The local Saudi Binladin Group is close to completing a SR14.5bn ($3.9bn) financing deal to fund part of the development of the King Abdullah Financial District (KAFD) outside Riyadh.

The deal is one of several contractor financings currently being worked on by Saudi banks in support of the development, sponsored by the local Al-Rayadah Investments.

The Binladin financing will only involve local banks. It is made up of several different loans, with a maximum tenor of two and half years, by which time Binladin is scheduled to have completed the construction work.

Binladin won the contract in October last year for the construction of 30 buildings at KAFD.

A source in the kingdom says, “We are very close to completing the Binladin financing now. It should be finished in early April.”

Although sources close to the deal are optimistic that it will close shortly, several banks in the kingdom declined to be involved in the financing. One local banker said it was difficult for banks to make fresh loans to Binladin because of their own internal exposure limits.

Al-Rayadah, the investment arm of the government-owned Public Pension Agency, has awarded SR37bn of contracts to Binladin, the local El-Seif Engineering & Contracting and the local Saudi Constructioneers for work on the development (MEED 18:3:10).

Other contractor financing deals for the development of KAFD are also being worked on by local banks, including another large deal, and a number of smaller deals for other contractors, which have been awarded smaller packages.

Located on a 1.6 million square-metre site north of Riyadh, KAFD will have commercial and residential districts with leisure and recreation facilities. In addition to the World Trade Centre and GCC Central Bank, KAFD will also be the site for the headquarters of the Capital Market Authority and the Saudi Stock Exchange (Tadawul).