Middle East sovereign wealth funds recycle petrodollars into global infrastructure


Posted on 10/6/2021

As natural gas and oil prices rise in part due to global inflation brought about by central banks’ massive quantitative easing of the COVID response and unprecedented fiscal stimulus, the coffers of state oil funds in the Middle East are being replenished. This is a sharp reversal from when oil was selling around $ 20 a barrel. As SWF coffers fill up and stuck in a low-yielding world, Gulf government investors are recycling cash into global infrastructure investments. For example, the Abu Dhabi Investment Authority (ADIA) is participating in the WestConnex concession in Australia through its Tawreed unit. Part of the infrastructure in demand is the infrastructure for renewable energies. Some sovereign investors are interested in investing in the energy transition of climate change. In some cases, battery-powered renewable projects begin to compete with fossil fuels to provide some level of on-demand electricity generation.

ADIA is also an investor in the INA Infrastructure Investment Platform, an Indonesian infrastructure investment platform.

Not all government investors plan to invest directly or collectively in infrastructure investments. Some government investors continue to prefer infrastructure funds.

Middle East Sovereign Wealth Funds direct investments in infrastructure and energy

SWFI.com query
Deal and new security. Buyer type: sovereign wealth fund. Sectors: infrastructure and energy. Buyer regions: Middle East.

According to SWFI’s Global Asset Owner Survey, private infrastructure remains an important overweight metric for future asset allocation (over the next 12 months) for many respondents in many of the most recent survey results.

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