Saudi Arabia has transferred shares worth $80bn to its sovereign wealth fund as the oil-rich nation hopes to rival Norway and Singapore’s state-managed funds and invest in green projects.

Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, said 4% of shares in Saudi Aramco, the world’s biggest oil exporter, would be transferred to the kingdom’s sovereign wealth fund as part of efforts to recalibrate the oil-dominated economy.

The transfer is the latest sign that Saudi Arabia wants to open up the oil giant and “crown jewel” of the Saudi economy, the Arab world’s largest.

The crown prince, who was blamed by the US for sanctioning the murder of the Washington Post journalist Jamal Khashoggi, was quoted as saying the “transfer of 4% of Aramco shares to the Public Investment Fund (PIF) … is part of the kingdom’s long-term strategy to support the restructuring of its economy”.

He said the kingdom wants the investment fund to have $1tn in assets by the end of 2025. The fund, the centrepiece of official moves to end economic reliance on oil, had less than half that amount before this deal.

Norway’s sovereign wealth fund, the world’s largest, said last month it earned a return of 14% on its $1.3tn of investments, much of it from the sale of state-owned oil supplies. Singapore’s Temasek investment fund is worth more than $300bn.

Crown Prince Mohammed stressed that the Saudi state would remain the dominant Aramco shareholder with a 94% stake. He is also head of the sovereign PIF.

Aramco shares finished down by 0.6% in Sunday trading after the announcement. But experts said the share switch would strengthen the sovereign fund.

The oil giant raised $6bn in Islamic bonds in June last year so that it could pay dividends to the new shareholders.

But Aramco announced $30.4bn in profits for the third quarter of 2021, a massive rise from $18.8bn for the same quarter the previous year, as oil prices took off again.