DUBAI, April 27 (Reuters) - Saudi Arabia's flagship tourism
project developer, The Red Sea Development Company (TRSDC), has
raised a 14.12 billion-riyal 'green' loan from
four Saudi banks for 16 new hotels, Chief Executive John Pagano
told Reuters on Tuesday.
The hotels form part of a new high-end tourism development
across islands, deserts and mountains near the country's west
coast, powered by renewable energy. It will include an airport
and housing as well as businesses, shops and leisure facilities.
"It's a green finance, which is the first of its kind in a
Saudi riyal-denominated loan facility, so we're very proud of
that fact. It also helps the banks with their own ESG
(environmental, social and governance) credentials," he said.
The 15-year term loan and revolving credit facility was
signed with Banque Saudi Fransi, Saudi British Bank
(SABB), Riyad Bank and Saudi National Bank
(SNB), Pagano said in an interview.
It has an interest rate of roughly 1% over the Saudi Arabian
Interbank Offered Rate.
The project, fully owned by sovereign fund the Public
Investment Fund, is key to Saudi Arabia's Vision 2030, an
economic transformation plan aimed at diversifying the economy
away from oil.
The kingdom wants tourism to contribute 10% of gross
domestic product by 2030. The renewable energy for the project
will be provided via a public private partnership with a
consortium led by ACWA Power.
The loan finances its first phase, with the 16 hotels due to
be ready by the end of 2023, 14 of them on islands in an
archipelago and two mainland hotels - one in the desert and one
in the mountains.
By the end of next year, three hotels will open and the Red
Sea International Airport will begin operating.
TRSDC first approached banks in 2019 about the loan for the
first phase, which is worth roughly 30 billion riyals.
"It's taken a while, but as I said, it's a complex project,
it's a complex journey, but it's perfectly timed."
The company has entered into about a dozen letters of intent
with hotel brands about management agreements and will announce
in the next few months "the stable of brands that will be
coming," Pagano said, which will mostly be luxury brands.
The CEO said he continued to expect 300,000 tourists a year
in the first phase and said he was optimistic global travel will
($1 = 3.7501 riyals)
(Reporting by Saeed Azhar and Yousef Saba; editing by Philippa