ANNOUNCEMENT 28 Dec 2008In December 2008, the government of Saudi Arabia announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
The Saudi Fund for Development, press release of 28 December 2008; Saudi Fund for Development signed financing the export of Saudi non-oil products to the Republic of Argentina line agreement amounting to 10 million US dollars: 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=2&wc.originURL=%2Fspaces%2Fexportprogram%2Fpage%2FLatest%2BNews%2BDetails&_afrLoop=404789628475249#%40%3FNRow%3D2%26_afrLoop%3D404789628475249%26wc.originURL%3D%252Fspaces%252Fexportprogram%252Fpage%252FLatest%252BNews%252BDetails%26DFile%3D121-DOCUMENT-147109%26wc.contextURL%3D%252Fspaces%252Fexportprogram%26_adf.ctrl-state%3Dk3zm4bq8i_134
The Saudi Export Program, Introduction: http://www.sep.gov.sa/webcenter/faces/oracle/webcenter/page/scopedMD/s496069c3_e35f_448c_8a0a_0c2ed8086bcf/Page2.jspx?NRow=0&_afrLoop=405752416940788&wc.originURL=%2Fspaces%2Fexportprogram%2Fpage%2FFORWARD&DFile=SEP_PROJECT_DATAFILE&wc.contextURL=%2Fspaces%2Fexportprogram&_adf.ctrl-state=nazuebmo7_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?_afrLoop=405592205708385&wc.originURL=%2Fspaces%2Fsfdinternet%2Fpage%2FWhat%2Bis%2BSFD&wc.contextURL=%2Fspaces%2Fsfdinternet&_adf.ctrl-state=nazuebmo7_2174#%40%3F_afrLoop%3D405592205708385%26wc.originURL%3D%252Fspaces%252Fsfdinternet%252Fpage%252FWhat%252Bis%252BSFD%26wc.contextURL%3D%252Fspaces%252Fsfdinternet%26_adf.ctrl-state%3D179yxq3cm6_69
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 28 December 2008, the Saudi Fund for Development (SFD), signed a USD 10 million financing agreement to finance Saudi exports to Argentina. The financing agreement is part of fund's Saudi Export Program (SEP).
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.
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
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.