AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
On 29 March 2016, the Saudi Fund for Development (SFD) signed an export financing agreement amounting to USD 75 million, with several Turkish banks. The identity of the Turkish banks with which the denoted agreement was signed was disclosed neither in the announcement of the SDF nor any other official Saudi source.
Nevertheless, as part of the signed agreement, according to official sources, the Saudi Fund for Development provided credit facilities to several Turkish banks. The Turkish banks in turn, according to the signed agreement, will use the provided loans, in order to provide their clients with financing for trade activities exclusively related to exports originating from Saudi Arabia.
Lastly, this export financing agreement was aligned and signed under the framework of the Saudi Export Program initiative.
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.
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