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Saudi Arabia seals $11bn syndicated bank loan

By Matt Smith
Industrial and Commercial Bank of China (ICBC) was the primary lender in the Saudi syndicated loan Oriental Image via Reuters Connect
Industrial and Commercial Bank of China (ICBC) was the primary lender in the Saudi syndicated loan
  • Infrastructure loan worth $11bn
  • China’s ICBC lead arranger
  • Total projects worth $1.5trn

Saudi Arabia has concluded an $11 billion syndicated loan arranged from a group of lenders to help fund its vast infrastructure developments in what an adviser to the agreement describes as the largest government loan worldwide this year.

The 10-year facility is also the biggest loan to any borrower in Europe, the Middle East and Africa in 2023, according to the US law firm Milbank, which advised Industrial and Commercial Bank of China.

ICBC, the lead arranger, was one of 18 banks in the syndicate. Others include First Abu Dhabi Bank, Dubai’s Mashreq, Citigroup and HSBC. Chinese lenders committed around $5 billion.

Saudi Arabia will use the money from the syndicated loan to help finance numerous infrastructure projects, as part of its Vision 2030 economic diversification programme, “as well as general budgetary purposes”, Milbank wrote in a statement on Thursday.

The kingdom’s non-oil sector now accounts for well over half of GDP, S&P Global Ratings wrote in a note in September affirming Saudi’s stable ratings outlook.

S&P forecasts that Saudi Arabia will post a government deficit in 2023, but will return to small surpluses from 2024 to 2026.

The kingdom has signed off on $78 billion of construction projects so far this year, up 42 percent from $54.5 billion in 2015, just before the announcement of the Vision 2030 programme. 

The total value of ongoing projects in Saudi Arabia was $1.5 trillion at the end of October, according to the Saudi Contractors Authority.

Just over a year ago, the real estate consultancy Knight Frank described the kingdom as “the biggest construction site the world has ever seen”, even before Riyadh won hosting rights for Expo 2030 and the World Cup 2034.

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