AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
On 28 July 2010, the Saudi Fund for Development (SFD) signed an export financing agreement with the following two Turkish Banks: Türkiye Finans Katılım Bankası A.Ş. and Asya Katılım Bankası A.Ş. The agreement is aligned and signed under the framework of Saudi Export Program (SEP). Thus, as per the signed agreement, the SFD will provide the two denoted Turkish Banks with credit facilities which will enable them to establish an infrastructure for exclusively financing Saudi exports. The financial value of the signed export agreements was SR 112 (USD 29 million).
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.
Türkiye Finans Katılım Bankası A.Ş. -- Türkiye Finans Katılım Bankası A.Ş. is a Turkish private bank which majority shareholder is the Saudi National Commerical Bank.
Asya Katılım Bankası A.Ş. -- Asya Katılım Bankası A.Ş. is the sixth largest private bank of Tukrey.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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