The Tourism Development Fund (TDF) of Saudi Arabia will co-finance a $346 million project in Madinah aimed at maximizing the holy city’s tourism potential.
The fund signed a deal with Knowledge Economic City (KEC) and Riyad Bank to fund the construction of “KEC Hub,” a 68,000-square-meter tourism complex in Madinah.
Mr. Qusai Al Fakhri, Chief Executive Officer TDF pointed out that “this agreement is one of several successful agreements with local banks aimed at providing investors with attractive financial solutions that encourage investments into this promising sector. It exemplifies our commitment to delivering on the National Tourism Strategy, increasing the Gross Domestic Product (GDP) contribution of the tourism sector from 3 percent to 10 percent by 2030 and creating one million new jobs.”
The project, formerly known as Madinah Downtown, is located about 6 kilometers from the Prophet’s Mosque on King Abdulaziz Road. Developer KEC stated that it would include a shopping center, a five-star hotel, an immersive museum about Madinah, a theatre, a fitness club, and a commercial boulevard overlooking a garden and green spaces.
The KEC also said it had reached an agreement with US-based Hilton Worldwide to operate the hotel, as well as with engineering firm Ehaf to serve as a structural engineer and Saudi’s Al-Saad Contracting Company to build it. By 2024, the project’s first phase will be completed.
The TDF will contribute $104.2 million to the project, while Riyad Bank will contribute the same amount as a result of an earlier agreement with TDF to promote and finance tourism investments in the kingdom.
“With its rich culture and heritage and the government’s unwavering commitment to boost tourism, Saudi Arabia presents invaluable investment opportunities. Our mission at TDF is to unlock these opportunities by providing viable funding options, investment know-how, and access to support services; all to make the investor experience more attractive,” Mr. Al Fakhri added.
Saudi Arabia is rapidly changing its economy to reduce its reliance on oil, cultivate domestic industries, increase jobs, and diversify revenue.
It is working on a variety of projects, including Neom, a $500 billion futuristic city with a nature reserve, coral reefs, and heritage sites on around 50 Islands off the Red Sea, and Qiddiya, a mega entertainment and sports project in the capital.
The TDF was founded last year with a $4 billion initial investment to drive the growth of the tourism sector in the kingdom. It also signed a deal with Riyad Bank and Banque Saudi Fransi to fund tourism projects in the country worth up to $42.6 billion.
The KEC added that Riyad Capital would contribute an additional $25.8 million to the Madinah Gate project, which is being constructed on land next to the Haramain High-Speed Rail terminal. A mall, restaurants, and entertainment space will be included, as well as four-star hotel and hotel apartments.