RIYADH: The Saudi Public Investment Fund has closed its first Murabaha credit facility, securing $7 billion in funding. This is a key step in the fund's plan to raise capital over the next several years. 

The Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions, according to a press release. 

A murabaha credit facility is a financing structure compliant with Islamic principles, where the lender purchases an asset and sells it to the borrower at an agreed profit margin, allowing repayment in installments. This structure avoids interest, adhering to Shariah laws. 

“This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia,” said Fahad Al-Saif, PIF’s head of the Global Capital Finance Division and head of Investment Strategy and Economic Insights Division. 

The facility builds on PIF’s recent success with sukuk issuances over the past two years, further bolstering its financial strength and commitment to best practices in debt management. 

Rated Aa3 by Moody’s and A+ by Fitch, both with stable outlooks, PIF continues to solidify its position as a global financial powerhouse. 

The fund’s capital structure is supported by four main funding sources, including contributions from the Saudi government, asset transfers, retained investment earnings, and financing through loans and debt instruments. 

PIF’s strategy focuses on financing initiatives that contribute to economic growth in Saudi Arabia and internationally. 

The $7 billion murabaha credit facility is expected to bolster PIF’s liquidity, supporting its investments both locally and globally. 

By diversifying its funding sources through a Shariah-compliant structure, PIF looks to enhance its financial partnerships while complementing its existing financing tools, such as sukuk issuances. 

This aligns with its medium-term capital strategy, ensuring flexibility, competitive financing terms, and risk mitigation. 

Earlier in January, the National Debt Management Center also secured a Shariah-compliant revolving credit facility worth SR9.4 billion ($2.5 billion). 

The three-year facility, supported by three regional and international financial institutions, is designed to meet the Kingdom’s general budgetary requirements. 

Aligned with Saudi Arabia’s medium-term public debt strategy, the arrangement focuses on diversifying funding sources to meet financing needs at competitive terms. 

It also adheres to robust risk management frameworks and the Kingdom’s approved annual borrowing plan. 

PIF has been actively engaging in credit arrangements to support its investment initiatives and the Kingdom’s Vision 2030 economic diversification plan. 

In August 2024, PIF secured a $15 billion revolving credit facility for general corporate purposes, replacing a similar facility agreed upon in 2021. 

In addition to the revolving credit facility, PIF has diversified its financing instruments by issuing a $2 billion seven-year Islamic sukuk earlier in 2024 and planning to issue bonds in pounds sterling. 

These efforts are part of PIF’s strategy to leverage a variety of funding sources to support its expansive investment activities. 

RIYADH: Expatriate remittances from Saudi Arabia rose to SR12.03 billion ($3.21 billion) in November, marking an 18.73 percent increase compared to the same month of 2023, new data showed. 

Figures from the Kingdom’s central bank, also known as SAMA, indicated that remittances sent abroad by Saudi nationals totaled SR6.17 billion, reflecting a 22.71 percent increase during this period. 

Saudi Arabia’s rising remittance flows underscore its growing prominence as a global economic hub and a premier destination for expatriate workers. 

According to the latest Saudi government census released in May 2023, expatriates comprise 41.6 percent of the Kingdom’s population. Among the largest expatriate communities are 2.12 million Bangladeshi nationals, followed by 1.88 million Indians and 1.81 million Pakistanis. 

These sizable populations highlight the scale of remittance transfers from the Kingdom, driven by competitive salaries, tax-free income, and comprehensive employee benefits. 

This dynamic has positioned Saudi Arabia as a major contributor to remittance-dependent economies, supporting millions of families in South Asia, the Middle East, and Africa. 

The Kingdom ranked second in the 2024 InterNations Working Abroad Index, reflecting its appeal to professionals across sectors such as finance, health care, and technology. 

The Vision 2030 initiative, aimed at diversifying the economy and boosting investment, has spurred unprecedented growth in job opportunities, particularly as new industries emerge and existing sectors expand. 

Expatriates in Saudi Arabia often benefit from attractive compensation packages that include housing allowances, health insurance, children’s education funding, and annual flights home. 

With limited personal living expenses and no income tax, expatriates enjoy significant disposable income, enabling them to remit substantial amounts to their home countries. 

According to World Bank data, the Kingdom ranks among the most affordable countries for remittance transfers, thanks to competitive fees and streamlined processes. 

Digitalization is reshaping how remittances are managed, further enhancing efficiency and accessibility. Saudi Arabia’s fintech landscape, buoyed by the Vision 2030 Financial Sector Development Program, has introduced a range of innovations. 

Mobile banking apps, online payment gateways, and partnerships with global remittance platforms have simplified transactions. Services such as the Saudi Payments Network, or Mada, and the adoption of blockchain technology by local banks have improved transfer security and speed. 

Additionally, increased competition in financial services has driven down costs, making transfers more affordable compared to global standards. 

The growing reliance on digital channels aligns with the Kingdom’s broader push toward a cashless economy. Remittance platforms integrated with mobile wallets and QR-based payments have democratized financial access, especially for lower-income workers. 

As Saudi Arabia continues to implement Vision 2030’s transformative agenda, remittance flows are expected to remain robust. 

The Kingdom’s focus on diversifying its economy, creating a business-friendly environment, and investing in technology will likely attract even more expatriates. 

With stronger remittance infrastructure and growing digital adoption, the ease, affordability, and volume of transfers will further enhance the global economic impact of expatriate labor in Saudi Arabia.