The Kingdom of Saudi Arabia (KSA) continues to develop and promote initiatives to modernize and accelerate its economy and attract international investment. Align with this goal, on 11 January 2025, government entities in the KSA announced funding of SAR10 billion (£2.19 billion) for the Standard Incentives Programme to activate and support the industrial sector.
This announcement follows the release of the National Industrial Strategy (NIS) late last year (link here). The NIS intends to be a "comprehensive roadmap" that accelerates and diversifies the industrial developments in the KSA to "build an agile and competitive sustainable private sector-led industrial economy". One of the key initiatives under the NIS is to provide incentive packages to attract global investors and to accelerate the KSA's role as a leader in intellectual property for the industrial sector. The NIS also identified that incentives were to support increased exports in targeted industries (particularly maritime industries, medical technology and building materials).
The Standard Incentives Programme offers funding of up to 35% of the initial project investment (capped at SAR50 million for each qualifying project). The support is divided evenly across the project lifecycle, granting 50% during the construction phase and 50% during the production phase.
This programme is initially offered to investments in transformative chemical industries, automotive manufacturing and parts, and machinery and equipment. Further successive phases of funding will be announced throughout 2025. The focus of this programme is to develop the manufacturing of products not currently produced in the KSA and develop national resources and talent.
This funding is aligned with KSA's "Vision 2030" which aims to increase the diversification of the economy and promote international investment in the region. This announcement highlights the ongoing importance of manufacturing in both the MENA region and internationally, while also demonstrating the role manufacturing plays in diversifying national economies and encouraging international investment.
Turki Alsheikh, our Deputy Regional Managing Partner - Middle East, highlights that this type of initiative will benefit domestic companies, through the provision of incentives and developing national resources, and international companies, by providing a level of financial security and support in particular industrial sectors.
Emerson Holmes, the Head of our Manufacturing and Industrial Sector, notes that the efforts by the KSA government are welcomed and is an example of an important, and practical, government initiative which supports sectors that will be key to growth in the region (for both short-term and long-term goals).
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