The UK government is finalising a $2bn loan guarantee for the most valuable company in the world - and one which it is currently hoping will list in London.
UK Export and Finance (UKEF) is close to signing off a "significant" finance facility with Saudi Aramco, hoping it will be used to support making purchases from UK businesses.
A spokeswoman told City AM it was unrelated to ongoing efforts to woo the state-owned oil and gas giant, which is currently mulling whether to list on the London Stock Exchange.
She said: “UK Export Finance works to increase UK exports by providing finance to overseas buyers of our goods and services. As part of this, we will be providing Saudi Aramco with support in the form of credit guarantees to procure from the UK.
"This builds on previous support for UK exports as part of Saudi Aramco joint venture projects. In the coming months UKEF will be running a series of exporter events to help connect British suppliers with Aramco to fully realise the mutual benefits of this support.”
But the move has come under criticism from some who see it as part of ongoing attempts to lure Aramco to London for its IPO.
Former Treasury official Nick Macpherson tweeted that "guaranteeing a loan to Aramco would be a further lurch in descent to mercantilism. Mr Gladstone will be turning in his grave".
Saudi Arabia is considering floating five per cent of the firm, which crown prince Mohammed bin Salman recently indicated was worth more than $2 trillion.
However, there is little transparency around the firm and its listing has proved divisive within the City and Westminster.
Both Conservative MPs such as Treasury select committee chair Nicky Morgan and Labour MPs such as Rachel Reeves, who heads the Business, Innovation, Enterprise and Skills committee, have urged caution.
Morgan reiterated her concerns today, telling City A.M. it was important the UK's listing rules remained intact to protect the UK's reputation. She noted people "might ask questions" about the loan.
Roger Barker, director of corporate governance and professional standards at the Institute of Directors (IoD), told City A.M. the business group would be "delighted" if Aramco listed in London, but added: "We don't feel the FCA should be watering down the listing rules in order to achieve that".
"People may feel the government is doing everything possible to get Aramco to list in London," he said, adding: "It's almost mercantilist business approach, with each country trying to lure business in its own direction. There are different ways to do that but a race to the bottom is the wrong way."
The government loan comes on the top of almost £500m already handed to the oil and gas giant over the last five years, most recently for the Sadara chemicals project, Saudi Aramco's joint venture with Dow Chemicals.
It follows the doubling of UKEF’s market capacity limit to a maximum of £5bn in the 2016 Autumn Statement.