The Saudi Arabian government is set to invest 10 billion dollars in Russia in a sign of reconciliation between the two countries.
Russian Direct Investment Fund Director, Kirill Dmitriev, told state media that the investment would cover a broad range of areas from agriculture and infrastructure to pharmaceuticals and retail over five years.
He hailed the deal, which was initiated in June at Russia’s annual economic forum in St Petersburg, as being one of the largest of its kind in the world.
Report says Riyadh is making the investment in several stages via its sovereign Public Investment Fund.
Relations between Russia and Saudi Arabia have been frosty since the Soviet era, especially during the Soviet invasion of Afghanistan when the Saudis supported the Mujahideen rebels.
In recent years, Russia and Saudi Arabia, which is a major U.S. ally in the Middle East, have backed opposing sides in Syria’s civil war.
Russia also maintained strong relations with Iran, one of Saudi Arabia’s biggest rivals.
But after the ascension of Saudi Arabia’s King Salman to the throne in January relations have taken a markedly positive turn.
Saudi Arabia was concerned about Iran’s regional role if world powers agreed to lift sanctions over Tehran’s nuclear programme.
It is happy to show the U.S. that they have options and could branch out and be friends with Moscow.
Russia over the past year has turned its economic focus to Asia and the Middle East as it struggles with tit-for-tat sanctions with the West over the Ukraine conflict.