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Suppliers’ Credit Insurance (a- Project Finance Insurance)

Suppliers’ Credit Insurance (a- Project Finance Insurance)
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​This financial product protects banks and financial institutions from the risk of non-payment on project finance facilities. The lending bank or financial institution obtains an insurance policy from the Saudi EXIM bank, which then compensates the bank or financial institution if the obligor defaults on repayment. Saudi EXIM bank then recovers the amount from the obligor or contractor and shares a portion of the recovered funds with the lending bank or financial institution.

Properties
Product Method

1- The lending bank enters into an insurance policy contract with Saudi EXIM and pays the insurance premium.
2- The lending bank provides financing to the Saudi exporter or contractor related to the implementation of an export-generating project.
3- In case the project or contractor fails to pay, the lending bank files a claim to Saudi EXIM, which indemnify the lending bank for the loss.
4- Saudi EXIM recovers the amount from the project and returns a share to the lending bank according to their risk-bearing ratio after deducting fees and legal costs.

Product Advantages

- Facilitating access for contractors, developers, and manufacturers in Saudi Arabia to credit facilities with suitable terms from commercial banks to implement export-generating projects.
- Financing contracts for factory construction, expansion, maintenance contracts, as well as research and development, technology transfer, training, and capacity building.
- Financing international procurement contracts (such as engineering, procurement, and construction contracts).

The Sectors Eligible to Benefit from The Product

All sectors except crude oil

Duration of Insurance Coverage

Not exceeding 15 years

Financing Limit for Coverage

Up to 90%

Eligibility

​Financing banks or financial institutions

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