Saudi Arabia’s luxury tourism initiative Amaala tourism project may raise up to $2.7 billion (SAR10 billion) next year, as the kingdom pushes forward with Crown Prince Mohammed bin Salman’s plan to diversify the economy.
Amaala, on the northwestern coast of Saudi Arabia, won’t tap markets until next year, chief executive officer John Pagano said in an interview on the sidelines of Arabian Travel Market in Dubai.
The figures aren’t finalized yet, but the debt is expected to be in the “range” of $5-10 billion, he said. The company has awarded more than $799 million (SAR3 billion) in contracts.
One of the ways Saudi Arabia plans to diversify its economy away from oil is to open up to tourism. Other ambitious ventures include an entertainment center near the capital and the construction of Neom, a new city in the northwest that is estimated to cost $500 billion.
According to the media reports, another luxury project, The Red Sea Project, was set to close a $3.7 billion (SAR14 billion) loan from domestic banks. The proceeds will be used to finance the first phase, which is expected to be completed by the end of 2023, as per Mr. Agano, who is also the CEO of that developer. The developer may consider an initial public offering, asset sales, or debt markets to fund the second phase, he noted.
The Red Sea Development, which is owned by the kingdom’s sovereign wealth fund, will oversee a luxury tourism zone the size of Belgium, as well as a new international airport. When the project is finished in 2030, it is expected to attract 1 million visitors each year, equally divided between domestic and foreign tourists.