AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
On 7 March 2017, the Saudi Fund for Development signed an export financing agreement with the Turkish-based Odeabank. The denoted agreement was signed in order to establish a credit facility which scope is to provide financing for exports originating from Saudi Arabia. Consequently, indicating that the main beneficiaries of these credit facilities are Saudi exporters as well as importers of Saudi products and services.
According to official sources, the establishment of this credit line is in line with the Saudi Export Program initiative.
According to the signed agreement, the financial amount that is dedicated to the establishment of this credit line is USD 20'000'000.
The Saudi Export Program -- The Saudi Export Program (SEP) is part of the Saudi Fund for Development and was established in 1999. The program promotes Saudi exports to contribute the country's GDP and minimize the economic dependence of crude oil. In promoting the export of Saudi goods the SEP can support 100% of the value of the eligible export transaction depending on risk and nature of the export. In general, the value of exported good/service must contain a Saudi domestic value of 25% or more as well as the transaction having a minimum value of SAR 100'000 (approx. USD 26'666). Additionally, parties benefiting from the SEP fall into one of the following: Saudi companies and establishments; foreign companies, entities or governments importing or purchasing of Saudi goods or services; or lastly local or foreign banks and financial institutions.
The Saudi Fund for Development -- The Saudi Fund for Development (SFD) was established by Royal Decree No. M/48 of 1 September 1974. The Fund's main objectives are to: 'participate in the financing of development projects in developing countries through granting of loans to said countries and to encourage national non-crude-oil exports by providing finance and insurance in support of such exports.
Odeabank -- Odeabank is a Turkish-based financial institution which main shareholders are the Lebanese Audi Bank, European Bank for Reconstruction and Development as well as International Finance Corporation. Besides for non-oil Saudi exports, Odeabank provides financing for Saudi oil export activities as well.
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