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 Financing of Joint-Venture Projects

 

Since its inception, SIDF has spared no efforts in promoting the implementation of industrial joint venture projects given that foreign direct investment (FDI) is a cornerstone for modern technology transfer to the Kingdom, new job creation for Saudi citizens and GCC market access for local products. The Fund has been particularly keen on attracting leading foreign investors. It treats wholly or partly foreign-owned projects on an equal footing with projects wholly or partly owned by Saudi investors.

Since its inception to the end of the FY 1438 /1439H (2017), The Fund financed 730 joint ventures accounting for 23% of total approved projects with loans totaling SR 58,085 million representing 39% of the total value of approved loans. The foreign partners' capital shares in these projects represent 33% of the total capital invested.

It is worth mentioning that in 137 JV projects, for which SIDF provided loans amounting to SR 7,586 million, have been wholly transferred to Saudi investors after successful operation and full repayment of their debts.

The chemical sector surpassed all industrial sectors in terms of value of loans approved for JVs since SIDF inception to the end of 1438 /1439H (2017) with a share of 55% due to the huge capital invested in such projects, followed by the engineering sector (29%) and the consumer sector (%7).

During the reporting year 1438 / 1439H (2017), the Fund approved 15 loans to set up 14 new joint ventures and expand an existing one with a total value of SR 4,756 million, representing about 45% of the total Fund's approved loans during the year. 8 loans were provided to finance projects in the chemicals sector, 5 loans to the engineering sector and two loans for the consumer sector.

The SIDF-financed joint ventures created 794 new jobs, representing 10% of the total number of jobs created by SIDF-financed projects during the year 1438 / 1439H (7676 opportunities).