Firstly, the name of the SRC block mode is case-sensitive. It should be sql
instead of SQL
.
#+BEGIN_SRC sql
SELECT foo FROM bar
#+END_SRC
Secondly, the initial font-lock of sql-mode seams not to highlight SQL keywords, (at least to me, it looks no difference no matter you turn it on or off). Therefore, you need to specify which kind of SQL you want to highlight. If you are using MySQL for example:
(add-hook 'sql-mode-hook
(lambda ()
(sql-highlight-mysql-keywords)))
Then Restart Emacs. It should work now.