Saudi Arabia Red Sea Project/Bloomberg
The Chief Executive of Red Sea Development said that the Kingdom’s sovereign wealth fund has committed financing for the project’s first phase, while the company is in talks with banks to raise debt.
Thursday 23, May 2019
(Bloomberg) --Saudi Arabia is seeking private sector investment to turn an archipelago, desert and mountains, an area about the size of Belgium, on its Red Sea coast into a global tourism destination.
John Pagano, the Chief Executive Officer of Red Sea Development, said, “The funding is backed by the Public Investment Fund (PIF), they’re funding the equity and we will source senior debt, while there is no absolute need for capital, bringing in private sector investors is seen as a good thing.”
“We are actively engaged in discussions with numerous investors,” Pagano said.
The company would seek to structure the investments as joint ventures and expects interest from domestic and regional investors, added Pagano.
The Kingdom is transforming its Red Sea coastline as part of plans to transform the economy and cut its reliance on oil. Bringing sun-seekers to Saudi Arabia’s beaches could transform a tourism industry that relies almost solely on Muslim pilgrims.
The first phase of the Red Sea project, due to be completed in 2022, will include 14 hotels and a commercial airport, the development is expected to be fully completed by 2030.