Saudi Arabia and South Africa have signed agreements worth $5 billion in renewable energy, logistics, and infrastructure.
Over the past year, the two countries have intensified bilateral engagements, resulting in deal signings and investment discussions worth billions of dollars. This surge in cooperation forms part of the Gulf’s broader push into Africa, with Saudi Arabia and the United Arab Emirates leading the charge in renewable energy, mining, and agriculture.
Ruven Naidoo, head of mergers and acquisitions at Investec Bank Ltd., noted, “South Africa offers high-quality management, strong intellectual property, and well-run firms ripe for investment.”
Following a 2022 meeting between Saudi Crown Prince Mohammed bin Salman and South African President Cyril Ramaphosa, delegations from both nations have exchanged frequent visits.
These engagements have unlocked around $5 billion in renewable energy, real estate, logistics, and fuel infrastructure deals—some already signed and others still in progress. Responding to increased business traffic, South African Airways has begun evaluating the launch of a direct flight route between Riyadh and Johannesburg.
Chrispin Phiri, spokesperson for South Africa’s Ministry of International Relations, confirmed that “Saudi investment has grown exponentially.” Next month, South Africa’s trade minister will co-chair the 10th SA-Saudi Joint Economic Committee in Riyadh.
Meanwhile, Hussam Algheraimil, Saudi Arabia’s commercial attaché in Johannesburg, acknowledged the high-level collaboration, although he cautioned that bureaucratic processes and the lack of bilateral investment treaties pose challenges.
At the same time, Saudi Arabia faces fiscal tightening due to falling oil prices. Analysts expect the country’s sovereign wealth fund (PIF) to shift more capital toward domestic projects, possibly slowing foreign investments. Still, PIF-backed companies like ACWA Power and Red Sea Gateway Terminal International (RSGTI) continue to push into South Africa.
ACWA Power has already committed $1.9 billion to three renewable power plants and plans to invest an additional 7 billion rand ($378 million) in water and energy infrastructure over the next five years. Nandu Bhula, ACWA’s country manager in South Africa, said the company values the nation’s “policy stability, skilled banking system, and improving power supply.”
Meanwhile, RSGTI aims to acquire Durban’s port, sub-Saharan Africa’s largest, offering over $600 million pending legal dispute resolution. The company also expressed interest in Cape Town’s port if a tender arises. According to Gagan Seksaria, RSGTI’s director of global investment, “South African container terminals offer some of the most attractive investment opportunities globally.”
Other Saudi firms are pursuing major deals. The Zahid Group recently reopened talks to expand its stake in Barloworld Ltd., South Africa’s sole distributor of Caterpillar Inc. equipment, valuing the company at $1.25 billion.
Saudi Aramco is bidding for Shell Plc’s downstream gas stations, offering about $1 billion. Ajlan Bin Abdulaziz Al-Ajlan, a prominent Saudi investor, has pledged $500 million to establish a platinum smelter and refinery in Limpopo province.
In the telecom space, Saudi Telecom acquired 49% of CMC Networks South Africa last year. Meanwhile, the South Africa-Saudi Business Forum continues to meet with high-ranking officials.
Earlier this month, forum representatives held talks in Riyadh with Deputy Minister of Economic Planning Al-Baraa Al-Iskandarani, continuing the momentum from a February visit to South African institutions, including the Johannesburg Stock Exchange and the Industrial Development Corporation.
These efforts align with Vision 2030, Saudi Arabia’s strategy to diversify its economy beyond oil. Earlier this year, the Kingdom announced $41 billion in planned African investments by 2030, focusing on natural resources, food security, and renewable energy. These investments boost South Africa’s economy and strengthen regional links between Africa and the Gulf.
Stavros Nicolaou, co-chair of the Saudi-South Africa Business Forum, highlighted the long-term potential: “Saudi Arabia offers a fast-growing, complementary market, while South Africa provides policy stability and high-value sectors ready for investment.” In 2023 alone, South African exports to Saudi Arabia rose to 7.3 billion rand, up from 6.6 billion the previous year.
As both countries deepen their ties, Saudi Arabia’s strategic investments transform South Africa into a crucial partner in its economic diversification journey.
