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Joint-Venture Financing
Direct foreign investment is considered an
effective means of attracting to and implementing state-of-
the-art technologies in the Kingdom; creating new job
opportunities for Saudi citizens, and providing access for
national products to the international markets. Therefore, SIDF
has spared no effort, since its inception, in encouraging the
establishment of joint venture projects in collaboration with
reputable international companies, based on its firm belief that
all factors which ensure the success of such projects are
already in place in the Kingdom. Moreover, the Fund does not
require Saudi partnership in these projects as it also finances
projects that are wholly owned by foreign investors. It is
noteworthy, in this context, that SIDF treats wholly
foreign-owned projects on an equal footing with projects wholly
or partially owned by Saudis.
The number of joint-venture projects approved by the Fund since
its inception up to the end of the fiscal year 1427/1428H
(2007G) reached 571 projects, or 28% of total projects approved.
In terms of value, loans committed to these projects amounted to
SR 24,771 million or 37% of total SIDF loans. Foreign Partners’
share in these projects accounted for 31% of their capital.
It should also be noted that 100 of these projects, with
commitments amounting to SR 6,201 million, have become wholly
owned by Saudi investors after purchase of the share of the
foreign partners, following the eventual success of these
projects and their repayment of all debts. The Chemical
Industries Sector led all other sectors by value of loans
committed to joint venture projects, taking into account its
immense investment requirements, with a share of 58% of SIDF
cumulative loans by the end of 2007G. It was followed by the
Engineering Industries Sector, with a share of 22% and the
Consumer Industries Sector with a share of 13%.
During the report year 1427/1428H (2007G), SIDF approved 20
loans for the establishment of 13 new projects and the expansion
of 7 existing ones. Commitments to these projects totaled SR
2,640 million or 31% of SIDF commitments for the year. Loans for
the new joint-venture projects comprise six loans to projects in
the Engineering Industries Sector; five loans in the Chemical
Industries Sector, and one loan each to the Building Materials
and “Other Products” Sectors.
Joint-venture projects approved during the year provided 3968
jobs, representing approximately 18% of the total provided by
all projects approved by SIDF during the year 1427/1428H
(2007G), namely, 22420. |
