Saudi Industrial Development Fund

The Saudi Industrial Development Fund is a government fund established in 1394 AH (1974) with capital of SAR 500 million, and it began operations that same year to develop the local industrial sector.[1]

The Fund provides medium- and long-term loans to establish new factories or to develop, modernise and expand existing ones, along with advisory services in the technical, financial, administrative and marketing fields.[1] Its capital increased in stages until it reached SAR 105 billion in January 2019, and today it covers the industry, mining, energy and logistics services sectors.[5][10]

The Fund was established in 1394 AH (1974) with capital of SAR 500 million, and it began operations that same year under the controls, procedures and lending policy set out in the Royal Decree.[1]

Its mission was to develop the local industrial sector by providing medium- and long-term loans to establish new factories or to develop, modernise and expand existing factories, in addition to providing advisory services in the technical, financial, administrative and marketing fields.[1]

The Fund's capital increased over several stages; it reached SAR 7 billion in 1401/1402 AH.[1]

During the reign of the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud, its capital was raised to SAR 20 billion in 1426 AH, its resources were supported in 1431 AH with a deposit and an interest-free loan totalling SAR 10 billion, and it was then raised to SAR 40 billion during the 1433/1434 AH fiscal year.[1]

In 2017, the High Order approved the completion of the Fund's unpaid capital and its increase by SAR 25 billion, bringing total capital to SAR 65 billion, in service of the industrial strategy and the Kingdom's entry into a phase of qualitative industries in mining, renewable energy, manufacturing, automobiles, pharmaceuticals and electronics.[3]

In January 2019, the Fund's capital was raised from SAR 65 billion to SAR 105 billion.[5]

From its establishment until mid-Shawwal 1434 AH (October 2013), the Fund approved 3566 loans with a total value of SAR 107 billion, contributing to the establishment of 2545 industrial projects across the Kingdom.[2]

Disbursements from these approvals totalled SAR 73 billion, of which SAR 44 billion was repaid to the Fund.[2]

The number of loans approved for industrial projects up to mid-fiscal year 1439/1438 AH (2017) totalled 4130 loans whose approvals exceeded SAR 139 billion.[3]

In 2018, the Fund launched more than 40 initiatives under its new strategy, which aims for it to be the main financial enabler contributing to leading the industrial transformation in the Kingdom through integrated financial and advisory products and services. These include an initiative to improve the efficiency of loan procedures, support for small and medium enterprises, the introduction of advisory services, and the conclusion of local and international strategic partnerships.[4]

In July 2019, after 45 years of work, with the Council of Ministers' approval of an amendment to its statute, the Fund was able to expand the scope of its support to cover new and promising sectors in industry, mining, energy and logistics services listed under the National Industrial Development and Logistics Program.[5]

In July 2019, the Fund and the Saudi Authority for Industrial Cities and Technology Zones (MODON) launched a new product called 'Factory and Industrial Loan', which allows an investor to submit a financing request and be allocated a ready-built factory through a unified package, with no rent payable for the ready factory until the Fund's loan is obtained, alongside the 'Land and Industrial Loan' product.[6]

In March 2023, the Fund signed a memorandum of understanding with the General Authority for Military Industries to build a common framework that enhances integration in supporting and incentivising establishments operating in the military industries sector through loans and project financing.[9]

In February 2024, it signed a cooperation agreement with the Public Investment Fund to enable the suppliers and graduates of supplier-development programs of the Fund's affiliated companies to benefit from financing solutions, within the Fund's 'Tawteen' program, achieving the goal of raising its contribution to local content development to 60% by 2025.[8]

The Fund currently covers four sectors — industry, mining, energy and logistics services — and provides financing solutions including working capital, supply chain financing, project financing, acquisition financing and multi-purpose financing, in addition to advisory services to support small and medium enterprises.[10]

The Fund reduced the time needed to obtain loans from 11 months to less than 5 months by automating all internal procedures, in line with international standards.[7]

During the coronavirus pandemic, it provided support exceeding SAR 4.5 billion, including loan restructuring and credit lines for small, medium and medical companies, and from the beginning of 2020 to the end of the third quarter it approved loans worth SAR 6.2 billion, of which SAR 2.6 billion was disbursed.[7]

Q: When was the Saudi Industrial Development Fund established and with what capital? A: It was established in 1394 AH (1974) with capital of SAR 500 million, and it began operations that same year.[1]

Q: What is the Fund's mission? A: Developing the local industrial sector through medium- and long-term loans to establish new factories or to develop, modernise and expand existing factories, in addition to technical, financial, administrative and marketing advisory services.[1]

Q: How much is the Fund's capital? A: It increased in stages until it reached SAR 105 billion in January 2019.[1][3][5]

Q: Which sectors does the Fund cover? A: Industry, mining, energy and logistics services.[5][10]

Q: What are the Fund's most prominent products and partnerships? A: The 'Factory and Industrial Loan' product with MODON in 2019, a memorandum of understanding with the General Authority for Military Industries in 2023, and a cooperation agreement with the Public Investment Fund in 2024.[6][9][8]

The Fund combines capital exceeding SAR 105 billion with a lending track whose approvals exceeded SAR 139 billion up to mid-2017, in service of developing national industry within Saudi Vision 2030.[3][5]