RIYADH: Saudi Arabia is taking a flexible approach to distributing its SR10 billion ($2.66 billion) standardized incentive program to maximize its impact across industries, according to a senior official.
In an interview with Arab News on the sidelines of the Standard Incentives for the Industrial Sector event, Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef said the program is designed to align with investor demand and deliver optimal returns.
“We are now very flexible with regards to the split between different sectors because we would like to see, you know, how the appetite of the investor and where are the areas where maybe the program needs to focus more and put more effort,” Alkhorayef said.
The SR10 billion standardized incentive program, announced by Alkhorayef in his opening speech, aims to empower industrial investments and promote sustainable development.
Covering up to 35 percent of a project’s initial investment, capped at SR50 million per project, the program seeks to reduce reliance on imports by targeting sectors with high dependency on foreign products and no local production.
The initiative targets at least 200 projects, focusing on industries where the Kingdom relies heavily on imports.
“The impact is mainly going to be on the balance of payment where all of the products that we have targeted are products where we have a lot of imports but there is no local production,” Alkhorayef said.
The objective is to “reduce our imports” while enhancing the industrial sector’s capabilities through new products and technologies.
The program is inclusive, accommodating foreign and local investors. “Any investor who registers as a Saudi investor doesn’t have to be a Saudi national, so even foreign investors can tap into this opportunity,” Alkhorayef said.
Two key requirements guide eligibility: the project must align with targeted products listed in the program, and the program will contribute up to SR50 million, not exceeding 30 percent of the project’s total investment size.
To ensure effective fund allocation, an inter-ministerial committee with representatives from the ministries of industry, investment, economy, finance, and energy evaluates each project.
“They look at the different opportunities — what does the project bring to the table in terms of value, and then based on that, it’s allocated,” Alkhorayef said.
Unlike previous models tailored for large-scale projects, the current program has been designed to cater to SMEs.
“Today, we had to really design something that is more approachable by SMEs,” Alkhorayef added.
The minister emphasized the program’s focus on chemicals, automotive, and machinery sectors while maintaining flexibility to adapt to changing investor interests.
As part of Saudi Arabia’s Vision 2030 strategy, the incentive program aims to attract high-value investments, diversify the industrial base, and build a globally competitive manufacturing ecosystem.
