Saudi Arabia has unveiled a set of financial and industrial initiatives aimed at empowering contractors and strengthening the construction ecosystem.
April 8, 2025
Saudi Arabia has unveiled a set of financial and industrial initiatives aimed at empowering contractors and strengthening the construction ecosystem, marking a significant milestone in the Kingdom’s journey toward economic diversification under Vision 2030.
Announced at the Private Sector Forum in Riyadh, the initiatives were presented by Mrs. Leyla Abdimomunova, Head of Real Estate & Construction at the Public Investment Fund’s (PIF) National Development Division. The programs are designed to address long-standing financing constraints and supply chain gaps in the sector.
One of the key programs, Infra-Guaranteed Financing, enables the National Infrastructure Fund to guarantee up to 50% of bank loans issued to contractors. This risk-sharing mechanism is expected to improve credit access for developers involved in critical infrastructure projects, allowing for greater project continuity and financial stability.
In parallel, Saudi Arabia has become the first country in the GCC to implement surety bonds, offering a flexible alternative to traditional bank-issued performance bonds. Surety bonds are widely used in international markets and are viewed as a more efficient and liquid form of securing project obligations, benefiting both contractors and project owners.
Beyond financing, the Kingdom is also investing in the localization of construction materials to meet the surge in demand from mega infrastructure developments. Spearheaded by PIF, the initiative aims to bridge at least 50% of the current supply gap through domestic manufacturing. Five new factories have already been established, with 20 more expected to be operational within the next two years.
These reforms are closely aligned with Saudi Vision 2030, reinforcing the Kingdom’s strategy to foster a more resilient, self-sufficient, and globally competitive construction sector.
By lowering financing barriers and strengthening local supply chains, Saudi Arabia is not only supporting contractors but also reshaping the risk and investment profile of the entire construction industry. The introduction of surety bonds and partial loan guarantees sends a strong signal of market maturity, aligning the Kingdom with global infrastructure financing standards. These steps are likely to enhance investor confidence, attract international players, and drive sustainable growth across the sector.
