The agreement is funded through SFD's Saudi Export Program (SEP) and will issue guarantees for export of Saudi national products valued at more than SAR 553 million (approx. USD 147.4 million). In a SFD press release it was further stated that: "under this cooperation agreement, the bank is referred to carry out all banking related to the financing of Saudi exports, including promotion of letters of credit received from foreign banks for the benefit of Saudi exporters, as well as to provide pre- and post shipment finance related to the Saudi Export Program."
It is granted under 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 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. 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.
According to the Saudi authorities the “SEP has made good achievements by being able to approve export funding and guarantee facilities supporting about SAR 39 Billion (equivalent to US$ 10.4) Billion worth of exports reaching to about 68 countries. Such facilities include direct funding operations amounting to SR (12.7) Billion (ed. approx. USD 3.39 billion). In addition to that, the program has opened lines of credit with several foreign banks amounting to SR (3.5) million (ed. approx. USD 0.93 million).”
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 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.