Saudi Fund For Development

The Saudi Fund for Development (SFD) (Arabic: الصندوق السعودي للتنمية) is a Saudi Arabian government agency that assists developing countries by financing social and infrastructure projects. Its development program seeks to support the economies of recipient countries by enhancing economic growth and promoting job opportunities. It also administers loans and grants extended by the Saudi government to developing countries. The SFD was established in 1974 and began operations in 1975. As of today, it is involved in approximately 3,750 projects across 71 countries. The fund is led by Ahmed bin Aqeel Al-Khateeb, who also serves as the Minister of Tourism for Saudi Arabia.

History

The Saudi Fund for Development (SFD) traces its origins to a pivotal moment in Saudi Arabia’s foreign policy history. On 1 September 1974, the Saudi government, under the leadership of King Faisal bin Abdulaziz Al Saud, issued Royal Decree No. M/48, formally establishing the SFD as an autonomous development finance institution. This landmark decision reflected the Kingdom’s growing economic influence following the 1973 oil boom, which significantly increased state revenues and enabled Saudi Arabia to expand its international aid commitments.  

The creation of the SFD was driven by a dual purpose: "solidarity with developing nations" —particularly in the Islamic world—and the promotion of "long-term socioeconomic development" through structured financial assistance. Unlike traditional aid models, the SFD was designed to operate as a semi-independent entity, combining government oversight with the flexibility to engage in project-based financing. Its founding principles were deeply rooted in Islamic teachings on charity (Zakat) and cooperation, aligning with Saudi Arabia’s broader foreign policy objectives of fostering stability and prosperity in partner nations.  

In its early years, the SFD focused on infrastructure development, prioritizing roads, bridges, hospitals, and educational facilities in Arab and Muslim-majority countries, many of which were recovering from post-colonial transitions or conflicts. The fund’s initial capital was drawn from Saudi Arabia’s National Reserves, and its operations were closely coordinated with the Ministry of Finance to ensure alignment with the Kingdom’s strategic interests. By the late 1970s, the SFD had already begun establishing itself as a key player in development financing, setting the stage for its eventual expansion into a globally acknowledged institution.

Funding

the SFD’s capital was SAR 31 billion (USD 8.3 billion), up from an initial investment of SAR 10 billion (USD 2.6 billion).
The SFD has contributed official development assistance (ODA) to 1,000 projects in 85 countries through loan and grant mechanisms.
In 2017, the SFD was responsible for 43.9% of ODA disbursed by Saudi government agencies.

The SFD delivers funding bilaterally and is also engaged in the multilateral development system, working with organizations such as the United Nations, the World Bank, The Arab Fund for Economic and Social Development, Arab Bank for Economic Development in Africa, Islamic Development Bank, OPEC Fund for International Development, and the French Development Agency.

SFD’s funding is multi-regional and provides development assistance to all developing countries, prioritizing the least developed and low-income countries. According to the World Bank, SFD is one of the most globally active of Arab international development funds, financing projects on many continents, including in Europe and South America.

As of 2024, the SFD marked its 50th anniversary, having financed over 800 development projects across more than 100 countries, with total contributions exceeding $20 billion, a decrease from the previously reported over 1,000 projects in 85 countries as of July 2019.

The SFD continues to prioritize assistance to lesser developed and low-income countries, operating across various regions, including Africa, Asia and the Pacific, Latin America and the Caribbean, and Eastern Europe.

Recent projects include a $75 million investment to strengthen irrigation infrastructure in Serbia, demonstrating SFD's commitment to sustainable development.

Official development assistance

In 2014, Saudi Arabia's gross ODA amounted to SAR 54 billion (USD 14.4 billion), representing 1.90% of the country's Gross National Income (GNI). This exceeded the agreed international 0.70% ODA/GNI target.

In the same year, Saudi Arabia ranked higher in contributions than 28 other DAC member countries, including the United Kingdom (0.70%) and the United States (0.19%).

Saudi Arabia became a Development Assistance Committee (DAC) Participant of the Organization for Economic Cooperation and Development in 2018 and began reporting its ODA contributions that same year, becoming one of the largest providers in terms of volume, with increasing levels of ODA.

As of 2020, Saudi Arabia ranked fifth globally and first in the Arab world for its provision of humanitarian aid. According to the UN Financial Tracking Service platform, Saudi Arabia contributed SAR 4.8 billion (US 1.2 billion), or 5.5% of the total amount of international spending on relief programs.

Multi-country programs

SFD’s methodology has been to assess the needs of nations in areas such as energy, water, and transportation, and work to finance projects that address particular needs, in alignment with the UN Sustainable Development Goals.
In response to the COVID-19 pandemic, SFD, as a member of the Arab Coordination Group, contributed funding to help developing countries economically recover from the recession caused by the pandemic. Collectively, the Arab Coordination Group has committed SAR 375 billion (US $10 billion) to this specific effort.

The SFD has contributed to financing 147 development projects and programs in the water sector, including water security, in various developing countries.

The SFD partnered with the United Nations Development Programme (UNDP) to provide water to drought-affected communities in Somalia, aiming to strengthen local water governance.

Reducing isolation in landlocked countries

SFD has supported transportation and infrastructure projects designed to reduce social and economic isolation in landlocked countries in Africa. The absence of infrastructure and connectivity among these countries has resulted in a decrease in exports, given that transport costs account for approximately 77% of export value. This has had an impact on landlocked countries’ abilities to trade with their neighbors.

To combat this, SFD has contributed to the financing of several internal and external road projects in Burkina Faso, Ethiopia, Niger, Mali and Chad, linking them to seaports in Djibouti, Ghana and Mauritania. Due to their geographical location, these countries have experienced social and economic challenges. The development of roads and transportation links is expected to enhance trade and connectivity in the region, potentially generating jobs and increasing business opportunities for small and medium sized enterprises (SMEs).

