UK businesses, especially UK SMEs are set to enjoy key benefits in Saudi Arabia and the Middle Eastern Region as UK Export Finance (UKEF) is backing the Six Flags Qiddiya City deal.
On January 3, the UK's export credit agency revealed that it will be supporting an Islamic Murabaha financing facility for the development of Six Flags Qiddiya City in Riyadh, Saudi Arabia.
UK Export Finance will be financing the Qiddiya Investment Company (QIC) invested project in procuring goods and services from UK suppliers. This is likely to boost UK businesses and UK SMEs to supply their products and services in Qiddiya City development.
The Qiddiya Investment Company supported by the Public Investment Fund of the Kingdom of Saudi Arabia (PIF) signed the £550 million ($700 million) financing agreement with UKEF.
Since UK Exports Finance is involved in the project, UK exporters that supply equipment and services to the project will get a major boost. The Six Flags Qiddiya City project involves constructing the Qiddiya City theme park construction which would be done jointly by Bouygues Bâtiment International and Almabani General Contractors.
For the first time, UKEF is making a Murabaha financing in the region which is also the largest Murabaha financing announced by the agency to date. This move will provide UK exporters wider access to PIF-invested projects announced in large-scale infrastructure development.
The UK Export Finance gets reinsurance from the Italian ECA SACE S.p.A, the German ECA Euler-Hermes Aktiengesellschaft, and the Dutch ECA Atradius Dutch State Business N.V.
It is also supported by Crédit Agricole CIB which is acting as an exclusive ECA Coordinating Bank, Structuring and Documentation Bank and Investment Agent, along with a syndicate of banks including HSBC and BNP Paribas.
Speaking about the Murabaha financing deal, Tim Reid, the Chief Executive of UK Export Finance said: "Saudi Arabia's 'Vision 2030' is hugely ambitious, and UKEF is determined to ensure that British businesses can benefit from the enormous exporting opportunities it offers."
Reid further elaborated on how this landmark Murabaha financing deal will help UK SMEs and suppliers in attracting finance for their business.
"This new landmark deal not only creates exciting business for UK suppliers but demonstrates UKEF's ability to unlock new sources of commercial finance to make transformative projects possible around the globe," said Reid.
Meanwhile, Oliver Christian, His Majesty's Trade Commissioner for the Middle East and Pakistan said: "UK-Saudi Arabia bilateral trade stood at over £17bn last year, and our trading relationship goes from strength to strength. This is clearly demonstrated by today's announcement that UK Export Finance has secured another strategic win by supporting this record-breaking Islamic financing deal – its largest ever Murabaha."
"This transaction will help UK exporters access even more of the valuable trading opportunities being created by Saudi investment in infrastructure and socio-economic transformation," Christian added.
Earlier in 2022, the UKEF signed a partnership agreement with the Saudi Arabian export credit agency, Saudi Export-Import Bank ('Saudi Exim') to combine the two countries' financial support to help UK businesses and Saudi Arabian secure export contracts. The Six Flags Qiddiya City was a result of that.
The agreement with Saudi Exim cemented trading opportunities for UK exporters to the region and also the export of products from Saudi Arabia.
This brought the world's newest and oldest export credit agencies – Saudi Exim and UKEF together. UKEF pledges to help the former with knowledge and expertise to deepen the diplomatic ties between the two countries.
The CEO of UK Export Finance Louis Taylor said then that by working with other export credit agencies from around the world Britain "can open doors to suppliers from other countries to contribute to international projects, making the projects even better" and the UK's offer is "even more attractive" to overseas buyers.
Meanwhile the Saudi Exim CEO HE. Saad Alkhalb had said then: "Saudi Arabia is diversifying its export capability and intensely as part of Vision 2030 strategy. The two countries are already working closely together to strengthen trade ties to support the growth in export."
