Saudi Arabia’s Red Sea Development Company, which is building a tourism project on the kingdom’s Red Sea coast, said on Wednesday it had achieved financial close on its 14.12 billion Saudi riyals ($3.76 billion) term loan facility and a revolving credit facility with Saudi banks.
Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Saudi National Bank were the lenders that arranged the financing, the company said in a statement.
The loan represented the first riyal-denominated green finance credit facility and will be used to develop the first phase of the Red Sea project, it said.
“This year, we have proceeded at pace with the delivery of our flagship project, all the while mindful of our commitment to not only reduce our impact on the environment but actively deliver a 30 per cent net conservation benefit by 2040,” John Pagano, chief executive of the Red Sea Development Company, said.
“With our capital structure fully in place we will continue to focus on execution and delivery of the project, which remains on schedule to welcome first guests by the end of this year.”
The Red Sea Development Company, which is wholly owned by the kingdom’s Public Investment Fund, was established to drive the development of the Red Sea Project. The project is a luxury, regenerative tourism destination that aims to set new standards in sustainable development and position the kingdom on the global tourism map.
“We are pleased to have swiftly achieved financial close on the first ever riyal-denominated green financing for our initial phase … with this … our project gains additional credibility in the market and enhances the attractiveness to investors,” Jay Rosen, group chief financial officer of the Red Sea Development Company, said.
Saudi Arabia, the world’s biggest oil exporter, is rapidly transforming its economy as it aims to reduce its dependence on oil, nurture domestic industries, boost jobs and diversify revenue.
The Arab world’s largest economy's tourism projects include Qiddiya, a huge entertainment and sports project, and Neom, a $500bn futuristic city comprising a nature reserve, coral reefs and heritage sites on islands along the Red Sea.
The Red Sea Project expects to welcome the first guests by the end of this year, when the first hotels will open. Phase one, which includes 16 hotels, will be complete next year.
Upon completion in 2030, the project will include 50 resorts, offering up to 8,000 hotel rooms and more than 1,000 residential properties across 22 islands and six inland sites. The destination will also include an international airport, luxury marinas, golf courses, and entertainment and leisure facilities.