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Saudi Tourism Development Fund, banks sign deal for up to $43 bn of projects

September 28, 2020 at 6:21 pm

Tourists visit the King Abdulaziz museum of Masmak in the old quarter of the Saudi capital Riyadh on 17 October 2019 [FAYEZ NURELDINE/AFP/Getty Images]

Saudi Arabia’s Tourism Development Fund on Monday signed an agreement with Riyadh Bank and Banque Saudi Fransi to finance up to 160 billion riyals ($43 billion) of tourism projects in the kingdom, state news agency SPA reported.

The agreement will set up mechanisms to finance tourism projects across the kingdom as part of the government’s efforts to develop the sector, a key pillar of Saudi Crown Prince Mohammed bin Salman’s ambitious reform strategy to reduce dependence on oil.

The fund, founded in June with an initial $4 billion investment, is part of plans to diversify the economy in the face of the coronavirus pandemic and low oil prices.

It is intended to launch investment vehicles to develop tourism in collaboration with private and investment banks.

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The kingdom, which opened its doors to foreign tourists in September 2019 by launching a new visa regime for 49 countries, wants the sector to contribute 10% of gross domestic product by 2030.

Earlier this week, tourism minister Ahmed al Khateeb told Reuters that the tourism sector had been hit hard by strict government measures to fight the coronavirus and was expected to decline by 35%-45% by the end of the year. ($1 = 3.7506 riyals)