Madinah’s Knowledge Economic City taps $209m financing

RIYADH: Knowledge Economic City has agreed to borrow SR782 million ($209 million) from the Saudi Tourism Development Fund and Riyadh Bank for the development of the Knowledge City Hub project in Madinah.
The financing, which covers 79 percent of the project development cost, will be repaid over 13 years with collateral in the form of plots of land from the company’s land portfolio, according to a stock exchange filing.
The Tourism Development Fund (TDF) will provide half the financing and Riyadh Bank the other half, TDF said in a press release. The SR1.3 billion development will cover 68,000 sq. m at a site about 6 km from from Prophet’s Mosque, it said.
Knowledge City Hub is made up of a mall, commercial, residential and entertainment services and a 325-room 5-star hotel that will be managed by Hilton.
Construction is due to start in August 2021 and to be completed by end 2023 with the hotel finished in May 2024.
“This agreement is one of several successful agreements with local banks aimed at providing investors with attractive financial solutions that encourage investments into this promising sector,” Qusai Al-Fakhri, chief executive officer of TDF, said in the press release. “It exemplifies our commitment to delivering on the National Tourism Strategy, increasing the GDP contribution of the tourism sector from 3 percent to 10 percent by 2030 and creating 1 million new jobs.”
Separately, Knowledge Economic City said it had also agreed terms for the management of the Madinah Gate Fund Project Development with Riyadh Capital.
Madinah Gate is a vast redevelopment of land adjacent to the Haramain High Speed Train Station in the city. It will include a 4-star hotel and a bus station connected directly to the train station.
The detailed development includes a commercial and entertainment center with 23,000 square meters of leasable area with 78 shops, 39 restaurants and cafes, 2 entertainment centers, a cinema with 800 seats capacity, and 800 parking spaces.