Best Islamic project finance deal – Middle East: Neom Construction Villages’ $1.8 billion non-recourse multi-tranche financing
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Best Islamic project finance deal – Middle East: Neom Construction Villages’ $1.8 billion non-recourse multi-tranche financing


Borrower: Multiple special purpose vehicles

Obligor: Alfanar Global Development

Size: $1.8 billion

Structure: Murabaha, istisna-ijara facilities

Tenor: 7.5 years

Banks: Alinma Bank, Riyad Bank, Saudi Awwal Bank

Date: January 2023


 

Neom in Saudi Arabia is one of the world’s most ambitious urban development projects. It requires similarly ambitious levels of investment and financing, including SR21 billion ($5.6 billion) to build accommodation to support the development’s growing workforce.

This sum makes it one of the largest international public-private partnerships for accommodation. It covers multiple projects over multiple phases, with the first set of projects in the first phase being the construction of five villages or towns.

Each of the towns is intended to provide housing for 10,000 people and will be around 567,083 square meters in size. They will include over 237 labour accommodation units, multiple sports and entertainment facilities, dining facilities, access to medical care, mosques and utility buildings.

Saudi construction and operations company Alfanar Global Development won the contract to build, operate and maintain the five towns, which will require $2.5 billion of investment, part paid for by $1.8



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