29 Apr 2021, Riyadh: The Tourism Development Fund and Riyad Bank today launched the Tourism Partners program, the first of its kind involving the public and private sectors in accordance with specific performance indicators on both sides in order to enable the development of quality tourism facilities and activities across the Kingdom with a financing value of up to 2 billion riyals to support the financing of tourism projects to be worked on in 2021.
This program is in keeping with the Kingdom’s drive to strengthen partnerships between the government sector and the private sector through the “Shareek” initiative launched by His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Deputy Prime Minister and Prime Minister of the Council of Economic Affairs and Development, God bless him, by opening the way to a wider base of private enterprises including small, medium and large to seize the opportunities resulting from the kingdom’s economic renaissance through the promising tourism sector.
A range of financing options for tourism investment
The “Tourism Partners” program includes three financing options that serve private sector facilities of various sizes, and the value of financing ranges from 1 million riyals to the financing of quality projects by more than 100 million riyals, where financing varies from direct financing from the Fund to joint financing with private banks including Riyad Bank, in addition to providing guarantees on credit facilities by up to 90%, which enhances the demand of investors for tourism projects and reduces the constraints of investment in the sector.
The CEO of the Tourism Development Fund, Mr. Qusay bin Abdullah Al-Fakhri, pointed out that the program coincides with the five-year anniversary of the launch of Vision Kingdom 2030 and coincides with the announcement of His Highness the Crown Prince – God bless him – about the program to strengthen partnership with the private sector (Shareek), which aims to support local companies, and enable them to reach the volume of local investments Up to 5 trillion riyals by the end of 2030 will increase the private sector’s contribution to GDP and provide hundreds of thousands of new jobs, explaining that the tourism partners program is the first program in the sector to have specific performance indicators on the Fund and Riyad Bank contributes to increasing the contribution of the tourism sector to GDP and creating new jobs. Al-Fakhri praised the partnership with Riyad Bank, where the two sides set clear objectives to be worked on in 2021.
Targeting 113tourismprojectsin 3 categories and 7 destinations
Al-Fakhri added that the program “Tourism Partners” aims to provide financing operations in the form of loans or guarantees to enable the development of projects in 7 tourist destinations among the destinations identified by the National Tourism Strategy in Riyadh, Al-Jouf, Hail, Dammam and Khobar, Al-Ahsa, Jeddah, Medina, Taif, Al Baha, Assir and Alula. The CEO of the Fund confirmed that the program aims to finance 36shelter projects including hotels, resorts, hotel apartments and rural hostels, in addition to 46 projects to serve modern life including shopping malls, restaurants, cafes, entertainment malls and promotional events, as well as 31 projects in the field of tourism experiences and adventures.
Overcoming investment obstacles and supporting the Kingdom’s position as a global business destination
“The fund’s primary role as an investor partner in the tourism sector is to find financing solutions to overcome obstacles that may prevent investors from entering rewarding tourism projects,” he said, noting that the financing options within the program allow investors to finance assets, working capital, supply chains, salaries and invoices. He also expressed his pride in launching the kingdom’s first partnership program with specific indicators of value on both government and private sides, adding that Riyad Bank’s financial, human and digital capabilities and the structure of technical systems and digital services are considered one of the strongest banking capabilities in the Kingdom and the highest development, and that Riyad Bank is happy to make available its capabilities in supporting the kingdom’s2030 vision targets and programs to serve the partnership with the government sector in achieving its strategic goals towards the economic and social sectors in the Kingdom.
Al-Sadhan stressed that the partnership with the Tourism Development Fund since its launch is a strategic partnership and that the program “Tourism Partners” reflects the level of partnership between the two sides, which also results in the launch of the first financing products of the Fund for businesses in the tourism sector through Riyad Bank, adding that the hard work during the past period between the Bank and the Fund for product development and presentation indicates their keenness to provide products suitable for the tourism sector, which enhances the kingdom’s competitiveness in business ease indicators, and contributes to strengthening the kingdom’s position as an investment and business destination in order to support investment flows.
It is worth mentioning that the Tourism Development Fund is a key driver of the tourism renaissance in the Kingdom and seeks to be a global model of government initiatives for tourism development by providing concessional financing to investors benefiting from effective partnerships with lenders in the public and private sectors, serving the Kingdom’s vision to increase the contribution of the tourism sector to more than 10% of GDP and generate 1 million jobs by 2030.
Riyad Bank is one of the most supported banks for The Kingdom Vision 2030 programs and projects in various sectors, and the Bank has the first center in the Kingdom to develop business initiatives and possibilities to design support programs for government and business entities, the Bank is the largest financier of SMEs in the Kingdom for four consecutive years through a sponsorship program, and is a strategic partner in financing many quality projects in the Kingdom and in various sectors supported by its various programs and products for local and foreign investors and its international presence through its external branches.
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