Basic Information

 
 
Introduction

Foundation :

     The Saudi Fund for Development was established by Royal Decree No. M/48 dated 14/8/1394 AH corresponding to 1/9/1974 It commenced operations on 18/2/1395 AH corresponding to 1/3/1975.

Objectives :

     As defined in its charter, the basic objectives of the fund 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.

Management and Organization :

     The Fund is a legal entity, which maintains an independent financial status. It is managed by a six - member Board of Directors chaired by the Minister of Finance. The Vice Chairman/Managing Director of the Fund has executive authority and is responsible for implementing decisions of the Board of Directors.

The Capital :
     The Fund commenced its activities with a capital of SR. 10 billion provided by the Saudi government. The capital has been increased in three phases to its current level of SR. 31 billion.


Scope of Activities
 
Financing of development projects :

     The Fund’s contributions are provided through soft loans. It has no geographical exclusion and it deals directly with governments of the developing countries in financing priority developments projects. The Fund, however, assigns priorities to least developed, low-income countries.

Export Credit and Insurance :

     On 12/04/1999, the esteemed Council of Ministers directed the Fund to undertake the task of providing credit and insurance in support of non-crude-oil national exports. Certain Articles of the Fund’s Charter have been amended to correspond to the new mission.


Statutory Framework
 
 In granting loans for financing of development projects, the Fund requires that :

  1. The project should be feasible economicaly and/or socially.

  2. The loan should be disbursed and repaid in Saudi Riyals.

  3. The amount of the loan granted for any project should not exceed five percent (5%) of the Fund’s capital nor exceed fifty percent (50%) of the total cost of the project for which the loan is granted.

  4. The total amount of loan granted to any country should not exceed ten percent (10%) of the Fund’s capital at any one time.

For Export Credit and Insurance, the Fund requires that :

  1. The eligible national goods/services shall include the non-crude-oil products, the industrially processed, the modified processed, secondary downstream petroleum sector products, and good/services for the agricultural and industrial projects, all of which whose local value-added percentage shall not fall below 25% .

  2. The Fund’s contribution in financing of a transaction may amount to 100% of the total price of the export deal according to the circumstances and the nature of the transaction and the measures of the commercial or political risk that are involved. Terms of such financing vary from one (1) year to twelve years (12) whereas the insurance cover and finance guarantee may reach 90% of total export unpaid value .

  3. The Saudi Riyal or USD is denominated as the official used currency in all transaction of the Program .

  4. The Program shall always impose on and take from the Borrower the necessary securities to guarantee re-payment and secure the Fund’s rights. That is based on the nature of the deal, risk involved and the integrity of the legal entity as contracting party .