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Wed 10 Jul 2019 11:05 AM

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Saudi Arabia expands mandate of $28bn fund to energy, mining projects

The Saudi Industrial Development Fund previously only provided financing to local manufacturing businesses

Saudi Arabia expands mandate of $28bn  fund to energy, mining projects

Saudi Arabia expanded the mandate of its SAR 105 billion  ($28 billion) industrial fund to allow the financing of energy, logistics and mining projects as part of broader efforts to develop the kingdom’s industries.

The changes greatly extend the purview of the Saudi Industrial Development Fund, which previously only provided financing to local manufacturing businesses.

Under the new terms, companies will be also eligible for additional financing options, including multi-purpose term loans and acquisition financing, the fund known as SIDF said in a statement to Bloomberg on Tuesday.

In another key shift, the fund can now provide financing to businesses outside the kingdom that have Saudi investors.

While “SIDF will remain focused on providing financing to projects inside the kingdom,” the amendments provide “some flexibility to finance projects abroad,” the fund said.

The industrial fund, created in the 1970s, is being revamped to take on a bigger role under Crown Prince Mohammed bin Salman’s blueprint for life after oil, dubbed Vision 2030. In January, the government raised SIDF’s capital by about 60 percent.

Saudi officials have also put a special focus on manufacturing, logistics and mining as potential engines of diversification as the kingdom tries to overhaul its oil-dependent economy.

"SIDF has evolved from covering one major sector through one financial product to covering four major sectors through a variety of financial products," the fund said.

The changes came in the form of amendments to the bylaws that govern the fund and were approved by the Cabinet last week.

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