Saudi Arabia sends $1.2B in aid to Yemen

Saudi Arabia, which has led a years-long military coalition in Yemen, has announced a $1.2 billion grant for the war-scarred country's internationally recognised government, the latest attempt to prop up its economy.

"This money will help ease pressure on the Yemeni economy ... we count on this a lot," Finance Minister Salem bin Brik said on Tuesday during a signing ceremony in Riyadh.

The money will help the government address its budget deficit and also fund salaries for civil servants and "support for ensuring food security", the official Saudi Press Agency said.

An initial instalment of $250 million was expected to be disbursed on Wednesday, a Yemeni official told AFP news agency, speaking on condition of anonymity because he was not authorised to brief the press.

Saudi officials say they had no choice when, in 2015, they formed a military coalition and sent in fighter jets to support Yemen's government against the Iran-backed Houthi rebels, who had seized the Yemeni capital Sanaa and then advanced south, forcing Yemen's president to flee to Riyadh.

Fighting has dropped off sharply since a United Nations-brokered truce took effect in April last year, even though it lapsed in October.

However, more than two-thirds of Yemenis depend on aid to survive, in what was the Arabian peninsula's poorest country even before the war.

Seeking 'de-escalation'

The UN special envoy for Yemen, Hans Grundberg, said in June that "economic warfare" between the opposing sides had compounded the country's problems.

At the end of last year, Houthi drone attacks on government-run oil terminals halted hydrocarbon exports, the main source of income for the Saudi-backed government, which is headed by an eight-member Presidential Leadership Council unveiled in Riyadh shortly after the truce began.

The government has struggled to finance basic services and pay salaries.

Rashad al Alimi, who heads the Leadership Council, said the new Saudi support "for the state's general budget, once again confirms the Kingdom's honourable position and its committed approach to supporting our Yemeni people, their constitutional legitimacy and alleviating their human suffering."

Alimi made his comments on Twitter which is being rebranded as "X".

The Saudi Development and Reconstruction Program for Yemen has touted Riyadh's efforts to ease Yemen's economic woes, including a $1 billion deposit in the central bank earlier this year, a $600 million oil derivatives fund and $400 million for development projects such as housing and hospitals.

A surprise rapprochement deal announced in March between Saudi Arabia and Iran, which backs the Houthis, raised hopes for a durable ceasefire in Yemen.

The following month, Saudi Ambassador Mohammed Al Jaber travelled to Sanaa for talks with Houthi officials.

Those meetings ended without a new agreement, though Jaber said in May he believed all parties were "serious" about wanting peace.

At the signing ceremony on Tuesday, Jaber said the $1.2 billion grant was "one of the different steps taken by Saudi Arabia to support peace" and "de-escalation".

"We will continue to speak to the Houthis and also to the government of Yemen to bring peace and stability to Yemen," he said, though he offered no details on next steps for talks.