Saudi Arabia’s King Salman bin Abdulaziz al-Saud has approved the allocation of SR100bn ($26.67bn) from the kingdom’s reserves to the Public Investment Fund (PIF) to help it diversify its portfolio and generate alternative investments revenue streams.

PIF, the kingdom’s main sovereign wealth fund, would use the funds to expand and strengthen both its foreign and local investments, particularly, in some high-yield local market deals which will also help support the private sector and economic growth, according to a statement carried by state news agency SPA, which did not give details of the size or timing of the intended investments.

“The allocated fund would be invested according to specific periodic phases and in light of the kingdom’s Vision 2030 and its objectives,” the statement said.

PIF is at the heart of Saudi government’s plan to diversify its hydrocarbon-dependent economy. Riyadh aims to inflate the fund’s size from about $160bn to estimated $2 trillion by transferring the ownership of Saudi Aramco, the world’s biggest oil exporter, to PIF once it floats less than 5 per cent of the oil and gas giant on Saudi bourse. That would make the PIF the world’s biggest sovereign fund by far on paper, though not necessarily in terms of the cash it would have available for investment.

PIF is mandated to invest at home and abroad to generate investment income for the kingdom, which is facing a financial squeeze on the back of sliding oil prices.

The fund, earlier this week, agreed to buy a stake in Adeptio, the UAE-based investment firm led by Emaar Properties chairman Mohamed Alabbar, which controls Kuwait Food Company (Americana). PIF is acquiring 50 per cent of Adeptio from billionaire Alabbar, as part of efforts to strengthen its non-oil sector portfolio and expand its geographical presence across asset classes.

The PIF was founded in 1971 to finance development projects in the kingdom. It plans to increase the proportion of its foreign investments to 50 per cent by 2020, up from 5 per cent.

The Adeptio transaction is the first big food sector deal announced by the PIF this year. Previously, it focused on the technology sector. The PIF has already made major investments in US online transportation firm Uber and the new Middle East e-commerce site Noon. The wealth fund has also agreed to start a $100bn technology fund with Japan’s Softbank Group Corporation.

It is also considering increasing its stake in local power developer Acwa Power to up to 35 per cent, and will also take ownership of the King Abdullah Financial District, in a deal currently under negotiation with the Public Pensions Authority (PPA).