Saudi Fund for Development marks 50 years supporting emerging economies

Fifty years into its mission, Saudi Arabia's development fund has become one of the world's largest sources of concessional financing for emerging nations—a role that has only grown more consequential as geopolitical fractures widen across the globe. The Saudi Fund for Development, established in 1974 and operational since 1975, has now financed more than 800 projects across more than 100 countries, channeling over $21 billion in soft loans and grants into health, education, transport, water, and energy infrastructure. The fund's reach extends from Africa to the Pacific, from the Middle East to South Asia, moving capital and expertise to places where traditional lending often does not flow.

This year alone, the fund's activities illustrate the breadth of its engagement. In January, the fund committed $2 million to Somalia for a water security initiative—drilling wells and installing solar-powered supply networks in rural areas as part of a larger program that has already delivered clean drinking water to more than 5 million people across Africa since 1982. That broader effort, the Saudi Well Drilling and Rural Development Program, has constructed more than 10,000 potable water facilities across 20 African countries over four decades. The Somalia grant represents continuity in a decades-long commitment to a region where water scarcity remains a life-or-death issue.

In February, the fund signed its first development loan with Suriname—$20 million to expand the South American nation's power generation, transmission, and distribution systems. The project targets Paramaribo and Nickerie, aiming to strengthen electrical grids and boost supply to communities that have long struggled with energy access. That same month marked the beginning of what the fund described as a new chapter in its relationship with the country, a signal that the fund is actively expanding its geographic footprint beyond its traditional zones of operation.

The Maldives has become a focal point of the fund's 2025 work. In April, the fund committed an additional $17 million to expand Velana International Airport, bringing its total investment in the facility to $217 million. The expansion will add terminal buildings for international and domestic flights, plus a seaplane terminal, designed to increase annual passenger capacity from current levels to 7 million, with infrastructure prepared to eventually handle 15 million. The same month, the fund signed a $25 million loan for an affordable housing project that will deliver more than 400 integrated housing units to over 2,700 residents, including infrastructure designed to withstand cyclones and flooding—a critical concern for a nation vulnerable to climate-driven disasters. Since 1978, the fund has provided 17 loans to the Maldives, financing 14 projects worth more than $488 million across transportation, water, sanitation, health, and infrastructure.

In April, the fund also signed its first-ever development loan with the Solomon Islands—$10 million to finance a renewable energy project. The money will support construction of solar power plants with a combined capacity of 35.5 megawatts, integrated with hourly energy storage systems. The fund framed the initiative as a step toward reducing reliance on conventional energy sources while advancing the UN Sustainable Development Goals, and as a marker of its growing commitment to small island developing states facing compounded economic and environmental pressures.

Tunisia has been a long-standing partner. In March, the fund handed over 330 residential units in the Ben Arous governorate as part of a larger social housing project financed through $150 million in concessional loans aimed at delivering 4,715 units across multiple governorates. In June, the fund signed a $38 million agreement to finance an Oasis Hub Project in southern Tunisia, supporting the reclamation of more than 1,000 hectares of agricultural land, the drilling and equipping of 22 wells, the expansion of rural villages and their infrastructure, and the construction of over 285 housing units. The project also includes roads, pipelines, water networks, and educational and agricultural facilities. Since beginning operations in Tunisia in 1975, the fund has financed 32 projects worth more than $1.2 billion in concessional loans, plus over $102 million in grants.

What emerges from this year's activity is a fund operating at scale and with strategic intent—not simply responding to requests, but actively positioning itself as a development partner for nations facing infrastructure deficits, energy shortages, water scarcity, and housing crises. The fund's model relies on concessional terms: loans offered at below-market rates and with extended repayment periods, designed to be affordable for governments with limited fiscal capacity. In a world where geopolitical tensions are fragmenting traditional alliances and development partnerships, the fund's work suggests that Saudi Arabia is using development finance as a tool of statecraft and influence, while simultaneously addressing genuine needs in some of the world's most vulnerable economies.