Saudi Arabia is preparing to launch its first sovereign wealth fund to manage budget surpluses from a rise in crude prices estimated at hundreds of billions of riyals every year.

The Shoura Council is due to discuss a draft law for the National Reserve Fund in meetings scheduled for Monday and Tuesday in Riyadh, the Saudi Press Agency reported.

The fund will be tasked with investing state reserves “to assure the Kingdom’s financial stability,” said Saad Al-Mareq, chairman of the financial affairs committee at the consultative body.

According to the draft law, the fund will start with capital representing 30 percent of budgetary surpluses accumulated over the years. Riyadh has built up significant foreign currency reserves because of rises in the price of crude oil on the international market.

There are no official figures available, but financial experts estimate its combined assets at around $700 billion (515 billion euros). In the past three years alone, the Kingdom has announced budget surpluses totaling some $232 billion.

Economist Ehsan Buhulaiga, a former Shoura member, said the fund proposal was presented to the council about 15 years ago. “We hope this time the Shoura would approve the fund considering its significant role in stabilizing the national budget in future,” he told Arab News.

He said Saudi Arabia had budget deficits for 25 years before the hike in oil prices. “The accumulated deficits were equivalent to the gross domestic product and this sovereign fund would help save Saudi Arabia from going through such an experience in future when oil revenues decline.”

The draft law said 20 percent of surplus budget would be added to the fund every year in addition to revenues from privatization of public sectors and the fund’s investments. “No money will be withdrawn from the fund except it was extremely necessary for higher state interests and a royal decree shall be required for it,” the law said.