RECORD US LOAN BACKS SAUDI PETROCHEMICAL PROJECT
By Gordon Platt
The US Export-Import Bank approved a $5 billion loan to Sadara Chemical, a joint venture of Saudi Aramco and Dow Chemical, to finance US exports needed to build the largest petrochemical complex ever constructed in a single phase.
Ex-Im Bank said the financing would support about 18,400 US jobs, making it the agency’s largest job-supporting financing to date.
Located in Jubail Industrial City II in the Eastern Province of Saudi Arabia, the complex will produce 10 major categories of chemicals and specialty plastics that will be marketed globally.
More than $80 billion worth of contracts will be awarded in Saudi Arabia next year, according to MEED Investment, which held a conference in Riyadh. The kingdom is the largest construction market in the region.
General Electric of the US said it would invest $1 billion to help create a culture of innovation and research and development in Saudi Arabia. GE will build an innovation center in Dhahran and will support healthcare and energy initiatives.
Takaful, or shariah-compliant insurance, is a growing niche in the wider insurance industry and could present some risks, according to S&P. “We remain concerned by widespread use of high-risk investment strategies by takaful providers, and by the sector’s lack of global standards in areas such as accounting and shariah compliance,” the ratings agency said. “In our view, it is unclear how many of the companies involved will sustain their profitability over the longer term, particularly in the GCC [Gulf Cooperation Council] region.”