The Private Sector Partnership Reinforcement Program 'Shareek' is an innovative collaborative program between the government and private sectors in the Kingdom of Saudi Arabia. It focuses on long-term projects and investments to accelerate the growth of business opportunities and enhance the contribution of national companies to the sustainable growth of the national economy. The program was launched by His Royal Highness Prince Mohammed Bin Salman Bin Abdulaziz Al Saud, crown prince, prime minister, and chairman of the Council of Economic and Development Affairs, on March 30, 2021.
On February 28, 2023, the Council of Ministers issued a resolution to transform the Private Sector Partnership Reinforcement Program (Shareek) into a center named the Private Sector Partnership Reinforcement Program Center (Shareek) and approved the organizational arrangements for the center.
Private Sector Partnership Reinforcement Program 'Shareek' role in developing the Saudi economy
The Private Sector Partnership Reinforcement Program 'Shareek' aims to expedite the enhancement of the Kingdom's economic flexibility, support sustainable growth, and assist the private sector in achieving its investment objectives. The program is a long-term investment in the Saudi economy and serves as a model for a vital private sector, which the Kingdom designates as a top national priority given its vital role. The private sector is a key partner for the government sector in realizing development plans and advancing the Saudi economy in line with the objectives of Saudi Vision 2030.
During the program's launch in 2021, Prince Mohammed Bin Salman Bin Abdulaziz stated, "Building a vibrant and prosperous private sector is a national priority for the Kingdom, and today we are initiating a new era that is more powerful in terms of collaboration and partnership between the public and private sectors by announcing the Private Sector Partnership Reinforcement Program (Shareek) to support and enable local companies to access domestic investments totaling up to SAR5 trillion by the end of 2030."
The Kingdom is fostering investments by injecting SAR3 trillion through the Public Investment Fund (PIF) until 2030, in addition to SAR4 trillion to be injected under the National Investment Strategy. Furthermore, there is an additional SAR5 trillion increase in local investments for private sector companies targeted by the Shareek Program. This aims to make the total investments in the Saudi economy reach SAR12 trillion by 2030, in addition to the government spending of SAR10 trillion and the expected private consumption expenditure of around SAR5 trillion. This will result in a total expenditure of SAR27 trillion in the Kingdom over the next ten years.
Investments injected by the private sector, with the support of the Shareek Program, will provide hundreds of thousands of new jobs. This will also increase the private sector's contribution to the gross domestic product (GDP), aligning with the objectives outlined in Saudi Vision 2030.
Large Companies Investment Committee in 'Shareek' program
The Private Sector Partnership Reinforcement Program 'Shareek' is a driving force for big companies, listed and unlisted in the stock market. An investment committee was formed to oversee the program and hire experts to ensure the success of its implementation, chaired by Prince Mohammed Bin Salman and with a number of ministers as members. On August 3, 2021, the Crown Prince held the first meeting with private sector representatives after the program was launched.
'Shareek' program support of private sector investments
The Private Sector Partnership Reinforcement Program 'Shareek' aims to increase local investments in private sector companies to reach SAR5 trillion by 2030. It also aims to provide hundreds of thousands of new job opportunities and offer support to these companies through financial, cash, operational, regulatory, and asset investment cooperation. The program accelerates investment plans for large companies and aims for the private sector to contribute to 65 percent of GDP.
Targets of the Private Sector Partnership Reinforcement Program 'Shareek'
The Private Sector Partnership Reinforcement Program 'Shareek' aims to add SAR2 trillion to the GDP by 2025, raise the Kingdom's GDP to be ranked fifteenth internationally, create an effective partnership with the private sector, offer tailored support to each company in the program, and foster long-term collaboration between the public and private sectors as per local and international policies and laws. Additionally, Shareek aims to boost economic diversity, offer job opportunities to citizens in large and emerging sectors, and instill trust in the Kingdom's investment ecosystem.
Conditions for companies to join 'Shareek' program
The Private Sector Partnership Reinforcement Program 'Shareek' has established conditions for large companies to qualify for participation, including demonstrating the company's ability to invest a minimum of SAR10 billion over ten years, having the intention to go public, and having a project size not less than SAR200 million in capital expenditures.
The program also allows eligible local companies to benefit from government support to accelerate their investment plans and achieve long-term ambitions. Government support includes regulatory, finance, and operational affairs, asset investment, and building partnerships.
Currently, the program is open exclusively to major national private companies with projects that will have a significant impact on the national economy as a whole. However, this will have a positive impact on the private sector and SMEs by leveraging new projects being implemented. It will also assist global companies in securing opportunities for collaboration with the Saudi private sector and benefiting from new investment opportunities in the future.
Support for large companies is individually assessed, taking into consideration several factors such as job creation, infrastructure development, and the company's investment history.
For requests from private companies submitted through banks, the 'Shareek' program reviews these requests. If accepted, a collaborative meeting is arranged between 'Shareek' and the private companies. During this meeting, companies present their investment plans according to a predefined model. Once a company is admitted to the program, the project and required incentives are meticulously reviewed to ensure that they are appropriate and practical. This process aims to verify the benefit of the company's investment plan.
Entities involved in 'Shareek' program
The Private Sector Partnership Reinforcement Program 'Shareek' includes several entities to assess and review the incentives requested by companies participating in the program. These entities include the Public Investment Fund, the Ministry of Finance, the Ministry of Transport and Logistics Services, the Ministry of Energy, the Ministry of Commerce, the Ministry of Human Resources and Social Development, the Ministry of Health, the Zakat, Tax, and Customs Authority, the Saudi Industrial Development Fund, the Local Content and Government Procurement Authority, the Capital Market Authority, the Saudi Central Bank, the Ministry of Industry and Mineral Resources, and the Ministry of Environment, Water, and Agriculture.
Related quizzes