Saudi program for wells and rural development in Africa

SFD established this program to mitigate the effects of drought in rural regions in several African countries. Under the program, over 6,000 water facilities have been equipped, and 2.5 million people have secured improved access to water. The program not only focuses on providing access to clean water but also supports agricultural sustainability and rural livelihoods by enabling irrigation for farming communities. It has been implemented in partnership with local governments and international organizations, ensuring long-term impact. In addition to water wells, the initiative includes the construction of small dams, water storage facilities, and sanitation infrastructure to improve public health outcomes in affected regions.

Partnerships and multi-lateral official development assistance

SFD partners with international organizations such as the World Bank and the United Nations, supporting their branches including the United Nations International Children's Fund (UNICEF) and the United Nations High Commissioner for Refugees (UNHCR). It has also built partnerships with the development funds in other states to aid multilateral approaches, working on relationships with organizations such as the Agence française de développement (AFD), the Japan International Cooperation Agency (JICA), and, before its dissolution, the United Kingdom’s Department for International Development (DFID).

SFD also collaborates with regional development partners such as the Islamic Development Bank (IsDB), Arab Bank for Economic Development in Africa (BADEA), the Abu Dhabi Fund for Development (ADFD), the Kuwait Fund for Arab Economic Development (FKDEA), the OPEC Fund for International Development (OFID), the ECOWAS Investment and Development Bank (EBID) and the West African Development Bank (BOAD).

United Nations High Commissioner for Refugees (UNHCR)

Saudi Arabia, via SFD, is a leading global donor to UNHCR. SFD has provided more than SAR 200 million (US $54 million) to 11 UNHCR projects. According to the UNHCR, Saudi contributions have enabled a continued humanitarian response in the Middle East and other regions, particularly to those affected by the Yemen, Syria, Afghanistan, and Rohingya crisis.

SFD has supported the UNHCR’s humanitarian efforts in refugee camps, such as the Al-Azraq Camp in Jordan. SFD has provided SAR 34.5 million (US $9.2 million) to two projects to support the construction of an electrical network system in the camp. Implemented in two phases, the electrical network will connect all shelters, plot lighting, markets, and various public spaces in the Al-Azraq camp to the electrical grid, improving access to electricity for more than 25,000 Syrian refugees living in the camp.

United Nations Relief and Works Agency (UNRWA) for Palestine refugees in the near east

SFD has a long-standing history of supporting Palestinians through UNRWA projects. In 2019, Saudi Arabia, through SFD, was recognized as one of the top three largest donors to UNRWA and has donated SAR 3 billion (US $800 million) to the agency since 1994.

To date, SFD has contributed to 34 UNRWA programmes and projects in support of Palestinians, such as large-scale maintenance projects that will ensure that 268 schools and health centers in Syria, Jordan, Gaza, Lebanon, and the West Bank, including East Jerusalem are structurally sound.
These projects include support to maintain Palestinian refugee camps in different countries in the Middle East such as the UNRWA Al-Safsaf School in Dera’a refugee camp in Syria, which was inaugurated in 2020.
SFD’s funding has also contributed to the renovation of schools in the West Bank, where 46,000 Palestinian refugee children were educated during the 2019-2020 academic year at 96 schools run by the UNRWA.

United Nations Development Programme (UNDP)

SFD has partnered with the UNDP on several projects in the Gaza Strip to provide housing that benefits approximately 13,466 families from the region. In February 2020, SFD signed an additional SAR 37.5 million (US $10 million) agreement with UNDP and UNRWA to fund the repair and reconstruction of houses in the Gaza Strip. This fourth amendment brings the total SFD contribution to SAR 306 million (US $81.5 million).

SFD has also provided SAR 43.7 million (US $11.6 million) to the UNDP to develop the infrastructure of the Swat district in Pakistan. As a result, more than 800,000 people in the Swat district of Khyber Pankhurst province will benefit from the restoration of 639 ongoing basic community infrastructure schemes.

United Nations International Children's Fund (UNICEF)

UNICEF has recognized Saudi Arabia for its support of UNICEF, stating it had contributed significantly to development projects that benefit millions of children around the world. SFD has supported UNICEF with SAR 86 million (US $23 million) for education, health, nutrition, and water and sanitation services in Pakistan, culminating in the development of schools in the Swat Valley region of Pakistan.

Areas of geographical cooperation

SFD is one of Africa’s largest contributors to aid sustainable development. Since 1975, it has contributed SAR 38 billion (US $10 billion) in financial assistance to more than 400 development projects in 46 African countries. SFD has worked on several cross-border projects, such as the Tadjoura Port, in Djibouti, and the development of transport links in West and Central Africa. Other African countries include Burkina Faso, Burundi, Comoros, Chad, Djibouti, Egypt, Ethiopia, Gambia, Kenya, Liberia, Mauritius, Mauritania, Morocco, Sudan, and Tunisia.
In 2019, SFD signed two loans worth SAR 367 million (US $97.8 million) to finance the construction of roads and schools in Afghanistan. SFD also works with countries in Asia such as Bahrain, Jordan, Maldives, Nepal, Kyrgyzstan, Uzbekistan, and Sri Lanka.
To date, SFD has contributed SAR 1.5 billion (US $411 million) in financial assistance to more than 21 countries in Europe, South America, and the Caribbean. SFD is financing and supporting infrastructure projects in European countries such as Albania, Bosnia and Herzegovina, Republic of Kosovo alongside projects in South American and Caribbean countries including Brazil, Cuba, and Jamaica.

References

{{DEFAULTSORT:Saudi Fund for Development (SFD)
1974 establishments in Saudi Arabia
Government agencies of Saudi Arabia