Saudi Arabia’s Tourism Development Fund has reached an agreement with local banks - Riyadh Bank and Banque Saudi Fransi - for funding of up to SR160 billion ($42.66 billion) to develop major tourism projects across the kingdom, reported Arab News.
The Tourism Development Fund was founded in June with an initial $4 billion investment and is part of plans to diversify the economy in the face of the coronavirus pandemic and low oil prices.
The deal is based on establishing financing programmes to support and develop the tourism sector with a value of up to SR160 billion and aims to activate the programs agreed on with the two banks, stated the report, citing the Saudi Press Agency.
Tourism Development Fund’s CEO Qusai Al Fakhri inked the deal with Riyadh Bank CEO Tareq Al Sadhan and Banque Saudi Fransi's Managing Director and CEO Rayan Fayez in the presence of Saudi Minister of Tourism and Fund Chairman Ahmad Al Khateeb, it stated.
“This agreement includes defining ways of cooperation between the fund and the participating banks by setting up mechanisms to support financing tourism projects in various regions of the kingdom,” it stated.
The agreement was one of the fund’s efforts to encourage and stimulate investments in the tourism sector and support the private sector, including support for small and medium-sized enterprises (SMEs), by providing a number of financial products, it added.
On the deal, Al Fakhri said it was an essential step towards supporting and developing tourism projects in the kingdom.
"The fund’s role and commitment to supporting and developing the tourism sector continued by stimulating investment and building a solid relationship with banks and financial institutions, which would create distinct investment opportunities in the kingdom," he noted.
Al Sadhan said Riyadh Bank was proud to form this partnership with the fund, which would enhance the role of banks in supporting the private sector, including SMEs, and enable the development of tourism projects in the Kingdom.
"The tourism sector is one of the most important sectors that support the economy, and we are looking forward to starting an active participation with the fund to support quality projects, which will have an impact on finding promising investment opportunities in the Kingdom," he stated.
Fayez said that the agreement accompanied the effective role of banks in achieving the objectives of the tourism sector, which was one of the most promising sectors for investment.
"This would be the beginning of an effective partnership with the fund that would contribute to creating investment opportunities in the kingdom," he noted.
He pointed out that these agreements played an important role in creating pioneering tourism projects and destinations that, in turn, contributed to achieving the objectives of the National Tourism Strategy.
The strategy is aimed at increasing the tourism sector’s contribution to the kingdom’s gross domestic product from 3 to 10 per cent and also create a million new jobs and receive 100 million local and international visitors by 2030m, he added.