Preparing the economic study for an ADF specialised project loan

The fund and its loans

The Agricultural Development Fund (ADF) is the Kingdom's lender to farming and food production. It approved SAR 6.5 billion in loans in 2025, across poultry, red meat, greenhouse farming, aquaculture and other activities, and its cumulative approvals since it was founded have reached around SAR 78 billion.

ADF's products range from development loans for individual farmers to specialised project loans for larger new projects, rehabilitation and expansion. It is the specialised project loans that require a full economic feasibility study.

When a feasibility study is required

For specialised project loans, the requirements include an economic feasibility study and a licence from the Ministry of Environment, Water and Agriculture. Individual applicants are asked for an electronic copy of the study that accurately sets out the technical, financial and marketing sides of the project, along with an agricultural record from the ministry.

The study does more than support the application. The fund's law requires financing to be determined according to an approved feasibility study, and the repayment period for specialised projects is set from the cash flow, the study and the fund's credit analysis. The numbers in your study shape the loan you get.

The structure ADF expects

ADF's beneficiary guide sets out the general requirements for specialised agricultural projects in five parts.

1. Project definition

The activity, location, land and water source, the owners and their experience, and exactly what the loan will finance.

2. Marketing study

Local demand and supply, imports, prices through the year, target customers and channels such as wholesalers, retailers, processors or contracts. For products exposed to imports or seasonal gluts, show how prices move through the year rather than a single average.

3. Technical study

The production system and why it suits the site, capacity, equipment and buildings, inputs such as feed, seed, fingerlings or day-old chicks, water and energy use, biosecurity and staffing.

4. Financial study

Investment cost, operating cost, revenue, working capital and cash flow over the life of the loan.

5. Evaluation

Profitability, payback, the project's ability to repay, and how sensitive the results are to yield, price and cost.

ADF also publishes its own guide to preparing an economic feasibility study and a guide to obtaining agricultural loans, both updated in April 2026. Read them alongside this one.

Getting the biology into the model

Agricultural models fail in ways factory models don't. The assumptions that decide the outcome are biological and seasonal:

• Yields and conversion rates: use local operating data where you have it. Supplier brochures describe ideal conditions.
• Mortality and losses: include them, by cycle, with a downside case for disease.
• Cycles and seasonality: model production by cycle or by month so the cash flow shows the gaps between harvests or batches.
• Water: show the source, the volume needed and its cost. Water is a policy priority in the Kingdom and a study that ignores it will be questioned.
• Energy: cooling, heating and pumping costs are often understated, especially for greenhouses and aquaculture.
• Working capital: feed and inputs for the first cycles must be funded before the first sales.

Collateral and the financing plan

ADF loans must be covered by eligible collateral. The fund's own material lists real estate, project assets, bank guarantees, corporate guarantees, investment portfolios and assignment of proceeds. The financing plan should state the owners' contribution, the amount requested and the security offered against it.

Common gaps

• Yields and survival rates that no operating farm in the region achieves
• Prices fixed at a single annual average
• Missing ministry licence or agricultural record at application
• No working capital for the first production cycles
• No downside case for a bad season or a disease outbreak
• Collateral not addressed in the study