South Africa and Saudi Arabia have created a joint holding company that could trigger at least R20 billion ($2.4 billion) worth of investment in business opportunities in both countries.

Saudi Arabia-SA Business Council chairperson Iqbal Surve said the Saudi Arabian crown prince Nayef bin Abdul Aziz had formally endorsed the holding company which would serve as an investment vehicle enhancing business development in both economies.

According to South Africa’s Trade and Industry Minister Rob Davies, Saudi Arabian SA Holding (Sasah) investment company would spend the initial capital on feasibility studies for investment in South African agriculture and Saudi Arabian mining and petrochemicals.

“Saudi Arabia has identified gold mining and other base materials. They’ve chosen not to exploit those previously… but are now moving towards expropriation and looking at South African technology and expertise,” Davies said.

Reports indicate that the oil-rich Middle Eastern country is looking at investing in South African agriculture for food security and stimulating local job creation and as a first option; it could be a major shareholder in joint ventures, entitled to free 5 percent equity in projects initiated and promoted by it.

It would also act as a “government endorsed” facilitator for businesses looking to expand with in large-scale investments in both countries.

Davies said he was hoping investment by Saudi Arabian companies in Africa’s largest economy would run “into tens of billions of rands” in the next few years.

According to him, if Sasah is successful, South Africa could benefit from investment through Saudi Arabia’s sovereign wealth fund, “one of the wealthiest in the world”.