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Banks (Finance)

Saudi Arabia Launches SR2 Billion Fund to Strengthen Private Sector Involvement in Tourism Projects

Strategic Insights

— 1 min read

The Saudi government has launched a new program, the Tourism Partners, aiming to strengthen partnerships between the public and private sectors. The program, which is part of the Shareek initiative, is supported by the Saudi Tourism Development Fund and Riyad Bank, and is designed to develop quality tourism facilities and activities in the Kingdom. The program will have a financing value of up to SR2 billion, providing funding for tourism projects being implemented this year, including hotels, resorts, and shopping centers.

Key Takeaways:

  • The Tourism Partners program is the first initiative of its kind in Saudi Arabia, allowing both public and private sectors to participate according to specific performance indicators.
  • The program aims to finance 113 tourism projects, including 36 accommodation projects, 46 schemes to serve modern living, and 31 tourist experience and adventure projects.
  • The financing options available to private sector establishments range from SR1 million to over SR100 million, with funding offered via direct financing from the fund and joint financing with private banks, including Riyad Bank.
  • The program provides guarantees on credit facilities by up to 90 percent to enhance investor appetite for tourism projects and reduce investment obstacles in the sector.
  • Tourism Partners aims to support local companies and help them invest SR5 trillion by the end of 2030, increasing the private sector's contribution to the country's gross domestic product and creating hundreds of thousands of new jobs.
  • The program is part of Saudi Arabia's drive to strengthen partnerships between the government and private sectors, as outlined in the Shareek initiative launched by Crown Prince Mohammed bin Salman.

Statistics:

  • Financing value: up to SR2 billion
  • Number of tourism projects to be financed: 113
  • Accommodation projects: 36
  • Schemes to serve modern living: 46
  • Tourist experience and adventure projects: 31
  • Private sector establishments that can participate in the program: Various
  • Private sector contribution to the country's gross domestic product: to be increased by SR5 trillion by the end of 2030

Sources:

  • Arab News, April 29, 2021
  • Saudi Tourism Development Fund
  • Riyad Bank

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