In a major step forward towards opening up its education sector for foreign investment, Saudi Arabia has announced an ambitious partnership between GEMS Education and Hassana Investment Company, the investment arm of the General Organization for Social Insurance “GOSI”. The program is the first of its kind in Saudi Arabia and aims to develop a network of schools across the Kingdom.
Suliman Abdulrahman Al-Gwaiz, Governor of GOSI and Saad Al-Fadhli, CEO of Hassana together with Sunny Varkey, Founder of GEMS Education and Dino Varkey, CEO of GEMS Education, signed the MOU on the sidelines of the Future Investment Initiative (FII).
The partnership will target investments of up to SAR 3.0 billion over the next decade. At capacity, the network of schools will provide places for up to 130,000 students and employment opportunities for up to 16,000 people, of which approximately 40 percent will be Saudi citizens. The partners intend to develop the network by acquiring and upgrading existing schools alongside implementing a program of construction of new schools.
GEMS Education and Hassana Investment Company’s investment will be a first of its kind in Saudi Arabia following recent changes to regulations in the Kingdom permitting foreign ownership and operation of schools in the Kingdom.
This is in addition to a backdrop of advancing economic reforms in the Kingdom. This year, Saudi Arabia achieved its best progress in the WEF Global Competitiveness index since 2012, moving to 39 of 140 economies. In addition, the World Bank ranked Saudi Arabia 2nd amongst the G20 countries in implementing economic reform. Opening the education sector for this scale of investment will ensure this progress continues at pace.
The Kingdom’s investment attraction and promotion strategy has accelerated under the banner of “INVEST SAUDI”, a new initiative launched as part of the National Transformation Plan (NTP). INVEST SAUDI aims to identify, develop and market the significant opportunities that Saudi Arabia has to offer for international, regional and local investors, across all sectors.
At the launch of the partnership, Majed Al Mutairi, CEO of GEMS Education, KSA said, “GEMS Education is honoured to be among the first educational providers to partner in the opening up of Saudi Arabia’s education sector to foreign investment. As the world’s largest K-12 private education providers, we will focus on supporting the goals of Saudi Arabia’s Vision 2030 in developing human capital through a world-class network of schools that will contribute to long-term positive change for Saudi citizens.
He added, “Investing in education will help nurture young people with a global perspective that is strongly rooted in the Kingdom’s culture. GEMS Education, founded 60 years ago, can significantly contribute to this journey by leveraging its strong regional presence, cultural awareness and international reach. We are driven by a single purpose to put a quality education within the reach of every child.”
Saad Al-Fadhli, CEO of Hassana, set out the rationale for the program: “This partnership is driven by our view that the education market in Saudi Arabia is one of the most attractive growth markets over the long-term. Benefiting from Hassana’s role as a long-term, financial and strategic institutional investor and GEMS’ international expertise, both partners expect to create a strong, innovative and successful education platform in Saudi Arabia.”
The GEMS Hassana education program will play a key role in delivering the goals of the Saudi National Character Enrichment Program, with a strong emphasis on national identity, global citizenship, individual development and personal enrichment.
The Kingdom’s investment attraction and promotion strategy is accelerating under the INVEST SAUDI initiative, in line with the objectives of Vision 2030. It seeks to support and build awareness of the significant opportunities that Saudi Arabia offers to international, regional and local investors, led by the Saudi Arabian General Investment Authority (SAGIA) in collaboration with partners across government. Under INVEST SAUDI, FDI growth in the first half of 2018 expanded 90 percent versus same period last year, with the number of licenses nearly doubling by end of the third quarter.
GEMS started in Dubai nearly 60 years ago and is today one of the world’s largest operators of kindergarten to Grade 12 schools. It is unique in offering excellent education at all fee levels, from affordable schools to some of the most innovative premium schools in the world. That has given GEMS a deep understanding of the culture and values of the Middle East.
Mohammed I. Alsubeaei & Sons Investment Company )MASIC) have signed an MOU with GEMS Education early this year to co-invest in this program alongside GEMS Education.
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