Saudi Arabia to raise industrial fund’s capital by SR6bn

Saudi Arabia to raise industrial fund’s capital by SR6bn
Energy, Industry and Mineral Resources Minister Khalid Al-Falih says the SR6 billion fund injection will help the SIDF to develop a wide range of industries. (Reuters)
Updated 15 December 2016

Saudi Arabia to raise industrial fund’s capital by SR6bn

Saudi Arabia to raise industrial fund’s capital by SR6bn

ALKHOBAR: Saudi Arabia plans to boost the capital of the Saudi Industrial Development Fund (SIDF) by SR6 billion ($1.6 billion) to help finance the Kingdom’s entry into new industries, Energy, Industry and Mineral Resources Minister Khalid Al-Falih said.
The additional planned allocation would be on top of the SR3 billion of capital recently injected in the fund, Al-Falih was quoted as saying in a Reuters report.
“There is now a study to increase the capital of the fund by a large amount which will give it an opportunity to develop other industries,” the minister said.
“We are talking about renewable energy industries, conversion industries, automotive industries, vital industries that have never existed in Saudi Arabia,” he said, adding that military and pharmaceutical projects would receive support.
Saudi Arabia is also expanding the Public Investment Fund (PIF) to invest in strategic projects and firms.
The SIDF was established in 1974 to finance growth of private industry by providing loans to set up factories and upgrade existing ones.
It also offers consultancy services to local industrial projects.
In its early years, the SIDF managed the government program to finance electricity companies, helped to develop the cold storage and date-processing industries, and analyzed government support for public hospitals.
It is now involved in guaranteeing loans for small and medium-sized enterprises.
At a recent ceremony in Dhahran, Al-Falih highlighted the government’s commitment to diversify the economy and localize strategic industrial and economic sectors in alignment with Vision 2030.
He described Saudi Aramco’s iktva initiative as a pioneering program. It is Saudi Aramco’s flagship localization initiative, designed to drive domestic value creation.
The initiative aims at achieving 70 percent localization of all spending on goods and services, enabling the export of 30 percent of Saudi energy sector products by 2021. 
Al-Falih said that the localization of the Saudi economy by both the public and private sectors has reached 35 percent in 2015 and is expected to reach 50 percent by 2021, 59 percent by 2025, and 70 percent by 2030.
“These ambitious targets will be pursued through an integrated program to encourage suppliers to procure their goods and services locally,” he said.
In his keynote address, Saudi Aramco President and CEO Amin H. Nasser said that Iktva can be part of the building blocks for a thriving and competitive world class Saudi energy sector as Saudi Aramco champions massive investments that will create new industries, which will need completely new localized supply chains.
 Reflecting on the achievements that have been made since iktva was launched in December 2015, Nasser said, that overall, the share of local manufacturing has reached SR10 billion ($2.6 billion), or 43 percent, which is an increase of 16 percent from 2015 levels, the highest level of local content in the company’s history. 
“We remain committed to procuring goods and services worth more than SR1 trillion over the next decade. Therefore, vast opportunities are there for all our suppliers by ensuring that 70 percent of those riyals are adding value in Saudi Arabia” he said.
“Our partners are the lifeblood of iktva and their success is our success,” he added.