Emaar Economic City plans to raise 1 billion riyals ($267 million) to help finance construction of the King Abdullah Economic City and will spend 13 billion riyals developing the Saudi Arabian project over the next four years.
The company, a unit of Dubai-based Emaar Properties PJSC, expects to arrange the loans from two or three banks before the end of 2016, Fahd Al Rasheed, chief executive officer of Emaar Economic City, said in an interview in Dubai today.
“Our business plan doesn’t call for more than a billion riyals,” he said. “We’re spending about 13 billion riyals over the next four years, which is a significant amount but we are doing a lot of it through sales. Our cash flow is healthy.”
Saudi Arabia, the largest oil exporter, is building four economic cities to attract foreign investment and create jobs. KAEC, as the project is known, will include a port and business district as well as residences and resorts. It will be built over 168 square kilometers (65 square miles), or about the size of Washington D.C., according to the project’s website.
About 70 companies, such as drugmakers Pfizer Inc. and Sanofi and French energy producer Total SA have already leased land to build plants, and a further 30 companies may sign up before the end of the year, Al Rasheed said.
Emaar Economic is building 6,000 housing units at the project, located on the Red Sea coast at Rabigh, and is seeking to double that amount every year over the next five years, he said. About 2,800 people are living in the city, he said.
An industrial zone covering 28 million square meters is also being developed inside the city and is due for completion in 2016, Al Rasheed said. The project will also include 10 hotels by 2020.
KAEC’s container-port terminal is already operational and will have the capacity to handle about 1.3 million twenty-foot equivalent unit containers by the end of the year, he said.
Emaar Economic shares gained 0.1 percent at 1:55 p.m. in Riyadh, compared with a gain of 1.1 percent for the benchmark Tadawul All Share Index.