahead of Europe’s. The reopening of the US government and the impact of recently passed tax cuts could give growth — and the USD — a lift in 1Q, according to Brandywine Global. However, that boost is likely to fade later in the year.

… but the future still looks grim: Markets expect the Fed to deliver two or three quarter-point rate cuts in 2026, while other central banks are expected to hold or tighten policy. The Fed will introduce three rate cuts in 1H 2026, Moody’s Analytics’ Chief Economist Mark Zandi told CNBC, citing a weakening labor market, political pressure, and inflation uncertainty. FX strategists continue to forecast a weaker USD through the year, according to a Reuters survey.

Germany’s fiscal stimulus, policy support in China, and improving eurozone growth are expected to narrow the US growth premium. “When the rest of the world is starting to look better in terms of growth, that’s favorable for the [USD] to continue to weaken,” Amundi’s Paresh Upadhyaya told Reuters.

A pivotal month ahead: Markets are closely watching Trump’s choice for the next Fed chair, expected this month, ahead of Jerome Powell’s term ending in May. Powell has been under fire from Trump for not cutting rates more aggressively, but a successor more receptive to White House pressure could weigh further on the currency. Short-term direction will also hinge on a heavy run of US data next week, including Friday’s payrolls report.

TASI	10,549	+0.6% (YTD: +0.6%)
MSCI Tadawul 30	1,393	+0.4% (YTD: +0.4%)
NomuC	23,519	+1.0% (YTD: +1.0%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.5% repo	4.0% reverse repo
EGX30	41,829	+0.3% (YTD: +0.3%)
ADX	9,995	0.0% (YTD: 0.0%)
DFM	6,114	+1.1% (YTD: +1.1%)
S&P 500	6,858	+0.2% (YTD: +0.2%)
FTSE 100	9,951	+0.2% (YTD: +0.2%)
Euro Stoxx 50	5,850	+1.0% (YTD: +1.0%)
Brent crude	USD 60.75	-0.2%
Natural gas (Nymex)	USD 3.62	-1.8%
Gold	USD 4,330	-0.3%
BTC	USD 91,293	+1.1% (YTD: +4.2%)
Sukuk/bond market index	920.12	+0.1% (YTD: +0.1%)
S&P MENA Bond & Sukuk	151.69	-0.1% (YTD: -0.1%)
VIX (Volatility Index)	14.51	-2.9% (YTD: -2.9%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.6% on Thursday on turnover of SAR 1.6 bn. The index is up 0.6% YTD.

In the green: Alkhaleej TRNG (+7.6%), CGS (+6.6%) and Abo Moati (+6.5%).

In the red: Naseej (-2.4%), Gasco (-1.8%) and Nama Chemicals (-1.3%).

THE CLOSING BELL: NOMU-

The NomuC rose 1.0% on Thursday on turnover of SAR 17.0 mn. The index is up 1.0% YTD.

In the green: Molan (+24.5%), Bena (+7.9%) and Hamad Bin Saedan Real Estate (+7.8%).

In the red: Mayar (-9.6%), Horizon Educational (-8.2%) and Riyal (-7.4%).

CALENDAR

JANUARY

10-18 January (Saturday-Sunday): Public school mid-year break.

13-15 January (Tuesday-Thursday): Future Minerals Forum, King Abdul Aziz International Conference Center, Riyadh.

15 January (Thursday): Title deed registration deadline for 31.7k properties in 14 neighborhoods in the Eastern Province.

15 January (Thursday): Title deed registration deadline for about 157.3k properties in 78 neighborhoods across the Eastern Province.

15 January (Thursday): Title deed registration deadline for about 41.7k properties across 115 neighborhoods in Riyadh, Qassim, and the Eastern Province.

18-21 January (Sunday-Wednesday): Saudi Hospital Design and Build Expo, Riyadh.

26-27 January (Monday-Tuesday): SuperReturn Saudi Arabia, Hotel Fairmont, Riyadh.

26-27 (Monday-Tuesday): GPRC Summit, Riyadh.

26-28 (Monday-Wednesday): Saudi Franchise Expo (SFE), Riyadh Exhibition and Convention Centre, Riyadh.

