Under Crown Prince Mohammed bin Salman’s Vision 2030 program, Saudi Arabia embarked on a mission to end the kingdom’s historical dependence on its fossil fuel industry and diversify its economy.
Among those contributing to this mission is Ibrahim Almojel, CEO of the Saudi Industrial Development Fund (SIDF), which provides financial support and advisory services to companies interested in participating in the kingdom’s ambitious economic transformation
The government raised the fund’s capital by about 60% to reach $28 billion in 2019 to serve as the financial enabler of the National Industrial Development and Logistics Program (NIDLP), which was launched in January. Focusing on the mining, energy, logistics and industrial sectors, NIDLP has $453 billion to invest as part of its objective to contribute to 30% of the kingdom’s GDP by 2030.
Since the Saudi government established SIDF in 1974, it has strengthened the kingdom’s manufacturing sector, with the development of industry, the Saudi people and the economy at the heart of its efforts.
Committed to ensuring the success of Vision 2030, SIDF was empowered to redefine and strengthen itself as an organization built on its trusted expertise and top talents arguably the strongest collection in the kingdom.
“The mandate is as challenging as it is inspiring, and as exciting as it is sleep-depriving. The government empowered SIDF and we intend to deliver by transforming Saudi Arabia into an industrial powerhouse and global logistics hub,” said Almojel, who stressed that SIDF’s loan facilities are open to any nationality willing to operate in Saudi Arabia.
“In addition, SIDF has partnered with international well-known organizations such as Stanford Center for Professional Development and Fitch Learnings to develop the Saudi talents across the industries in order to meet the needs of the labor market”, he added.
As more entities learn of the kingdom’s open-door investment policy, SIDF has established a deep engagement with Asia. For instance, it has approved 31 loans, amounting to $1.7 billion, for Japanese companies, such as Mizuho, Mitsubishi UFJ Financial Group (MUFG) and Sumitomo Mitsui Banking Corporation (SMBC).
For its part, China has also recognized such opportunities. SIDF approved an $840 million loan to Chinese-owned Pan-Asia to develop a petrochemical facility in Jazan City for Primary and Downstream Industries (JCPDI).
“We have a long history with Asia, particularly with China. The positive experience of working with our Chinese counterparts leaves us highly motivated and encouraged to not only expand the existing cooperation but also further develop our ties with businesses across new sectors”, Almojel said.
As it develops stronger ties with Asia, SIDF wants to increase financial support for renewable energy. Under its Mutjadeda Program, it is ready to lend financial assistance and provide incentives to manufacturers of renewable energy components and to project developers in industrial, commercial and agricultural sectors.
For example, a foreign company that will manufacture renewable energy components in Saudi Arabia could be qualified to receive financing for up to 75% of the project cost, along with repayment periods of up to 20 years.
Located at the heart of the Arab world, the Kingdom of Saudi Arabia has the geographical advantage of being a connector between Asia, Africa, and Europe. With major ports on each side of the country, the kingdom is building a highly interconnected ecosystem backed by a robust logistics infrastructure.
On its own, Saudi Arabia is already the largest market in the Gulf region with a population of 32 million. Paired with the logistical access that the kingdom can provide the markets around it, Saudi Arabia offers optimal conditions that can serve as an ideal springboard for those engaged in exports and reexports.
With the notable increase in Chinese investments in the Gulf, Africa, and South Asia, Saudi Arabia stands as a highly complementary piece to the region’s logistical ecosystem. We, therefore, invite our Chinese friends to come and explore the possibilities in Saudi Arabia. SIDF is ready to be a partner,” said Almojel.
“We are only getting started”, he added.
