Islamic finance to fund completion of project
- Saudi Arabias Jabal Omar Development Company closes $2.1bn in Islamic financing
- The funds will be used to complete phases two, four and five of the Jabal Omar development in Mecca
- Local Sabb and Samba Financial Group are the financiers
Saudi Arabias Jabal Omar Development Company has signed a SR8bn ($2.1bn) Islamic financing deal.
The funds will be used to complete phase two (S3-4), phase four (S9-11) and phase 5 (S6-8) of the Jabal Omar development in Mecca.
The financing was extended by the local Sabb, part owned by the UKs HSBC, and Samba Financial Group. It also refinances an earlier SR2bn bridge loan from the same banks. The ten-year Islamic financing is secured on the land Jabal Omar Development is working on in Mecca.
Jabal Omar Development has been working since 2007 to secure all the financing for its 2.5 million-square-metre project, located near the Grand Mosque in Mecca. It secured SR1.35bn of finance in 2010.
The development will include 37 towers, including hospitality, residential, retail, commercial and religious facilities. Upon completion, it will accommodate 30,000-40,000 residents and will be able to handle 8 million pilgrims walking to the mosque from the projects residential and hotel zones, as well as surrounding areas.
It is split into five, staggered phases. Phases one to four are well under way.
Jabal Omar Development cancelled a $426m contract awarded to the local Ruwad Civil Construction for the fifth phase of the project. Ruwad was awarded the contract in July and is already working on phase four. The phase five contract involved the building of nine hotel buildings and all related infrastructure work.
Several major Saudi companies are turning to banks to help finance their project spending. They include Saudi Electricity Company, which is seeking $3.8bn from banks and debt markets, and Saudi Aramco, which plans to borrow $5bn.
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