DUBAI: Saudi Arabia’s Jeddah Economic Co. said Monday it was in talks with local Saudi banks to raise funds for the 14-billion-riyal ($3.73 billion) first phase of its Kingdom City project.
If completed, the project’s more than 1-kilometer-tall Kingdom Tower will replace Dubai’s 828-meter Burj Khalifa as the highest in the world.
Kingdom City in Jeddah will also include mixed-use residential and commercial developments, the chief executive of the Jeddah Economic Co said at a construction conference in Dubai.
“The financial requirement is for 14 billion riyals to complete phase one by 2020,” Mounib Hammoud, said at the side lines of the conference.
“Our owners have already invested about 8.7 billion riyals into this project, which is a huge investment. The rest will be financed and we are closing a financing deal with banks which will be announced soon.”
He added that the funding would be through local Saudi banks but did not say how much would be raised.
Hammoud said some funds for the project would also come from the sale of land plots to other investors.
The first phase of the project is over an area of 1.4 million square meters, centered around the Kingdom Tower. The tower is expected to be completed by 2018 and will cost the company 6 billion riyals, Hammoud said. Dubai’s Burj Khalifa was built by Emaar Properties for a total cost of $1.5 billion.
“We will hand over the tower with 251 floors completed by 2018.”
Jeddah Economic Co. is 16.63 percent owned by the Saudi Bin Laden Group, while Kingdom Holding holds a 33.35 percent stake in the venture. Abrar International Holding Co. also has a 33.35 percent stake while businessman Abdurrahman Sharbatly will own 16.67 percent.
Hammoud said the next phases of the project would be driven largely by market demand. BNP Paribas is advising the company on its finances, he added, noting that the firm was also looking at raising funds through the bond markets.
“We are looking at the bonds and sukuk market but this will need a structure in place, which we are working on.”