Saudi wealth fund loses $8 billion, but Vision 2030 megaprojects continuing

Saudi Arabia's megaprojects appear to have taken a multi-billion-dollar hit, amid low oil prices, cost overruns, and investor uncertainty.

The Public Investment Fund (PIF) slashed the value of its investments in massive domestic infrastructures by $8 billion, with its holdings in energy giant Saudi Aramco also suffering this year.

Saudi Arabia's sovereign wealth fund, which oversees mega-projects such as NEOM, put the value of domestic infrastructure projects a $56 billion, a 14.5 percent decrease from last year.

Despite this, experts say the financial hit is expected given the scale of the projects.

"I don’t think [PIF] are too worried about it, of course it’s a colossal sum of money," Ana Nacvalovaite from Oxford University told the Financial Times, "but there will be some losses before we hit 2030."

Vision 2030 is a plan initiated by Crown Prince Mohammed bin Salman to wean the government of its reliance on fossil fuels for income and transform the economy into a modern and dynamic enterprise.

This includes the development of massive infrastructure projects to encourage foreign investment and grow the non-oil sector.

One of them is The Line, a 170km-long linear city that will be a hallmark of the NEOM gigaproject. However, due to lower oil prices than expected and cost overruns, the construction will likely be scaled down or completed at a slower rate.

The nearly $1 trillion PIF has been the primary vehicle for this domestic growth, as well as investing in foreign companies such as Tesla.

The PIF also has a stake in Saudi Aramco, one of the biggest companies in the world, with shares in the oil giant losing over 14 percent of their value this year.

Yet it has seen some successes, with Saudi Arabia's public relations improving globally, thanks to hosting a range of major sporting events such as the World Cup in 2034.