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 Opening Letters of Credit

 

The Saudi Industrial Development Fund (SIDF) offers to issue letters of credit in coordination with commercial banks in order to finance the credit for imported machinery and equipment on due dates. This service aims to help clients use the paid-in capital to finance other aspects of the project, which shall positively reflect on the speed of project implementation and reduce the cost and procedures of issuing such credits.

 

The client shall be responsible for selecting machinery and equipment, their sources and manufacturers as well as providing supply contracts, subject to the Fund's approval as currently applicable.

 

SIDF has signed an agreement with five banks (so far):  

  • Riyad Bank
  • Banque Saudi fransi
  • Bank AlJazira
  • SABB
  • Bank Albilad

 

The obligations of the parties are as follows:

  • The Fund is responsible for financing and covering most of the credit after approval.
  • The bank is responsible for opening the letter of credit and matching all documents (shipping, insurance, examination certificates and origin)
  • The client is responsible for the purchase of machinery and equipment, their shipment, quality, safety and compliance with the required specifications, provided that at least 25% of buildings and civil works are implemented. It is noteworthy that the client shall pay the fees of issuing the letter of credit (unified fees in all banks) and any other costs related to such credit or any differences arising between the coverage of the Fund and the total value of the credit.