Saudi Arabia will be the Middle East’s busiest construction market over the course of the next decade as the kingdom's new wave of major projects make progress
Saudi Arabia will be the Middle East’s busiest construction market over the course of the next decade as the kingdom's new wave of major projects make progress, says GlobalData’s MEED.
Saudi Arabia will showcase around 1,000 projects worth more than $160bn at the third Future Projects Forum (FPF) held virtually by the Saudi Contractors Authority from 22-24 March. Launched in 2017, these projects have kept architects and engineers busy completing design work and are now moving into construction.
Colin Foreman, Deputy Editor at GlobalData’s MEED, comments: “As work starts to move on site, attention is also focused on how these schemes will be funded. Most of the projects, such as The Red Sea Project, Diriyah Gate, Qiddiyah and the $500bn Neom, are being developed by subsidiaries of the Public Investment Fund (PIF), which has so far provided the initial funding.”
PIF will not be able to shoulder all of the funding requirements and Riyadh has been developing other options. Utilities packages on several developments are being delivered using public-private partnerships and, more recently, local and international financial support is being put in place.
In mid-January, the Tadawul signed an agreement with the Projects Support Fund initiative to provide listed companies with project financing support in the form of long-term loans for the healthcare, education and real estate sectors.
On the international front, Riyadh signed agreements in late December with export credit agencies to support Japanese and South Korean companies working on Vision 2030 projects in the kingdom. The Finance Ministry, represented by the National Debt Management Centre (NDMC), signed the agreements with Japan’s Nippon Export & Investment Insurance (Nexi) and South Korea’s K-Sure.
Those export credit agreements followed a similar deal signed in July 2020 with Germany’s Euler Hermes.
Foreman concludes: “As the pace of construction on Saudi Arabia’s Vision 2030 projects accelerates, these financial agreements – together with any other future deals – will play an important role in delivering the kingdom’s economic ambitions.”
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