Saudi Arabia’s Neom gigaproject has secured a debt financing deal worth SR3bn ($800m) with Riyadh Bank.

The loan will be used to help develop Sindalah Island, which is scheduled to open to the public at the beginning of 2024.

This is the first time that Neom is taking a loan to support its development.

“The Sindalah debt financing signifies Neom’s desire to diversify its funding sources, involve the private sector and attract capital of all types in the development of Neom,” said Neom deputy CEO Rayan Fayez.

“We have a number of projects currently under way and in the pipeline that represent very attractive commercial opportunities for the global financial community to participate in.”

The agreement is expected to be the first opportunity of many for financial institutions to support projects at Neom.

“Neom represents an incredible opportunity for our organisation to play a small part in helping make this exciting project a reality,” said Riyadh Bank CEO Tareq al-Sadhan.

Sindalah project

Extending over an area of about 840,000 square metres, Sindalah is situated about 5 kilometres from the mainland in the Red Sea. The island was designed as an ultra-luxury destination and will be the first of a group of islands to be developed at Neom, each with its own purpose and design.

It will have three hotels developed under two brands, Marriott and Four Seasons, with a total of 413 keys, 88 villas and 333 serviced apartments.

Sindalah will also feature an 86-berth marina for yachts up to 50 metres and 75 offshore buoys for superyachts up to 180 metres.

In June, Neom invited contractors to bid for the main works package to deliver clusters 3-6 of Sindalah Island. The assets have been split across two mandatory packages. Package one includes the ultra-luxury and upper-upscale resorts, the beach and sports clubs and the golf clubhouse, while the second package comprises Luxury Resort South.

Assets in package one have a combined gross floor area (GFA) of about 37,605 square metres (sq m), while the second package’s GFA is 48,968 sq m.

The contract scope includes procurement, construction, testing and commissioning, with completion scheduled for December 2023 for package one assets and November 2024 for package two assets.

MEED reported in January that Neom had selected BEC Arabia to construct a clubhouse, an ultra-luxury resort and an upper-upscale resort on Sindalah Island.

Saudi Arabia’s Crown Prince Mohammed bin Salman bin Abdulaziz al-Saud officially launched the Sindalah Island project at the end of 2022.