Small part of $1b Saudi deal to go toward export financing

Small part of $1b Saudi deal to go toward export financing


Jakarta — A small part of US$1 billion investment deal between Indonesia and Saudi Arabia signed on Wednesday (01/03) and witnessed by President Joko Widodo and King Salman bin Abdul Aziz Al Saud will be used for export financing, a minister has said. Finance Minister Sri Mulyani Indrawati said the US$1 billion deal would be controlled by the Saudi Arabian government fund agency Saudi Fund for Development (SFD), with about US$750 million of the fund taking the form of financing for development programs such infrastructure and other projects. The [remaining] US$250 million will be used for export financing for non-oil and gas products from Saudi Arabia to Indonesia,” she said after an event on Thursday (02/03), adding that the scheme was similar to the one used by the government-backed export financing agency Indonesia Eximbank. The SFD channels bilateral aid to developing countries, predominantly through grants and soft loans for wide-ranging projects, such as infrastructure, education and energy. The SFD also offers export credit and insurance for non-crude oil national exports to encourage economic diversification in recipient countries. Loans offered by the SFD are without conditions with generous repayment terms of up to 50 years with a 10-year grace period and 1 percent interest rates in general. Saudi Arabian and Indonesian business people also signed on Thursday a memorandum of understanding worth US$2.4 billion, mostly related to the development of 8,000 low cost houses.

Source: thejakartapost