Saudi Arabia: A special SR2 billion ($530 million) fund to help finance public and private sector involvement in Saudi tourism projects was launched in the Kingdom on Thursday.

The Saudi Tourism Development Fund, and Riyad Bank have linked up to establish the Tourism Partners program, the first initiative of its kind in the country allowing both sectors to participate according to specific performance indicators.

Aimed at developing quality tourism facilities and activities in the Kingdom, the program will have a financing value of up to SR2 billion to support the funding of tourism projects being implemented this year.

The new program is part of Saudi Arabia’s drive to strengthen partnerships between the government and private sectors through the Shareek initiative launched by Crown Prince Mohammed bin Salman.

The scheme is designed to open the door to a wider base of small, medium, and large private enterprises and assist them in seizing opportunities in the Saudi tourism industry.

Under the Tourism Partners program three financing options will be available to private sector establishments, valued at between SR1 million and more than SR100 million. Funding will be offered via direct financing from the fund and joint financing with private banks, including Riyad Bank.

In addition, the program will provide guarantees on credit facilities by up to 90 percent in order to enhance investor appetite for tourism projects and reduce investment obstacles in the sector.

CEO of the Tourism Development Fund, Qusai AI-Fakhri, said the launch of the program coincided with the fifth anniversary of Vision 2030 and the crown prince’s announcement of the Shareek initiative which aimed to strengthen partnerships with the private sector by supporting local companies and helping them invest SR5 trillion by the end of 2030.

This would increase the private sector’s contribution to the country’s gross domestic product and create hundreds of thousands of new jobs, he added.

He pointed out that Tourism Partners was the first program in the sector for which specific performance indicators have been set for the fund and Riyad Bank.

Financing will be provided in the form of loans or guarantees to enable the development of projects in tourist destinations identified by the national tourism strategy, including Riyadh, Jouf, Hail, Dammam, Alkhobar, Al-Ahsa, Jeddah, Madinah, Taif, Al-Baha, Asir, and AlUla.

AI-Fakhri noted that the program aimed to finance 36 accommodation projects, including hotels, resorts, hotel apartments, and rural inns, 46 schemes to serve modern living, such as shopping centers, restaurants, cafes, entertainment and commercial complexes, and promotional events, and 31 tourist experience and adventure projects.

“The primary role of the fund as an investor partner in the tourism sector is to find financing solutions to overcome obstacles that may prevent investors from entering into rewarding tourism projects,” he said.

He added that the program would allow investors to finance assets, working capital, supply chains, salaries, and bills.

Tareq Al-Sadhan, CEO of Riyad Bank, said that the bank’s financial, human, and digital capabilities, as well as its technical and digital services infrastructure, were among the strongest and most advanced in the Kingdom.

He noted that the bank’s work with the Tourism Development Fund had been a strategic partnership which helped to enhance the Kingdom’s competitiveness as an easy place to do business and contributed to strengthening its position as a destination for investment and business.

The Tourism Development Fund seeks to be a global model for government initiatives for tourism development.