Document background
The Forward Funding Agreement is utilized in Saudi Arabia when a funder agrees to finance a development project from its early stages, typically before construction begins. This document is essential for large-scale development projects where traditional lending structures may not be suitable or Sharia-compliant. The agreement must carefully navigate Saudi Arabian legal requirements, including compliance with Islamic finance principles, real estate regulations, and commercial laws. It typically includes detailed provisions for funding disbursement, construction monitoring, risk allocation, and project completion guarantees. The Forward Funding Agreement is particularly important in the Saudi market where real estate development often requires specialized financing structures that align with both commercial objectives and religious principles. The document serves as a comprehensive framework for managing the relationship between funders and developers throughout the project lifecycle.
