RIYADH: The Red Sea Development Co. (TRSDC) has finalized a SR14.12 billion ($3.76 billion) loan facility with four Saudi banks.
The lenders are Banque Saudi Fransi, Riyad Bank, Saudi British Bank and the Saudi National Bank. The funds will be used to push ahead with the first phase development of the flagship tourism project.
TRSDC is wholly owned by Saudi Arabia’s Public Investment Fund and its main focus is the Red Sea Project, which was announced by Crown Prince Mohammed bin Salman in 2017.
“The scale of this project is unmatched anywhere in the world and we are setting new standards in regenerative tourism at every turn,” TRSDC CEO John Pagano said. “By applying a unique approach to design, utilizing more sustainable methods of construction and using groundbreaking technology, we are not only reducing our impact on the environment but helping to deliver on our commitment to achieve a 30 percent net conservation benefit by 2040. It is this pioneering approach that has helped us secure the first ever riyal-denominated green finance credit facility.”
Four hotels and an international airport will open by the end of next year, with a further 12 hotels scheduled to open before 2023.
Upon full completion in 2030, the project will comprise 50 hotels offering up to 8,000 rooms and 1,300 residential properties across 22 islands and six inland sites.
The project has received backing from local developers and lenders, but Pagano told Arab News earlier this year that he was keen to tap into the international investment market. “Investors have choices, as you’ll appreciate, and they’ll apply different risk premiums depending on their perception of risk,” he said, adding that while it was currently an “an untried and unproven market,” he was optimistic that international investors would come on board once they got to see the project and the government’s plans for the area.
Work at the site is well underway and last year the developer announced it had awarded approximately $4 billion worth of construction projects.