The UAE’s Al-Futtaim Group and the local Qatar Islamic Bank are due to complete the financing for the QR6bn ($1.6bn) Doha Festival City project in October.

The sponsors are currently raising in excess of QR3bn from a group of Qatari banks to fund the development of the project. The financing for the project will structured as a sharia-compliant deal, say sources close to the project.

QInvest, a local investment bank, is leading the fund raising for the project, along with Al-Futtaim’s investment and development arm, Al-Futtaim Capital. “The financing is progressing well and we are on track to complete the deal soon.” A source close to the deal says.

The financing is progressing well and we are on track to complete the deal soon

A source close to the deal

The scheme will be developed in three phases, with an Ikea store developed first, followed by the main shopping mall complex, then some hotels. Most of the project is due to be completed by 2014. The funding being raised now will used to cover all three phases of the development’s construction.

A contractor for the main construction package on the project is due to be appointed later in September.

Over the past few months, banks in Doha have also completed a QR1bn loan for the development of Qatar’s Northgate Mall (MEED 2:9:11).