RIYADH: The Red Sea Development Co. is preparing the ground for green finance in Saudi Arabia, opening the door to a larger group of regional and global investors for the company, CFO Jay Rosen told Al Arabiya today.
Public Investment Fund-owned Red Sea finalized a 15-year SR14.12 billion ($3.76 billion) green loan facility with four Saudi banks on Tuesday.
“I think that this loan is important on more than one level,” Rosen said. “First, it is part of the Kingdom’s 2030 vision, and we are the first mega-project of the vision projects to reach the market and enter the capital markets. The other important element that truly marks a milestone for us is that this loan is the first facility to be granted within the framework of green financing.”
Rosen attributed this to the international best practices the company follows and the framework models for financing in accordance with the principle of green bonds and the principles of green loans.
It is difficult to say whether the green rating had any impact on the cost of the loan and the company does not have any “predetermined criteria” for future financing, he said.
PIF provided the company the capital for the first phase of the project, and the rest of the financing for the first phase comes from banks, he said.
In total, 16 hotels and 3,000 hotel rooms will be built, and the first 3 hotels, which will provide 300 hotel rooms, will be opened by the end of 2022, while the remaining hotels will be opened in 2023, he said.