The Kingdom is also developing a cultural, sports and entertainment city, a $500 billion futuristic city known as NEOM and a luxury destination on its northwest coast.
Tuesday 27, August 2019
The Red Sea Development, the firm that is transforming an archipelago, desert and mountains, an area about the size of Belgium on Saudi Arabia’s Red Sea coast into a global tourism destination is talking to banks to raise $3.5 billion, reported Bloomberg.
The company started discussions with local lenders for a SAR 13 billion loan in what would be its first borrowing, the loan may have a 15-year tenor and is likely to be backed by the Kingdom’s sovereign wealth fund.
The terms of the financing may change, and the company hopes to complete a deal by the end of the year.
Jay Rosen, the Head of Finance and Investments at the Red Sea Development Company, said, “We are in active discussions with a number of banks to provide debt financing and are encouraged by the overwhelmingly positive response we have received.”
Saudi Arabia is developing its coastline as part of plans to transform the economy and cut its reliance on oil, the project will cover 90 islands and 28,000 km.
The first phase of the Red Sea project is expected to be completed by 2022. When fully completed in 2030, the company expects the development to create as many as 70,000 jobs and contribute as much as $5.9 billion to the Kingdom’s gross domestic product.
“Construction has already commenced as we have awarded over SAR 1 billion of work in connection with enabling infrastructure,” said Rosen.