(MENAFN - Arab News) Custodian of the Two Holy Mosques King Abdullah has doubled the capital of the Saudi Industrial Development Fund (SIDF) to SR40 billion (10.7 billion) in an effort to develop the industrial sector, its chairman Abdul Rahman Al-Humaidi said yesterday.
The SIDF is a state-owned fund that grants medium and long-term loans for private industrial projects.
"The fund started with a capital of SR500 million. During the reign of King Abdullah it was raised to SR20 billion in 2005. Now it has doubled," Al-Humaidi said in remarks carried by the Saudi Press Agency.
Saudi Arabia is looking to diversify its economy, reducing dependence on oil revenues. It has spent 400 billion over the five years to 2013 to upgrade its infrastructure and has launched a plan to build five mega economic and industrial cities.
The SIDF has issued 3,344 loans worth SR95 billion since it was first set up in 1974 to support industrial services projects as well as raising the amount of financing available for projects in less developed areas of the Kingdom.
Last year the Saudi Arabian Mining Company (Maaden) said the SIDF would help finance the second phase of its 10.8 billion integrated smelter and rolling mill complex.
"We have increased loan amounts to projects in less developed cities and regions to 75 percent of the total cost, instead of 50 percent," the chairman said.
"We have also extended their repayment period from 15 to 20 years," he pointed out.
Abdul Rahman Al-Rashid, chairman of Asharqia Chamber and a prominent businessman, commended the king's decision to double SIDF capital and said it would contribute to strengthening the industrial sector as well as the national economy.
He described industry as the engine of growth for economic sectors.
He said the royal decision would lead to the establishment of new industries and help SIDF finance more projects.
Abdullah Al-Mubti, chairman of the Council of Saudi Chambers, also praised the royal gesture, saying it would increase SIDF's ability to finance industrial projects.
"The doubling of SIDF capital will lead to the establishment of more industries, especially small and medium ones. It will also create more jobs for Saudis," he said.