ANNOUNCEMENT 16 Sep 2009In September 2009, the government of Saudi Arabia announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
The Saudi Fund for Development, press release of 16 September 2009: Saudi Fund for Development signed with the Republic of Turkey Baraka Bank financing line for the export of national products in non-oil agreement worth 75 million Saudi riyals: http://www.sep.gov.sa/webcenter/faces/oracle/webcenter/page/scopedMD/s496069c3_e35f_448c_8a0a_0c2ed8086bcf/Page29.jspx?wc.contextURL=%2Fspaces%2Fexportprogram&DFile=121-DOCUMENT-147109&NRow=3&wc.originURL=%2Fspaces%2Fexportprogram%2Fpage%2FLatest%2BNews%2BDetails&_afrLoop=406073406456925#%40%3FNRow%3D3%26_afrLoop%3D406073406456925%26wc.originURL%3D%252Fspaces%252Fexportprogram%252Fpage%252FLatest%252BNews%252BDetails%26DFile%3D121-DOCUMENT-147109%26wc.contextURL%3D%252Fspaces%252Fexportprogram%26_adf.ctrl-state%3Dk3zm4bq8i_199
The Saudi Export Program, Introduction: http://www.sep.gov.sa/webcenter/faces/oracle/webcenter/page/scopedMD/s496069c3_e35f_448c_8a0a_0c2ed8086bcf/Page2.jspx?wc.contextURL=%2Fspaces%2Fexportprogram&DFile=SEP_PROJECT_DATAFILE&NRow=0&wc.originURL=%2Fspaces%2Fexportprogram%2Fpage%2FFORWARD&_afrLoop=279550133356624#%40%3FNRow%3D0%26_afrLoop%3D279550133356624%26wc.originURL%3D%252Fspaces%252Fexportprogram%252Fpage%252FFORWARD%26DFile%3DSEP_PROJECT_DATAFILE%26wc.contextURL%3D%252Fspaces%252Fexportprogram%26_adf.ctrl-state%3Dnazuebmo7_2622
The Saudi Fund for Development, What IS SFD?: http://www.sep.gov.sa/webcenter/faces/oracle/webcenter/page/scopedMD/s5dc73d77_7324_4d08_b347_444721019cba/Page2.jspx?wc.contextURL=%2Fspaces%2Fsfdinternet&wc.originURL=%2Fspaces%2Fsfdinternet%2Fpage%2FWhat%2Bis%2BSFD&_afrLoop=276574034869471#%40%3F_afrLoop%3D276574034869471%26wc.originURL%3D%252Fspaces%252Fsfdinternet%252Fpage%252FWhat%252Bis%252BSFD%26wc.contextURL%3D%252Fspaces%252Fsfdinternet%26_adf.ctrl-state%3Dnazuebmo7_2174
The Saudi Export Program, Eligible parties for SEP benefits: http://www.sep.gov.sa/webcenter/faces/oracle/webcenter/page/scopedMD/s496069c3_e35f_448c_8a0a_0c2ed8086bcf/Page12.jspx?_afrLoop=262217691043248&wc.originURL=%2Fspaces%2Fexportprogram%2Fpage%2FELIGIBLE%2BPARTIES%2BFOR%2BSEP%2BBENEFITS&wc.contextURL=%2Fspaces%2Fexportprogram&_adf.ctrl-state=wivj9vjgj_1467#%40%3F_afrLoop%3D262217691043248%26wc.originURL%3D%252Fspaces%252Fexportprogram%252Fpage%252FELIGIBLE%252BPARTIES%252BFOR%252BSEP%252BBENEFITS%26wc.contextURL%3D%252Fspaces%252Fexportprogram%26_adf.ctrl-state%3Dnazuebmo7_1111
On 16 September 2009, the Saudi Fund for Development (SFD), signed a financing agreement totalling USD 20 million with Turkish bank Al Baraka. The credit line is funded through SFD's Saudi Export Program (SEP) and will finance Saudi Arabian exports of various goods and services.
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. 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 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.
According to the terms of the SFD, the goods and services exported within this transaction must contain a Saudi domestic value of 25% or more.