A credit insurance policy letter is signed by SABIC and Saudi EXIM Bank

Gapteks.com, RIYADH - The Saudi Export and Import Bank said in a statement on Tuesday that it has inked a deal to cover Saudi Basic Industries Corporation's sales on a letter of credit basis in 40 countries against the risk of non-payment presented by the issuing banks.

It is said to be the biggest insurance ever issued in the Middle East and the first of its kind to be made available to exporters directly for the purpose of insuring LCs that aren't confirmed by issuing banks.

Additionally, it greatly increases the likelihood of expansion and entry into new domestic and foreign markets and raises the competitiveness of Saudi petrochemical exports.

The deal was signed by Salah Al-Hareky, executive vice president of corporate finance at SABIC, and Saad Al-Khalab, CEO of Saudi EXIM Bank.

Riyadh | 🇸🇦#SaudiEXIM and #SABIC have signed an agreement to insure SABIC’s sales on a Letter of Credit basis across 40 countries. It is considered the largest policy ever issued in the Mideast and the first of its kind to be offered to exporters to insure unconfirmed LCs from… pic.twitter.com/9jiKSG4xm8

— بنك التصدير والاستيراد السعودي (@SaudiEXIM) January 16, 2024

"This landmark agreement with SABIC is in line with the bank's continuous commitment to support the Saudi non-oil economy and increase its contribution to the gross domestic product," Al-Khalab stated.

The bank's primary goal is to encourage businesses to expand their export activities and enter new global markets.

"The newest product we offer to Saudi exporters is the letter of credit insurance policy. It was created to help SABIC achieve more pricing and coverage stability in highly competitive export markets with significant geopolitical and economic challenges, as well as to help them realize their vision of becoming a global leader in petrochemicals."

"We expect the Saudi EXIM Bank's letter of credit insurance policy to play a key role in driving our export expansions as it strengthens our ambitions toward realizing our strategic objectives and multiplying our investments, considering the growth in new global markets for our products," stated Abdulrahman Al-Fageeh, CEO of SABIC.

"We are dedicated to supporting the Made in Saudi initiative and increasing the proportion of non-oil products in the Kingdom's gross domestic product," said the statement of Saudi Vision 2030.

The Saudi EXIM Bank concentrates on closing credit gaps and lowering exporters' risks, and it plays a vital role in bolstering the Kingdom's non-oil economy on the international scene. This strategy is in line with the Kingdom's Vision 2030 goals, which seek to increase the GDP proportion of non-oil exports.

Source: arabnews.com