11/28/2023–|Last updated: 11/28/202304:22 PM (Mecca time)
The Saudi Public Investment Fund said – today, Tuesday – that it has signed an agreement to secure a fixed-term syndicated loan of up to $5 billion from a consortium of 9 international banks, with coverage from the Korea Commercial Insurance Company.
Fahd Al-Saif, Head of the General Department of Global Investment Finance at the Saudi Public Investment Fund, said that this financing “contributes to strengthening economic and trade ties between the Kingdom of Saudi Arabia and the Republic of South Korea.”
The duration of the financing covered by Korea Trade Insurance Company – the first financing of the Fund to be covered by an export credit agency – is 13 years with an initial value of $3 billion, with the possibility of increasing it to $5 billion.
According to a statement by the Fund, this step comes as part of its ongoing efforts to diversify its funding sources.
For his part, In Ho Lee, President of Korea Commercial Insurance Company, said that this agreement will allow Korean companies to obtain more orders thanks to their increased competitiveness in the financial field, which is a new element added to their competitiveness on the technological level.
He added, “We are confident that this support will strengthen future partnerships between the two countries.”
Partnerships
The Korea Commercial Insurance Company loan comes after the Public Investment Fund announced a joint project with the South Korean automaker Hyundai last October to build an automobile factory in Saudi Arabia in a project estimated to cost more than $500 million.
The Public Investment Fund owns 70% in the project, and Hyundai owns 30%.
The Public Investment Fund is at the center of Saudi Arabia’s plan to reduce its dependence on oil at a time when it is spending billions of dollars on diversifying its economy.
The fund is expanding locally and internationally through a large number of investments and joint projects.
The Public Investment Fund refers to loans and debt instruments as major sources of financing, in addition to capital injections from the government, the transfer of government assets to the Fund, and profits returned from investments.
The fund, whose assets exceed $700 billion, owns a total stake of 8% in the giant state-owned oil company Aramco, giving it significant financial flows.
