Saudi Arabia announced the allocation of SR10 billion ($2.66 billion) to activate the Standard Incentives Program for the Industrial Sector, followed by approval from the Council of Ministers last month.
The announcement was made during the Standard Incentives for the Industrial Sector event on Jan. 11.
This initiative seeks to spur growth in the industrial sector by accelerating investments and achieving sustainable industrial development in the Kingdom to elevate the competitiveness of Saudi industries globally.
Developing the industrial sector is crucial for Saudi Arabia as the Kingdom, under its Vision 2030 program, is pursuing an economic diversification journey by reducing its dependence on oil revenues.
“These incentives were developed within the framework of an integrated governmental effort, characterized by collaboration with various relevant government entities, particularly the pivotal role played by the Localization and Balance of Payments Committee,” said Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Alkhorayef.
He added: “This committee serves as the overarching body for shaping policies, directions, and initiatives that enhance the empowerment of industrial investments and support national talents.”
The incentives program offers coverage of up to 35 percent of the initial project investment, capped at SR50 million for each qualifying initiative.
The program is divided evenly across the project lifecycle, granting 50 percent during construction and the remaining 50 percent during production.
The first phase of this program will target investments in chemical conversion industries, the automotive sector, and machinery and equipment.
The incentives program will be rolled out to other industry segments in subsequent phases in the latter part of this year.
“This program is the first of its kind in the region and aims to enable the manufacturing of products that are not currently produced in the Kingdom. It opens new horizons for high-quality investments and allows both local and international investors to benefit from the unique capabilities the Kingdom possesses,” said Alkhorayef.
He added: “The Standard Incentives Program has been designed to focus on achieving localization and local content targets, as these are fundamental elements for sustainable development.”
The minister further highlighted that through the program, Saudi Arabia aims to empower industries that enhance the utilization of the Kingdom’s natural resources and increase reliance on local talent, contributing to reducing imports, strengthening the balance of payments, and fostering economic resilience.
During the event, Saudi Arabia’s Minister of Investment Khalid Al-Falih said that the Standard Incentives Program marks a significant step toward realizing the objectives of the Kingdom’s Vision 2030 and National Investment Strategy.
“The program seeks to achieve the Vision 2030 goals in the short and medium term, including increasing non-oil exports to 50 percent of the size of the non-oil economy and localizing critical materials essential to the economy,” said Al-Falih.
Source:https://www.arabnews.com/node/2586117/business-economy