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Foundation : |
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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. |
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Objectives : |
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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. |
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Management and Organization
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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.
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The Capital : |
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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. |
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Scope of Activities
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Financing of development projects
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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. |
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Export Credit and Insurance
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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. |
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Statutory
Framework
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In
granting loans for financing of development projects,
the Fund requires that : |
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- 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.
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For Export Credit and Insurance, the Fund requires that
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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
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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 . |
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