| Risk#1 | • Limited liquidity in KSA financial ecosystem that are ready to participate in PSP projects |
| Potential impact | • High |
| Description | • Privatization and PPP initiatives' success depends on the ability and willingness of the private sector to invest in them. Since KSA offers many investment opportunities, privatization initiatives might suffer from liquidity shortage |
| Type | • General: since the liquidity scarcity issue is structural in the KSA ecosystem, the risk can impact transversally the VRPs requiring private investments |
| Risk mitigation measures | • Maintain privatization initiatives open to the international markets, to diversify capital inflows whenever sensible. Privatization investment attractiveness may be relatively higher in the international market. International equity and debt capital markets can therefore be leveraged to fund KSA privatization initiatives (if required, define additional financial de-risking measures -) • Consider phasing privatization efforts to avoid liquidity scarcity • Ensure implementation according to international best practice (i.e. bankable transactions) to increase international funds participation (i.e. debt and equity) |
| Entity responsible for the measures | • PSCs and ETs for taking the right strategic decisions to ensure attractiveness for the private sector. NCP and FSD VRP supporting by sharing best practices and advice • |
| Timeframe to implement these measures | • Privatization-specific measures: to be implemented case-by-case, depending on initiative-specific timeline and context |