Yamama Cement Company, a Saudi Arabia based manufacturer has signed an agreement with a group of local banks to raise SR1bn ($266.6 million) shariah-compliant loan to partially fund the building of a new factory.

The three-year financing includes SR750m from the National Commercial Bank and SR250m Samba Financial Group, the company said in the statement to Saudi Stock Exchange, where its shares are traded.

The company signed a SR4.2bn contract with Germany’s ThyssenKrupp Industrial Solutions in November last year to build the new production facility, according to media reports. The plant will be located 100 kilometres outside the Saudi capital Riyadh, with daily production capacity of 20,000 tonnes of clinker.