The Saudi Export Import Bank (Saudi EXIM Bank) has signed an insurance agreement with Saudi Basic Industries Corporation (SABIC) to provide cover for the Saudi petrochemical giant's sales transacted on letter of credit (L/C) terms worldwide.

This is considered the largest insurance policy ever issued in the Middle East and the first of its kind to be offered directly to Saudi exporters to insure unconfirmed L/Cs from issuing banks.

International benefits

This strategic partnership will enable SABIC to insure their international sales across more than 40 countries against non-payment risks posed by the issuing banks.

It also significantly amplifies the prospects for the corporation's growth and penetration into new regional and international markets, and enhances the competitiveness of Saudi petrochemical exports.

Newest addition

The L/C insurance policy is the newest addition to the Saudi export credit agency's product offerings for the kingdom's exporters, according to Saudi EXIM Bank's CEO, Saad Al-Khalab.

He says it is "designed to enable SABIC realise its vision of becoming a world leader in petrochemicals and achieve more stability of cover and pricing in very critical export markets with high degree of geopolitical and economic challenges."

Echoing similar sentiments, SABIC's CEO, Abdulrahman Al-Fageeh, says "we expect the L/C insurance policy provided by the Saudi EXIM Bank to play a key role in driving our export expansion."

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.