Kirill Dmitriev, CEO of RDIF, said Deputy Crown Prince Mohammed bin Salman, second deputy premier and defense minister, had played an immense role of support in sealing the deal.

The prince visited St. Petersburg with a large delegation during the economic forum and took part in President Vladimir Putin’s meeting with global investment fund heads.

Top economic dailies such as Wall Street Journal and Financial Times (FT) gave wide coverage to the investment plan on Tuesday.

Explaining the significance of the deal, John Sfakianakis, Middle East director at Ashmore Group, told Arab News: “It’s strategically wise from a diversification point of view for Saudi Arabia to explore other investment destinations.”

Fawaz H. Alfawaz, a Riyadh-based economic consultant, said: PIF is embarking on a new strategy with PIF acting as a sovereign fund while its history has been that of government domestic investment arm. Traditionally, the foreign investment has been done by SAMA (Saudi Arabian Monetary Agency).”

According to Russian media, the majority of Saudi investment will be made on Russia’s agricultural projects, as well as on medicine, logistics and the retail and real estate sectors.

Commenting further on the deal that was initiated with a memorandum of understanding during the St. Petersburg Economic Forum, Sfakianakis said: “Russia is a very important economy, in 2014 the tenth largest, that can’t be ignored, and within the larger Eurasian context of paramount importance.”

He added: “In the areas of infrastructure, logistics and agriculture, Russia offers vast expertise and opportunities. As of 2013, Russians spent 60 percent of their pretax income on shopping, the highest percentage in Europe.”

Sfakianakis said: “Others from the Gulf have invested in Russia in a direct government-to-government context recently. China and South Korea have established important investment and trading ties which can’t be ignored.”

He said: “Investment ties are always the best way for establishing a bridge of friendship and trust that could be enhanced within a multitude of areas.”

According to FT, Dmitriev said RDIF had been working for more than a year on bringing PIF to Russia, and the political climate might have helped close the deal.

“Sometimes the wind can help bring the ship to its destination,” he was quoted as saying in the FT report.

RDIF said PIF’s funds would be invested in projects for infrastructure, retail, logistics and agriculture over a period of up to five years, and the Saudi investment vehicle would invest together with other foreign sovereign wealth funds mostly from Asia, including the Russia-China Investment Fund, a $2 billion vehicle backed by the China Investment Corporation and RDIF.

PIF’s commitment adds to pledges from Asian and Middle Eastern sovereign wealth funds to Russia.

Until 2013, RDIF had established partnerships with western sovereign funds.

Since then, the Russian fund’s new partnerships have been dominated by Asia and the Middle East.

The RDIF also disclosed that it signed an agreement with Saudi Arabian General Investment Authority (SAGIA), to undertake projects in Saudi Arabia and other Middle East countries.