U.S. investment firm Blackstone recently unveiled a plan to launch a $40 billion investment vehicle aimed at rebuilding the nation’s aging infrastructure, to be anchored by a $20 billion contribution from Saudi Arabia’s Public Investment Fund (PIF).
Blackstone said the program will have $40 billion in total equity commitments in a permanent capital vehicle, including $20 billion to be raised from other investors. Blackstone anticipates it will invest $100 billion in infrastructure, most of it in the United States, when factoring in additional debt financing.
The investment vehicle would launch a new business for Blackstone with PIF as a strategic partner, the company said. Blackstone and the PIF signed a non-binding memorandum of understanding and the parties are continuing to negotiate the final terms of the agreement that has been a year in the making.
“There is broad agreement that the United States urgently needs to invest in its rapidly aging infrastructure,” Blackstone President Hamilton E. James said. “This will create well-paying American jobs and will lay the foundation for stronger long-term economic growth.”
An estimated $2 trillion is needed to improve U.S. infrastructure, which is graded D+ by the American Society of Civil Engineers.
President Donald Trump has prioritized the need to improve public infrastructure, stating that in too many cases, the nation roads, waterways, bridges, airports and mass transit systems have fallen into disrepair.
“This potential investment reflects our positive views around the ambitious infrastructure initiatives being undertaken in the United States as announced by President Trump, and the strategic opportunity for the Public Investment Fund to achieve long-term returns given historical investment shortfalls,” said H.E. Yasir Al Rumayyan, managing director of the Public Investment Fund of the Kingdom of Saudi Arabia.
Blackstone made the announcement on Saturday as President Donald Trump embarked on his first trip overseas, making the first stop of his eight-day trip in Saudi Arabia.