Saudi Arabia’s ultra-luxury Amaala tourism project may raise up to 10 billion riyals ($2.7 billion) next year as the kingdom presses on with Crown Prince Mohammed bin Salman’s program to diversify the economy.
Amaala, on the northwestern coast of Saudi Arabia, will not tap markets until next year, Chief Executive Officer John Pagano said in an interview on the sidelines of Arabian Travel Market in Dubai.
The numbers haven’t yet been finalized, with the amount of debt likely to be in the “range of 5-10 billion, he said. The company has awarded more than 3 billion riyals in contracts.
Opening up to tourism is one of the ways Saudi Arabia intends to diversify its economy away from oil. Its other ambitious projects include an entertainment hub near the capital, and a new city in the north-west called Neom that’s expected to cost $500 billion to build.
Another luxury project, The Red Sea Development Co., was set to close a 14 billion-riyal loan from domestic banks, Bloomberg reported last month. Pagano, who is also the CEO of that developer, said proceeds will be used to fund the first phase scheduled for completion by the end of 2023.
Funding for the second phase hasn’t been determined yet but the developer could consider an initial public offering, asset sales, or tap debt markets, he said.
Owned by the kingdom’s sovereign wealth fund, the Red Sea Development will oversee a luxury tourism zone equivalent in size to Belgium and include a new international airport. When the entire project is completed in 2030, it will target 1 million visitors a year, split evenly between domestic and international tourists.
Pagano also said that capacity at Red Sea International Airport will stand at 300,000 passengers at the end of the first phase and that “driving direct flights is going to be challenging but we’re going to look at a hub and spoke arrangement”. Adding that airports in Riyadh, Jeddah and Dubai could feed traffic and that the Red Sea airport started the process of engaging with airlines.
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