26-28 (Monday-Wednesday): Real Estate Future Forum, Four Seasons Hotel, Riyadh.

26-28 (Monday-Wednesday): IFAT Saudi Arabia, Riyadh Front Exhibition & Conference Center, Riyadh,

27-28 (Tuesday-Wednesday): SkyMove Air Cargo MENA, Riyadh.

28 (Wednesday): Data Center Nation Riyadh, Riyadh.

28-30 (Wednesday-Friday): Jeddah International Travel and Tourism Exhibition (JTTX), Jeddah.

FEBRUARY

2-4 (Monday-Wednesday): Saudi Media Forum, Riyadh.

2-4 (Monday-Wednesday): Women Leaders Summit and Awards KSA, Riyadh.

2-13 (Monday-Friday): 2026 Asian Road Cycling Championship and Paralympic Cycling, Qassim.

3-4 (Tuesday-Wednesday): RLC Global Forum Annual Meeting, Riyadh.

4 (Wednesday): Michelin Guide’s Restaurant Celebration, Four Seasons Hotel, Riyadh.

5-7 February (Thursday-Saturday): LIV Golf 2026 season opener, Riyadh Golf Club, Riyadh.

8-12 February (Sunday-Thursday): World Defense Show, Riyadh International Convention and Exhibition Center, Riyadh.

9-10 February (Monday-Tuesday): Global Games Show Riyadh 2026, Malf Hall, Riyadh.

9-14 February (Monday-Saturday): Asian Racing Conference, Crowne Plaza Riyadh RDC Hotel & Convention Centre, Riyadh.

11 (Wednesday) Digital Transformation Summit Saudi Arabia (DTS), Riyadh.

11-14 (Wednesday-Saturday): JeddaDerm, Jeddah.

13-14 February (Friday-Saturday): Jeddah E-Prix 2026, Jeddah.

15-17 February (Sunday-Tuesday): The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh Front & Exhibition Center.

16 February (Monday) King Salman Stadium design-and-build contract prequalification submission deadline.

22 February (Sunday): Founding Day.

26 February (Thursday): Title deed registration deadline for 142.8k properties across 104 neighborhoods in Hail.

MARCH

12 March (Thursday): Deadline for real estate registration for 253.2k properties in 499 neighborhoods across Riyadh, Qassim, Makkah, and Hail.

17-23 March (Tuesday-Monday): Eid Al-Fitr holiday.

21 March (Saturday): Fanatics Flag Football Classic, Kingdom Arena, Riyadh.

31 March (Tuesday): Zatca’s 23rd E-invoicing integration wave deadline.

APRIL

6 April (Monday): Procurement and Supply Chain Futures Forum, Al Faisaliah Hotel, Riyadh.

6-7 April (Monday-Tuesday): Real Estate Supply Chain Forum, Al Faisaliah Hotel, Riyadh.

12-15 April (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

13-16 April (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center – Malham.

20-22 April (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Al Faisaliah Hotel, Riyadh.

20-22 April (Monday-Wednesday): Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center.

21 April (Tuesday): GC Summit Saudi Arabia 2026, Saudi Arabia.

27-29 April (Monday-Wednesday): Aluminum Arabia, The Arena, Riyadh.

MAY

3-5 May (Sunday-Tuesday): Sports Investment Forum (SIF), Riyadh.

3-9 May (Sunday-Sunday): The Global Sustainability Expo, The Arena Riyadh Venue.

24-28 (Sunday-Thursday): Eid al-Adha holiday.

JUNE

21-24 June (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh Front Expo.

SEPTEMBER

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

OCTOBER

26-29 October (Monday-Thursday): World Energy Congress, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production in 2026.
November: UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia.
November: The Esports Nations Cup, Riyadh.
The Intervision international music competition will take place in Saudi Arabia.
6 July-23 August (Monday-Sunday): Esports World Cup, Riyadh.

Signposted to happen sometime in 2027:

The World Water Forum takes place in Riyadh.
The Ocean Race finishes in Amaala on the Red Sea.
Riyadh-Kudmi transmission line to be completed.

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.

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